Wow thanks I read those rules and then some. I don't understand why you said "the unrecorded first lien does not need to be stripped off for the reasons mentioned" in your 10:02 am post. Because Wont they try to enforce after bk discharged with equitable subornation? Or before like during my motion?
State/Country relating to question: California
Hi again.I was referring to this:544. Trustee as lien creditor and as successor to certain creditors and purchasers(a) The trustee shall have, as of the commencement of the case, and without regard to any knowledge of the trustee or of any creditor, the rights and powers of, or may avoid any transfer of property of the debtor or any obligation incurred by the debtor that is voidable by--(3) a bona fide purchaser of real property, other than fixtures, from the debtor, against whom applicable law permits such transfer to be perfected, that obtains the status of a bona fide purchaser and has perfected such transfer at the time of the commencement of the case, whether or not such a purchaser exists.That provision allows the trustee to avoid an unrecorded lien. However, he would only do that if unsecured creditors would get something out of it. If your home is worth less than the first mortgage, then the trustee wouldn't avoid the second, so my earlier point was moot. But I wanted to throw it out there anyway just in case since I don't know the details of your case. Obviously, if the trustee did avoid the lien, then you'd know and he'd likely be selling the house.But you're correct that the second lienholder could attempt to enforce the lien after the bankruptcy.You may want to look into what is commonly referred to as a Chapter 20. It is the filing of a Chapter 13 after a Chapter 7 has been discharged, and it is primarily done to strip off a second mortgage after other debts are discharged in a Chapter 7. I will warn you, however, that creditors and trustees sometimes attack debtors with "good faith" arguments. The reason is that filing the Chapter 7 first wipes out most unsecured debt, and those unsecured creditors may have gotten something in the Chapter 13 if the Chapter 7 hadn't been filed first. So, it can be a little sneaky and not always successful. But the Bankruptcy Code doesn't expressly preclude it.
Licensed to Practice Law
i read exactly what you wrote yesterday and again today and was going to email it with other things i copied and pasted to trustee. but now im just going to do motion to dismiss and motion to compel. i have done many q w r 's and to no avail. i will do it pusuant to rule 9014. I know about the Chapter 20, and thought about it, but i thought you had to do a chapter 13 first. how soon after can i do a chapter 13 after discharge? but i might not have to do a chapter 13 because I still dont understand how the first mtg can enforce their mtg when they dont have a recorded lien, are listed as wholly unsecured, and haven't objected to discharge yet. though they have a few weeks. they have nothing in their name except a loan mod they did and never notarized. i had it notarized even though they said i didn't have to and i have the note i wrote to them telling them i notarized it even though they said i didnt have to. they never notarized it nor perfected their lien, so equitable subrogation can't fly can it? The HELOC was going to give me way more originally because they thought i didn't have a loan because all that was recorded before them was a full reconveyance. I tried to leave you a bonus, but my cc was declined, i will call them tomorrow. tonight i'll be up all night doing my motion...lots to do, lots of evidence. How can I phrase in my motion that I will submit further evidence as deems fit/necessary so I can just get it filed with enough merits to start? And on Schedule A i put a judgement lien as secured but it interferes with my Homestead exemption, so do I put it as unsecured and on Schedule F?
btw, i think the trustee abandoned it because of my homestead. I declared that home as exempt. 175k homestead exemption and heloc is recorded and 100k owed. First is unrecorded lien, they have nothing. They told me they shredded the note. I asked why and the guy (in India) said because it is dangerous to have the Note around because if it gets in the wrong hands. Don't they have to show Note to foreclose in bk court and have standing? They only have the Note I signed with previous lender that filed BK. I still dont understand though how they can foreclose or try to collect if bk is discharged and they are listed as unsecured and they dont have an endorsed Note. Is the fact that I've been paying them for 8 years any proof? Or just proof that I had no idea of their criminal activity? Also, whenever I've tried to call them and see about redeeming or reaffirming, they put me on hold forever, transfer me 3-4 times and then the frickin phone gets hung up and i've been on the phone trying to reach someone for over an hour each time. The HELOC is the only recorded loan and they told me when i called 6 months ago the loan was paid off. I hadnt received anythign from them in a very long time and was 6 months behind. that lady had me on hold forever and then told me someone coded it wrong and they had coded it as paid off. She said I would get a call in 24-48 hours. noone ever called, I've called them and recorded the calls (19 of them) since, and there is no one to talk to. They didn't even have me as filing BK even though they were noticed by the BK clerk and then by me 5 times to the 4 different addresses they gave me and 2 fax numbers. The whole thing is so CRAZY. The right hand doesn't know what the left hand is doing with these "lenders" and in fact their right hand doesnt even know what their right hand is doing. I told them emphatically that they need to tell their bk dept. and everytime i called i asked them to document my file and the last time i called i said, read the notes and see all the times i've called. and i was floored and just about had a stroke when the guy said their are no notes on my account. I think they just stand outside the prisons and as people are released they hand them applications. They are all criminals in my experience and ever so uneducated. Look at the postings online for Lenders/Servicers. Only requirement is to have a high school diploma and to be able to keep confidentiality. What does that tell ya? Anyway. I just need to get something filed immediately, and i think it has to be against the lender/servicer/substitute trustee. Isn't it law to submit an affidavit/declaration from Substitute Trustee with NOD? I have had 6 foreclosures and all except this one had the declaration/affadavit but not this one. Isn't that also against CA foreclosure procedure?
