Throughout extended litigation regarding the validity of a junior mortgage (there are more than 300 docket entries in this Chapter 13 case), a motion to dismiss filed by the trustee remained pending due to the inability to confirm a plan. After more then five years when the court determined both liens were valid in In re Cooper, but demoted lien of First American, the Debtors proposed a plan surrendering the property to the secured creditors, with the collateral to satisfy those claims and the $61,554.84 paid by the debtors to date being held by the trustee.
First American, the holder of the second mortgage, opposed confirmation arguing that the plan was unfair and not proposed in good faith, since it had received no payments.… Read More
The IRS recorded two tax liens against real property and subsequently the Village of Sugar Mountain (“the Village”) obtain a third lien against the property for local property taxes. The Village ultimately sought to foreclose on its tax lien, but did not, despite the requirement in 26 U.S.C. § 7425(a), give notice to the federal government of the sale. The property was sold on November 13, 2013, in a judicial tax foreclosure for $6,673.73 to the Village. The following day, November, 14, 2013,the property was sold at a federal tax foreclosure to Mr. Henkel for $172,000.00. At that second foreclosure, the Village agreed to assign its interest in the property to Mr.… Read More
The Coopers had a home equity line of credit with First Bank. They refinanced their home with AHMS, which directed First Bank to close the line of credit, but the closing attorney failed to do so. The Coopers subsequently drew the available funds from the line of credit and filed Chapter 13 bankruptcy, with First Bank owed approximately $90,000 and AHMS owed approximately $160,000 .
Extended litigation ensured between AHMS and First Bank, with a settlement ultimately providing that the lien of First Bank (at that point assigned to title insurance) would be subordinated to the AHMS lien.
The Coopers then sought to strip-off the lien of First Bank pursuant to 11 U.S.C.… Read More