Listing 1st mortgage on schedule F

[newstart9]

Hello - I need your expert opinion

Planning to file Chapter 13 in order to save home from foreclosure or atleast to delay things.

I want to list my 1st mortgage on Schedule F as unsecured and not on Schedule D.
I know for sure that the loan is securitized and the current servicer of the loan (the foreclosure enforcer) is not the owner of the note or loan. This way it shall come down to proof of claim in a hearing where it can be proved that the note and lien is "not perfected" . - also I am prose -

but the loan is around $400k and if i list it on schedule F then I go past the Chapter 13 limit of $336900

Kindly reply

[despritfreya]

Another "show me the note" person. Good luck with that one but, hey, you will get to continue to live rent free for a while.

It is listed on D. The lender (or someone) IS secured. You are simply DISPUTING the validity of its claim that it is secured, or entitled to any payment. For what it is worth (not much) mark it as disputed, contingent and unliquidated.

By the way, the unsecured debt limit is not $336,900. It changed over a year ago to $360,475.

I realize this is your 1st post (welcome to the forum) and I also realize that you have delusions as to what you think you will accomplish with your arguments. I am not going to criticize as the court will do that rather quickly once the lender seeks to lift the stay and you bring up the "argument." What I am going to suggest is that you search this site as there are many posts dealing with the "game" you are about to undertake. Don't believe all of the crap out there saying you are entitled to a free house. Garbage. All you will do is delay the loss of the home. Now, that may be your intent. . . stick it to the lender as long as you can. . . and, if so, go for it. But, please do not put into your head that you are going to get a free house. Simply won't happen.

Please keep us posted as I know all of us "regulars" would be very interested in how long you get to play the game. One pro se in my district has kept this fire burning for nearly 3 years. Although, I suspect, finally, by the end of September he too will be booted out.

Des.

[newstart9]

Thanks for your reply. It is candid and logical. I agree with you that in the big picture, there is no free lunch and that goes for me too.

ok - i shall list on schedule d but what name of the creditor i put, the original lender i guess because if i put the current servicer's name then it is moot. what if do not put the property on schedule d at all?

also, i am not questioning the "show me the note" .. what has happenned is that original lender has been paid and note is securitized and sold on wall street to shareholders.. the current lender just brought it as unsecured for pennies on the dollar. so you are right, the note does belong to somebank but not the current bank.

[despritfreya]

i am not questioning the "show me the note" .. what has happenned is that original lender has been paid and note is securitized and sold on wall street to shareholders.. the current lender just brought it as unsecured for pennies on the dollar. so you are right, the note does belong to somebank but not the current bank.

Yes you are. You are asserting that the current servicer has no right to payment (as a secured creditor) as it is not servicing the lender than holds the note AND the deed of trust. You are asserting that by securitizing the note (and allowing MERS to keep the DOT in its possession - someplace) the two have been separated and therefore the "holder of the note" cannot foreclose. You are asserting that an assignment of the DOT by MERS, unless accompanied by an assignment of the note (which MERS has no authority to do) does not give the servicer the right to foreclose. You are asserting that only the original lender could assign the note. This is the "show-me-the-note" argument and, as you will find out, is nothing more than a delay argument. But, it is a good delay tactic if the servicer's proof of claim does not have all of the requisite documents. It forces the servicer to get its paperwork in order. Once that happens standing is proven and the home goes by-by.

If you have access to PACER pull up the following case:

In re Doble
Southern District of Ca
Case No. 10-11296
Adv. No. 10-90308
Memorandum decision 4/14/11

It should not cost anything to download the opinion.

Even in this case, after the debtor obtained a default judgment and the judge slammed Option One and Deutsche Bank the court held that Deutsche Bank, after jumping through many hoops regarding obtaining a proper endorsement and assignment of the note, was the proper party to enforce the note. What has happened since this ruling I do not know but it is just another example of a debtor’s ability to throw road blocks up, but not a debtor’s ability to get a free house.

You might also want to take a look at

In re Aniel, 427 B.R. 811 (Bankr. N.D. Cal., 2010)
In re Lee, 408 B.R. 893 (Bankr.C.D.Cal., 2009) - not quite your issue but interesting

As to how you would list it on D, I cannot comment since I do not agree with your position. Maybe someone else on the board can respond.

Des.

[forgotten]

You are not getting a free home, simple as that.
Ignoring everything Des said, which is 100% correct. Lets say it is an unsecured debt, now you are over your exemption limit, which is up to $75k from what I can tell. So you need to pay at least $325k + trustee fees in to the plan. Can you afford payments of around $6,000/mo?

Think long and hard before you file bankruptcy just to delay a forclosure. What is the point of filing a bankruptcy you will never complete and get a discharge for? Only file if you are going to surrender your home or if you are able to catch up and continue to make payments in a CH13.

[despritfreya]

Lets say it is an unsecured debt, now you are over your exemption limit, which is up to $75k from what I can tell. So you need to pay at least $325k + trustee fees in to the plan.

Wow, good point. Didn't even think of that. I think the argument goes something like this. . .

1. No one knows who holds the note.
2. Since the Note and D of T must stay together, if we don't know who has the note there may be no debt to support the D of T.
3. If the D of T has no debt behind it, it is a cloud on title and should be judicially removed.
4. Once removed there is no lien on the property.
5. Since the lien is gone, a bk trustee is free to sell the property as the property now has tons of equity.
6. Once sold the debtor gets his/her homestead proceeds and the rest goes to creditors.
7. If debtor still wants the property debtor must file a reorganization (13 or 11) and pay the non-exempt value to the creditors.

