How late is too late to amend schedules to include a secured creditor and claim a homestead exemption for purposes of section 522(f) lien avoidance? The BAP for the Ninth Circuit addressed the question in the case of Green v. HAPO Community Credit Union (In re Green), No. 12-1486 (Aug. 12, 2013), in which it reversed the bankruptcy court’s dismissal of the debtor’s motion to avoid lien and ordered that, upon remand, the lower court grant the motion. [Read more…] about Lien Avoidance Four Years after Discharge
Traverse v. DeGiacomo, No. 13-9002 (1st Cir.)
Type: Amicus
Date: July 10, 2013
Description: Whether trustee steps into shoes of debtor upon avoidance of lien and can sell debtor’s residential property.
Result: Judgment reversed and remanded, May 23, 2014
Deed of Trust Is Functional Equivalent of Mortgage for State Foreclosure Purposes
In Cruz v. Aurora Loan Services, No. 11-1133, Adv. Proc. No. 11-90116 (Bankr. S.D. Cal. Apr. 25, 2013), the court was asked to reconsider its earlier determination that the recording requirement of California’s non-judicial foreclosure statute applies to deeds of trust. See Cruz v. Aurora Loan Servs. LLC (In re Cruz), 457 B.R. 806 (Bankr. S.D. Cal. 2011) (“Cruz I“). [Read more…] about Deed of Trust Is Functional Equivalent of Mortgage for State Foreclosure Purposes
Disallowed Claim Renders Lien Void Under 506(d)
The Fourth Circuit found that a lender’s lien was extinguished upon the debtor’s discharge where the lender’s proof of claim had been disallowed due to the lender’s failure to provide the necessary documents to prove that it had a perfected security interest. National Capital Management v. Gammage-Lewis, No. 12-2286 (June 6, 2013). [Read more…] about Disallowed Claim Renders Lien Void Under 506(d)
Debtor’s Standing to Avoid Lien
The Sixth Circuit BAP found that the debtor has derivative standing to exercise the trustee’s strong-arm powers under section 542 by seeking avoidance under section 544 of an unperfected lien on his manufactured home. U.S. Bank Nat’l Ass’n v. Barbee, No. 10-8074 (B.A.P. 6th Cir.) The court identified certain realities that supported its finding: the trustee’s lack of resources to pursue every legitimate avoidance claim, the requirement that the plan conform to section 1325(a)(4), and the possibility of the debtor’s being accused of bad faith if he proposes a plan that does include avoidance of a clearly avoidable lien. In so deciding, the court agreed with the holding in Countrywide Home Loans v. Dickson, 427 B.R. 399 (B.A.P. 6th Cir.), aff’d on other grounds, 655 F.3d 585 (6th Cir. 2011).
Opinion
NJ Appellate Court Sets Aside Sheriff’s Sale
A New Jersey intermediate appellate court set aside a sheriff’s sale and vacated summary judgment originally granted in favor of foreclosing entity because it failed to prove it had standing on the day that the foreclosure complaint was filed. An amended complaint filed after plaintiff received an assignment of mortgage did not cure the defect.