Chapter 13 Mortgage Lien Strips.

[ABC]

In Data Center my 2nd mortgage shows as:

SECURED - NON-PMSI

Is this correct since I am trying to lien strip it ? I thought it would say UNSECURED .

[justbroke]

You need it to be as close to filing as possible. This will just avoid challenges if it is "too dated".

[cspa522]

How long is an appraisal good for/valid? We are going to get an appraisal done to try and strip our 2nd, but I'm not sure exactly when we're going to file. It will certainly be between September and December of this year. I just don't want to have to get it done again (if we have to wait a month or two to file) if I don't have to!

[justbroke]

Does anyone know if a payment on a 2nd Mortgage should be included in the Means Test when it is Debtor's inetention to strip it off? It is our hope that including the payment is permitted inorder to greatly reduce the DMI.

It depends on your District. Some Districts are now enforcing the "adequate protection" rules and forcing the Chapter 13 debtor to not only list it on B22C (Means Test), but also to have it on their Plan and make payments! This is just in case it doesn't strip, the lienholder isn't in a worse condition.

As posted earlier, expect the Trustee to come at you to modify the Means Test and/or object to confirmation after the lien strip is completed.

[NoTomatoCan]

Does anyone know if a payment on a 2nd Mortgage should be included in the Means Test when it is Debtor's inetention to strip it off? It is our hope that including the payment is permitted inorder to greatly reduce the DMI.
Thanks in advance.

Not sure about what others have experienced (I posted a simialr Q in a thread several weeks ago with no replies) but we included it, then after our AP was successful, the trustee objected to the amount claimed on our Means Test! Pretty crazy. So essentially, after the AP, we had to remove it. Our judge has ruled on this issue previously (with our trustee) and decided that it should be removed. Our Means Test was originally below our I/J DMI, but by adding this back in, the Means Test was about $300 higher. So now our plan payment is about $300 higher.

I sort of understand the trustee's argument, but I thought that the Means Test was supposed to be mechanical and schedules I/J were supposed to be more flexible. The trustee actually relied on the Lanning case to argue that the expense of our 2nd mortgage is no longer reasonably certain.

We have a fair plan (both my wife and I are contributing max to 401k and paying on 401k loans) so we bit the bullett and compromised with the trustee by lowering our 401k contribution to make up the shortfall in our actual DMI.

[PhillyBKLaw]

Does anyone know if a payment on a 2nd Mortgage should be included in the Means Test when it is Debtor's inetention to strip it off? It is our hope that including the payment is permitted inorder to greatly reduce the DMI.
Thanks in advance.

[Pandora]

Finally received official court order on stripping the 2nd! confirmation should be sometime next month barring any complications from hubby accepting the new job, which may extend confirmation again, but we'll see.

Will be so glad when all this is done.

6 months paid in thus far, question becomes do we have 30 left or 54? We shall see once all the paperwork is completed. Hoping it'll be 30!

[Pandora]

!!!!!!

Got word yesterday our 2nd has FINALLY agreed to the strip! That means no hearing in front of the judge next month!

Confirmation - here we come!

[dani]

Im in Michigan filed a Ch.13, was confirmed, primary residence had 3 mortgages (don't ask) 1st, fixed-rate; 2nd somewhat underwater, but couldn't get stripped; 3rd a lien strip was done, bank never even challenged it from the beginning.
Trustee would not allow a 2nd home and another investment property.
Therefore, had to "surrender" through the court. 2 properties
We didn't want to give up the properties.
One property was modified and we still own and pay for it. Bank didn't seem to care we had filed BK.
The other property is beating us down with hefty legal fees to keep it, and wants the trustee to amend the plan.
Attorney says its not going to happen.
What would happen if we dismiss the BK and deal the banks ourselves, "given the times", i've heard of "settling" with them for 5-10% of the 2nd mortgage owed - possible???
Thanks

[LadyInTheRed]

This just seems to good to be true. I thought lien stripping needed the first to be valued at more than the value of the home. Also, it does not seem right that the second would lose the value that is secure in the property (even though upside down).
.

Consult with another attorney or two or three. I think you'll find they agree with you.

[sharonca]

Slightly Different Question..Confused

I was told that when crunching the numbers for the means test that I qualified for a 7 or a Chapter 13 (I guess my income is right in the middle and there is room for a little bit of manipulation?).

At any rate, I would like to keep the house. The informaiton I received seemed contrary to what I am reading. Home worth around 550-575. First is 300k, second is 200k. 55k in credit card debit with 250.00 a month in what was called disposable income.

Chapter 13 was suggested. Claims that I would pay the first on my own along with all of the other debt I have (minus the credit cards). The credit cards and the second mortgage would be paid with the 250.00 per month for 5 years (total 15k). At the end of the five years the second would be gone along with all of the credit cards. That I would only owe the 300k and thats, that!

This just seems to good to be true. I thought lien stripping needed the first to be valued at more than the value of the home. Also, it does not seem right that the second would lose the value that is secure in the property (even though upside down).

Help please...this came from an attorneys office.

[justbroke]

Any lien is always subject to attack. However, in this specific case, this is about bifurcation and/or cramdown. Any attack on the lien itself would need to be done because the security instrument (deed of trust, mortgage, etc) has defects or the moving party does not have standing.

[AlbanyMan]

I like the ruling as well. It seems to me it may be a stretch, but if after the one year mark as mandated by the Mortgage and say you also ran a business out of the home, it now has dual purpose and should surfice at leat in my interpitation to please that particlar judge. Sure would be nice to see someone test this in the DC District. I am in the 2nd Circuit and it seem like a 9th or 2nd kind of thing.

But for agrument sake, lets say the lender did waive 1322(b)(2), would that leave the lien subject to attack in a 522(f), if lets say in my case I claimed the entire value of my home as exempt and there was no objections to the exemptions. Shouldn't I in theory be able to assert my exemption and wipe out the mortgage since my exemption covers the entire value of the property? Not sure why there was no objections since on the date of Bk I had zero equity but now that my plan was confirmed and the 341 has long been closed no one can raise an objection now.

THe bk plan states as follows with regards to creditor "a first mortgage lien taken in 6/05 on debtors primary residence, debtor cured default, creditor has withdrawn its claim and will not survive this bankruptcy" "Debtor seeks discharge of all debts addressed in this plan"

[justbroke]

Almost all modern mortgages use that standard language. That's the "primary residence" requirement and was designed to keep people from getting 100% loan products and/or low APR rates on investment properties.

So, I would suppose that if the person move out or treated it as an investment property, that may give you some wiggle room, but that Judge is tilting at windmills! Also, in this very specific case, the debtor had actually moved out!

Your link is bad... it's https://ecf.dcb.uscourts.gov/cgi-bin...2008-00686-109

I do like the ruling though.

[AlbanyMan]

Wells Fargo May be Screwed

https://ecf.dcb.uscourts.gov/cgi-bin/show_p...?2008-00686-107