Wonder why 7 Trustees and/or unsecured creditors have not jumped on the bandwagon? Sounds like a money fest to me. (Yes, I am being a bit sarcastic.)

Des.

[newstart9]

Thanks for your replies. I am seriously re-considering now that I have read the expert opinions. I agree that there is no free lunch and unless my income increases and I list the home in chapter 13 plan, it is a slippery slope..

Des mentioned in his previous post : "Please keep us posted as I know all of us "regulars" would be very interested in how long you get to play the game. One pro se in my district has kept this fire burning for nearly 3 years. Although, I suspect, finally, by the end of September he too will be booted out"

Would you please give the case number if possible.? Many thanks..

[despritfreya]

Would you please give the case number if possible.?

Sure, no problem. The debtor, I believe is all over the Internet.

The next hearing is set for tomorrow. It’s the Motion to Dismiss 11-847.


In re Bailey:

2-09-bk-6979 - Main case

2-09-ap-1728 - Adversary he strung along for 2 years. IMHO the Judge allowed this and hence made a mockery of our judicial system.

2-11-ap-847 - filed shortly after the prior adversary was finally dismissed (w/out prejudice). Different Judge so maybe a quicker resolution - but by doing this he has not made a payment (pre or post petition) since May, 2008.

Des.

[despritfreya]

Too late to edit.

While I was getting ready for work I realized that I forgot to mention this:

The Bailey case is out of the District of Arizona.

Des.

[despritfreya]

Update on the infamous Bailey case.

Finally, after being allowed to keep the bank's property since March, 2008 without making a payment (2 years while in bk), the judge has directed that the adversary proceeding be dismissed with prejudice. Next thing that will no doubt happen is either the filing of a Motion to Reconsider, which will not be granted, and/or the filing of a Notice of Appeal. The debtor will have to seek a stay pending appeal and, fortunately, it is highly unlikely that such a stay will be granted, but, once again, there will be a delay in the return of the property to the bank (probably another 4 months). Once the property is foreclosed the appeal will be moot and therefore dismissed. After the property is foreclosed it will take the bank at least 3 months to evict. That brings us to March, 2012 - 4 full years living rent free. The debtor played his cards very well and was lucky to have a judge (the 1st one) that became his partner in the game.


Des.

[catleg]

Des, what do you think of this case out of Massachusetts:

http://www.scribd.com/doc/62939955/In-Re-Schwartz

[despritfreya]

Des, what do you think of this case out of Massachusetts:http://www.scribd.com/doc/62939955/In-Re-Schwartz

This is so wrong. This lady refinanced the home in July, 2005. Less than 1 year later (May, 2006) the foreclosure process was started. That means she made very few, if any, payments on the new loan. IMHO she stole the lender’s money. To add insult to injury, the judge, just two days ago, set aside the foreclosure that took place in May, 2006. This lady has lived in that home for over five years without making a payment. Now, I agree, the lender screwed up. It should have had the assignment before May, 2006 as is required under Mass. law. But, by the same token, this lady should not be allowed to milk the system like this. Enough is enough, even for me.

A review of the administrative and adversary dockets show a sorted history. From the lender’s attempt to get the stay lifted to a denial of its Motion for Summary Judgment and its attempt to appeal a non-appealable order. In actuality the Judge, after years of litigation, in March, 2011, found in favor of the lender on all of the counts of the complaint. However, after reviewing the debtor’s Motion to Reconsider, the judge realized that he misinterpreted Mass. law. He held a new trial on the 1 count that dealt with the timing of starting a foreclosure. He found that the lender had not received the assignment before the 1st publication and, on that count only, found in favor of the debtor. But, his ruling on all of the other bogus counts remained unchanged. The lender should now be able to take steps to re do the foreclosure and, maybe, in about 6 months this debtor will have to move on.

Des.

[justbroke]

As we always say, Des, you can delay delay delay, but the lender will eventually get the paperwork right and foreclose.

[catleg]

I am all in favor of the lender foreclosing, to clean up the real estate mess (I have a vacant house 2 door down that I am worried about), but I would also like to see the responsible parties (for the securitization "fraud" mess) held accountable. Three cheers for this NY AG guy who is holding up the "sweep everything under the rug" settlement.

Seems like that is going to mean consensual ways of getting debtors out of houses where the chain of title has been broken by MERS. i.e. cash for keys, deed in lieu.

I agree nobody deserves or gets a free house. But nobody wants to admit how bad a condition the banks are in, that's the root issue here.

[justbroke]

I don't think that the securitization was the problem. The problem was, and still is in my book, the process around processing foreclosures for properties that were bundled (and sold) in mortgage-backed securities. No one complained, especially the politicians, when the economy was super-hot and home ownership was at an all time high! Tax revenues were outrageous and most municipalities just spent-spent-spent. Now that the ugly truth emerges, we are all running for cover and trying to preserve what little we have.

In the case of this particular thread, I think that there are issues with the security instrument (mortgage) having not been recorded. I wonder why the Trustee didn't pick up on this, but Florida has an unlimited homestead exemption. The Trustee, in Florida, wouldn't have much to work with, except that I've read some cases which suggest that the debtor would only be entitled to "equity" in the property... not the windfall from an avoidance of the mortgage. It is certainly interesting and I would be inclined to take a closer look at the recordation or lack thereof.