Posted by Kevin on November 30, 2010 under Bankruptcy Blog | 
Last week, the Wall Street Journal had an article about how second mortgage holders are putting the kabosh on short sales.
Hedge funds are buying out second mortgages for pennies on the dollar. The second mortgage is underwater. The homeowner can sell the property for less than the amount of the first mortgage. For example, the first mortgage is 300K. The second mortgage is 50K. The owner gets a contract for 275K. Owner contacts 1st mortgagee (lender) for short sale. 1st mortgagee agrees. Done deal? Not so fast.
In steps the second mortgagee. The second mortgage is a lien on the property. Unless that lien is taken care of, the new buyer cannot get title insurance and, therefore, cannot get a mortgage loan. Owner is SOL unless it can take care of the second mortgage.
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Posted by Kevin on November 23, 2010 under Bankruptcy Blog |
Last week, Judge WIzmur came down with a written opinion in Kemp v Countrywide. In that case, Countrywide filed a Proof of Claim which was challenged by the debtor on the grounds that Countrywide lacked standing.
What happened was that Countrywide securitized Kemp’s loan, Bank of New York (BONY) was the trustee and should have possession of the note. But, Countrywide never transferred physical possession to BONY. The Court found that BONY could not be a holder under the UCC because it did not have possession of the note. BAC, the new Countrywide entity, was not a holder since it was the servicer. As servicer, it could file the proof of claim as the agent of BONY. However, since BONY never had possession of the note, it was not the holder and, therefore, could not delegate the task of filing the proof of claim to the servicer.
More of the case details will be posted later this week on my blog at fightforeclosurenj.com.
Posted by Kevin on November 10, 2010 under Bankruptcy Blog |
There has been a lot of press in the last month about so-called “robo-signers” and false affidavits being submitted in both bankruptcy and foreclosure matters. What are the courts doing to combat this?
Many commentators talk in terms of the courts’ right to impose sanctions (usually translated into monetary fines and payment of the non-offending party’s legal fees) but the fact of the matter is that courts are reluctant to impose sanctions.
In the case of In Re Butler, which was a Chapter 13 case in New Jersey, a credit union filed for relief from the automatic stay claiming that the debtors had missed 18 monthly payments on its SUV. The debtors provided proof to the court, by bank statements and wire transfer authorizations, that all payments but one were made. The hearing was postponed. During the interim, the credit union withdrew its motion.
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