The Deed of Trust held by BB&T against real property references a promissory note dated September 7, 2005. The actual promissory note, however, is dated September 8, 2005. Relying on Beaman v. Head (In re Head Grading Co.), 353 B.R.122, 123- 24 (Bankr. E.D.N.C. 2006), the Debtors attacked the validity of the lien.
BB&T first argued that because the Debtor had executed a Change in Terms Agreement, explicitly affirming the note, it should be estopped from now contesting the enforceability. The knowledge of the Debtor is not, however, imputed to the debtor-in-possession in a § 544(a)(3) action, who instead proceeds as a hypothetical judgment lien creditor.… Read More