Hi again.Q: I know about the Chapter 20, and thought about it, but i thought you had to do a chapter 13 first. how soon after can i do a chapter 13 after discharge?A: No, the 13 comes second. You can file for the 13 immediately after discharge. The longer you wait, however, the better because of good faith arguments.Q: I still dont understand how the first mtg can enforce their mtg when they dont have a recorded lien, are listed as wholly unsecured, and haven't objected to discharge yet.A: The fact that the debt would be discharged and the fact that they are listed as unsecured make no difference. The only question is whether they still have a lien after the bankruptcy. They likely would.In any event, let's keep just one thread going. It's difficult for me to keep up with two, and you're asking questions in the other as well, so let's stick to that other thread.
I am tring to reply to you. This is my 5th attempt and when I click in "reply to expert" it goes to all bk Attnys not you. I think I have to call just answer I don't get it. I understand the law books/codes/rules better than how to stick with one thread and computers
You repliedThursday, June 28, 2012 9:55 AM ESTI am tring to reply to you. This is my 5th attempt and when I click in "reply to expert" it goes to all bk Attnys not you. I think I have to call just answer I don't get it. I understand the law books/codes/rules better than how to stick with one thread and computers
Hi again.I appreciate that. Unfortunately, I'm going to be offline for several hours (I need to get to the office), so I won't be able to respond further until this evening. If you'd like for me to open your questions to all attorneys, then that is fine, or you can wait for me to respond to your other questions later.Thank you.
I'll wait til later for you, thank you
Hi again.I'm back online for a couple of hours tonight if you need clarification.
You said,Q: I still dont understand how the first mtg can enforce their mtg when they dont have a recorded lien, are listed as wholly unsecured, and haven't objected to discharge yet.A: The fact that the debt would be discharged and the fact that they are listed as unsecured make no difference. The only question is whether they still have a lien after the bankruptcy. They likely would.I'm confused because if they didn't record it and it's been silent so long, how do they have a lien?
Hi again.The purpose of recording a deed of trust is not to validate it, but to give it priority over subsequent liens. So, an unrecorded deed of trust is valid, but a subsequent recorded deed or trust will have priority. Let's say you borrowed $50,000 from Lender #1 and the the deed of trust was never recorded, and later you borrowed $100,000 from Lender #2 and that deed of trust was recorded. If you stop paying your mortgages and there is a foreclosure sale, then Lender #2 will be paid from the proceeds first. So, if your property sold for $100,000 at the foreclosure sale, then Lender #2 would be repaid in full, and Lender #1 would get nothing. That's why recording is important for the lender.I did some research in CA just to be sure and found this from a treatise on CA real estate law:Generally, an instrument is enforceable between the parties even though it is not recorded.[FN13] For example, a grant deed[FN14] or a deed of trust,[FN15] when duly executed and delivered, conveys the title or lien to the grantee or beneficiary and is enforceable against the grantor or trustor even though it is not recorded. 5 Cal. Real Est. § 11:2 (3d ed.).
Is there anyway in bk to then strip down or cram down the unrecorded lien? Or a way to make them prove they own it? The recorded HELOC amount is less than the value of the house but the first unrecorded mtg added to the HELOC combined totals more than current market value. I want to keep the house so should I then reaffirm or redeem on statement of note nation?
Hi again.Unfortunately, you can't cram down a mortgage on your principle residence. The Bankruptcy Code specifically excludes it. You can strip off the lien in a Chapter 13, but not a Chapter 7. In order to strip it off, you'll need to prove that there is no equity for it. In other words, you'll need to prove that the house is worth even less than the lien with priority so that the lien you want to strip is 100% underwater.I don't see any reason to reaffirm the debt. You can keep the house so long as you pay the mortgage with priority. The mortgage without priority won't foreclose if it's completely underwater since it won't get anything from a foreclosure sale. You can try to convert your bankruptcy to a 13, or file a new 13 afterward to strip off the lien in question.
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