The Debtors filed Chapter 7 and indicated on their Statement of Intentions they intended to retain the real property, with an estimated value of $430,000. U.S. Bank sought relief from the automatic stay, asserting that the Debtors owed $639,365.25 in total, with a delinquency of $145,703.92.
Sua sponte, the bankruptcy court held that U.S. Bank (and/or its servicer, Select Portfolio Services) had failed to establish that it owns or has the right to enforce the promissory note secured by the Property. The bankruptcy court noted that while the Motion for Relief asserted, by way of two Affidavits, that U.S. Bank was “ a creditor by virtue of the fact that the note was transferred by way of allonge.”, neither of the Affidavits actually includes such an allonge.… Read More
Sea Horse Realty, which is wholly owned by Richard Mercer, is the owner of a parcel of real property located in Nags Head. In 2005, Mercer executed a promissory note, currently held by Citimortgage (to whom reference will be made, regardless of whether the party was Citimortgage or its predecessors), for $1.5 million, pledging the property as collateral. The Deed of Trust was originally to list Sea Horse Realty as the grantor, but this was changed at the request of the mortgage broker to list Mercer as the grantor.
Mercer filed Chapter 11 in 2009. Citimortgage filed a Proof of Claim, but following an uncontested objection by Mercer, this claim was allowed as a general unsecured claim.… Read More
Around the time of the Confirmation of the Debtors’ plan, the Male Debtor was injured in a motor vehicle accident. Subsequently, he amended his schedules to disclose the personal injury claim and his exemptions to claim the d claimed the full $10,379.35 settlement as exempt property per N.C.G.S. § 1C-1601(a)(8). The Trustee failed to object to the exemption but did seek to have this amount determined to be disposable income.
Relying heavily on In re Graham, 258 B.R. 286 (Bankr. M.D. Fla. 2001), the bankruptcy court disagreed, holding that had “Congress intended ‘disposable income’ to include post-petition exempt personal injury proceeds, Congress could and should have explicitly said so in §§ 1306 and 1325.… Read More
The Debtor’s Chapter 11 case was converted to Chapter 7, following a hearing, at which neither the Debtor nor Debtor’s counsel attended, based on testimony presented by the bankruptcy administrator elaborated on the basis of her motion to convert, that despite being granted generous opportunities for amendment, inaccuracies and confusion continued to plague the debtor’s monthly operating reports. Subsequently, the Debtor filed a Motion to Reconsider based on excusable neglect.
Based on the testimony of the debtor and his wife showing that the issues and inaccuracies plaguing his monthly operating reporting have been corrected and would be accurate in the future, as well as the Debtor’s counsel having taken responsibility for the absence of both at the first hearing, the Court rescinded the conversion of the case.… Read More
Loss mitigation actions (e.g., liquidation, renegotiation) of delinquent mortgages might be hampered by conflicting goals of lenders at different seniority. In particular, a servicer has less incentive to take certain actions to reduce losses of investor-owned first lien mortgages if the servicer happens to own the second lien claim secured by the same property. Rather, the servicer has an incentive to hold up loss mitigation as it seeks to preserve the values of its own, junior, claim. The Study shows that a sizable fraction of delinquent mortgages with multiple liens are indeed characterized by the servicer holding a direct financial interest in the junior liens, but not the first-lien mortgage.… Read More
Shortly before their divorce, the Plaintiff’s then wife obtained a credit card in his name, without his knowledge. Several years later, the Plaintiff discovered the credit card on his credit report and also began to receive collection letters and calls. These ceased until there was renewed collection activity (which is not described in the opinion) starting in January 2011, in response to which the Plaintiff retained counsel to demand verification of the debt. The Plaintiff’s counsel received a packet of documents and two telephone calls from the Scott Lowery Law Office (“SLLO”), a law firm based in Colorado and Oklahoma.… Read More
The Mecklenburg Clerk of Court authorized a foreclosure sale on September 29, 2010. There was no appeal of that order. Nearly a year later on August 8, 2011, the homeowner brought suit alleging that the foreclosure order had been premised on fraudulent documents, that the parties initiating the foreclosure had lacked any interest in the debt and lack of notice. The trial court dismissed the complaint pursuant to Rule 12(b)(6) finding that the homeowner could not re-litigate issues which had been judicially determined in the foreclosure.
The Court of Appeals held that these matters, which go to requirements under N.C.G.S.… Read More
The Plaintiff provided paving services for the Richmond Hills development starting in August 2005 and asserted that its date of last furnishing of materials was February 24, 2010. It filed a Claim of Lien on March 30, 2010, a month after the property was sold at foreclosure. The purchasers of the property contended that the Plaintiff had performed no services for a year prior to February 2010 and was therefore tardy in filing the Claim of Lien.
The Court of Appeal analysed the timing, looking to the following criteria to determine when the materials were last furnished for purposes of filing a materialmens lien:
(i) the work performed and materials furnished must be required by the contract;
(ii) .… Read More
In a dispute between Sun Trust Mortgage and United Guaranty, which insured against payment defaults on certain loans products, one of Sun Trust’s employees was found to have deliberately altered e-mails to manufacture documentary support for Sun Trust’s position in the dispute. The district court ordered Sun Trust to pay United Guaranty’s attorneys’ fees and costs related to the sanctions motion that was brought by United Guaranty, which had additionally sought dismissal of the entire suit.
Relying on United States v. Shaffer Equip. Co., 11 F.3d 450, 462 (4th Cir. 1993), the Court of Appeals identified six factors to consider in determining whether dismissal is appropriate:
(1) the degree of the wrongdoer’s culpability;
(2) the extent of the client’s blameworthiness if the wrongful conduct is committed by claims against blameless clients;
(3) the prejudice to the judicial process and the administration of justice;
(4) the prejudice to the victim;
(5) the availability of other sanctions to rectify the wrong by punishing culpable persons, compensating harmed persons, and deterring similar conduct in the future; and
(6) the public interest.… Read More