Tentative ruling on Lien Strp 2nd: Los Angeles Central District

[needadvice1]

[walkthaplank]

What type of appraisal did you have? What was the value vs 1st mortgage?

I had an appraisal done complete with supporting documents. My appraised home value is about 60k below what is owed on my first. My lawyer claimed that in the Riverside court lien strips are virtually rubber stamped if accompanied by a certified appraisal.

Would like to see more info about this. Have you talked to your lawyer yet?

[justbroke]

Ahhh! In some Districts, lien stripping (or more appropriately, Motions to Determine Secured Status and Avoid Lien, are done by motions as a contested matter (hearings required). Other Districts, have determined (or it's just local practice) that lien stripping can only be done by complaint (Adversary Proceeding (AP)).

The rest reads like some procedure issues. Sounds like your lawyer didn't submit a good package of exhibits. The best evidence in a Motino to Determine Secured Status is a Uniform Residential Appraisal Report (URAR) performed by a State license Real Estate Appraiser. While your lawyer submitted it, either your Motion wasn't Verified and/or Sworn. (Some jurisdictions require you -- the debtor -- to sign the motion under penalty of perjury and basically also authenticate the appraisal exhibit.)

In my District, fortunately, we can strip by motion (no need for an Adversary Proceeding). We can also do this with a Verified Motion, which has an unsworn declaration by the debtor(s), under penalty of perjury. Your District may require that to be sworn, as well as notarized. I don't know your Court's procedure.

You can still strip, usually up to the Confirmation hearing. (Many of these "lien strips" (in my District) are done without even a hearing, so my experience will differ.)

[needadvice1]

My attorney is telling me that the "declarant" is the company that completed the appraisal? Aren't I the declarant? Please give your opinion! Thanks

"while an appraisal report was attached to the motion, it was unauthenticated by a declarant with personal knowledge of it contents."

[justbroke]

My attorney is telling me that the "declarant" is the company that completed the appraisal? Aren't I the declarant? Please give your opinion! Thanks

Ahh... declarant! The person who made the "statement". It may be local procedure, or the Appraiser didn't put a the obligatory statement known as the Appraisers Certification.

[needadvice1]

Thank you!

Justbroke do you think I have a shot a lien stripping the second if we privide all things the judge has requsted? Thanks!

[needadvice1]

WALKTHAPLANK...I got 2 appraisal from the same company they are commericial and residential certified. According the my attorney they beyond your regular certified standard appraisals. They are MAI, SRA certified.

[justbroke]

Justbroke do you think I have a shot a lien stripping the second if we privide all things the judge has requsted? Thanks!

Absolutely. It seems to be that California is adopting the "rubber-stamp" approach. However, seems like your specific District is very by-the-book about it (no rubber stamp).

Funny thing is, in Florida, we can do these lien strips on a motion with what they call "negative noticing". I did one by mailing the verified motion and three exhibits (2 proofs of claims from the lender holding the first and second mortgage and the "certified" appraisal) via certified U.S. Mail with return receipt. The notice was that if they didn't respond to it in 21 days, it could be considered unopposed. Voila! No opposition at all, I wrote my order stripping the 2nd, and was done in less than 35 days!

California, at least your District, appears to want to do it by Adversary Proceeding (AP). This is a little more formal, and you'll have a hearing. Because you're represented by an attorney, you probably don't need to go to the hearing. Your attorney will present your evidence (appraisal and lender's claim) and prove that you are upside down. Hopefully it goes unopposed and the lender just doesn't fight. In that case, your lawyer just files a stipulated order to strip the lien, and you're done.

Hopefully, your attorney informed you that there is one downside to stripping a lien in a Chapter 13. If your case should be dismissed or converted (to Chapter 7), the lien strip is void. That means, that 2nd mortgage (or 3rd or 4th) would not have been paid and would be "technically" in arrears (subject to foreclosure). You just need to understand that.

[rmhesq2]

My attorney is telling me that the "declarant" is the company that completed the appraisal? Aren't I the declarant? Please give your opinion! Thanks

"while an appraisal report was attached to the motion, it was unauthenticated by a declarant with personal knowledge of it contents."

The declarant to verify the appraisal should be signed by the appraiser who appraised your home. In Orange County, lien strips are done via motion. Some judges in LA require adversary proceedings, others will do this via motion. You could attach a declaration from you as the homeowner which is what we do in Orange County.

[rmhesq2]

If your residence is appraised at less than you owe on the first, you should be successful in your lien strip. I have done these in both Orange County and Riverside where we can do them via motion. I did not receive any opposition from the second trust deed holder. In the Riverside motion, the bank even submitted a non opposition.

In Los Angeles, some judges require and adversary proceeding and some will do this via motion. The adversary is more time consuming and, if the second responds, will require a trial. If the second does not respond, you should be able to get the lien strip by default.