Tag: escrow

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


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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Bankr. E.D.N.C.: In re Edwards- Escrow Shortage as Pre-Petition Arrearage

Summary: Relying on In re Beaudet, 455 B.R. 671, 673 (Bankr. M.D. Tenn. 2011), the bankruptcy court held that while Ocwen was entitled to include future escrow amounts in the on-going monthly payment, the pre-petition escrow shortage should instead be included in the arrearage claim.     Commentary: If a pre-petition escrow shortage is included in the monthly payment, that will require a 12-month cure.  If, however, it is included in the arrearage claim paid through the Chapter 13 plan, this allows for a cure of up to 60 months.

For a copy of the opinion, please see:

Edwards- Escrow Shortage as Pre-Petition Arrearage.PDF Read More

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