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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I very much appreciated your insight to my last two questions.

Resolved Question:

I very much appreciated your insight to my last two questions. I have one more regarding the bankruptcy affect the house. Since my Trust Deed named MERS as the beneficiary, I do not know who is the third party lender really is. If I file for a Chapter 7 bankruptcy and name the mortgage serving company I hope they will file for an automatic stay so that I can use the arguments that have been previously successful in the cases of In Re Walker; In Re Mitchell and In Re Salazar in our judicial district. In all those cases, the real third party lender never came forward to file a claim and MERS has no standing to do so. My fear is that since I am currently paying my mortgage and plan on continuing to do so, what would happen if the loan servicing company does not file for automatic stay, can I bring a motion for declarative relief to determine that there really is no third party lender in the country as I suspect?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.

Hi JACustomer,

I don't think those cases are relevant to your case.

Do you have non-exempt assets (valuable personal property or real estate other than your home) that will be surrendered to the Bankruptcy estate?

Customer: replied 5 years ago.
I have no other real estate other than my home, and I do not have any valuable personal property that is not exempt. Those other three cases are relevant because all three cases involved a predatory lender who placed MERS as a beneficiary on the trust deed and MERS paid no consideration. The same facts in those cases are the same as mine with the exception that they were all in foreclosure and I am not.
Expert:  cfortunato replied 5 years ago.

In all 3 cases, the problem was the lenders did not file Proofs of Claim, presumably because the lenders could not be located. Proofs of Claim will not be filed in your case, because there will be no assets in your case.


Customer: replied 5 years ago.
Can I bring a motion that would determine that the Trust Deed is invalid? What type of motion can I bring? Declarative relief?
Expert:  cfortunato replied 5 years ago.

No - you cannot do that in a Bankruptcy court.

A Bankrutpcy will discharge your obligation to pay the mortgage, but will not make a determination that the mortgage is not valid, as whether or not the mortgage is valid is not relevant to a discharge.

To get a determination that your mortgage is invalid, you would have to file a case in state court.

Customer: replied 5 years ago.
Can the other owner bring an adversary claim to get that determination?
Expert:  cfortunato replied 5 years ago.
Yes - but only in a state court.
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