Tag: 1322(b)(2)

Bankr. E.D.N.C.: In re Hurlburt- Anti-Deficiency Mortgage Statute does not Circumvent Anti-Modification Provisions

Summary:

Mr. Hurlburt sought to cram down the claim of a seller-financed purchase money deed to the value of his principal residence. While this would have been impermissible under 11 U.S.C. § 1322(b)(2), because the note was due, Mr. Hurlburt argued that 11 U.S.C. § 1322(c)(2) allowed such treatment even though Witt v. United Companies Lending Corp., 113 F.3d 508 (4th Cir. 1997) interpreted that section to allow only modification of the payment and not cram down. As this was a seller-financed purchase money deed, the anti-deficiency provisions of N.C.G.S. § 45-21.28, limited the lien-holder to only collect against the collateral.… Read More

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Bankr. E.D.N.C.: In re Bradshaw- 11 U.S.C. § 1322(b)(2) Anti-modification inapplicable if Mortgage Takes Escrow Account as Collateral

Summary:

The Debtors principal residence was found to be worth $136,000 with a first mortgage of $116,254.11 held by PNC and a second mortgage, held by Asset Ventures, LLC, in the amount of $27,000. This second mortgage additionally took as collateral the Debtors’ escrow account.

Following In re Bradsher, 427 B.R. 386, 388 (Bankr. M.D.N.C. 2010), the court held that as an escrow account is additional personal property, the anti-modification provisions of 11 U.S.C. § 1322(b)(2) did not apply and allowed the bifurcation of Asset Ventures’ claim, with $19,745.89 secured and unsecured in the amount of $7,254.11.

For a copy of the opinion, please see:

Bradshaw- 11 U.S.C. Read More

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Law Review: LoPucki, Lynn- House Swaps: A Strategic Bankruptcy Solution To the Foreclosure Crisis

Abstract:

Since the price peak in 2006, home values have fallen more than 30%, leaving millions of Americans with negative equity in their homes. Until the Supreme Court’s 1993 decision in Nobelman v. American Savings Bank, the bankruptcy system would have provided many such homeowners with a remedy. They could have filed bankruptcy, discharged the negative equity, committed to pay the mortgage holders the full values of their homes, and retained those homes. In
Nobelman, the Court misinterpreted reasonably clear statutory language and invented legislative history to resolve a 3-1 split of circuits in favor of the minority view. The Court ruled that debtors could not modify even the unsecured portions of the mortgages on their principal residences.… Read More

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4th Circuit: Delebreau v. Bayview Loan Servicing- Acceleration Date of Mortgage

Summary:

Following foreclosure and bankruptcy, the Debtors raised claims against Bayview under the West Virginia Consumer Credit and Protection Act. The statute of limitations provides that:

With respect to violations arising from other consumer credit sales or consumer loans, no action pursuant to this subsection may be brought more than one year after the due date of the last scheduled payment of the agreement. W. Va. Code § 46A-5-101(1) (emphasis added).

The sole issue in this case was whether the “the due date of the last scheduled payment of the
agreement” was the loan acceleration date or the loan maturity date.… Read More

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