My trustee just denied Wells Fargo relief from stay.....????

[Panacea]

because the deed of trust is defective and invalid, it fails to contain the requisite Affidavit of Consideration. The deed of Trust does not contain an oath or affirmation of the party secured by the deed of trust that the consideration recited in the deed of trust is true and bona fide as set forth. Rather, only the notary endorsement is reflected on the form affidavit.

In the absence of a valid affidavit of consideration, the Deed of Trust is void against creditors without notice.

The trustee says....Deny the motion seeking relief AND grant such other and further relief as is just and proper.

WHAT DOES THIS MEAN????????????

[tobee43]

wow...it sounds like they lost??? but what do i know???? i mean what does that mean"

the deed of trust is defective and invalid, it fails to contain the requisite Affidavit of Consideration

AND that the deed of trust is void.....against teh creditor which is the bank....i don't think the bank is happy!!!

hope someone knows exactly what it means...

[despritfreya]

1st, the Trustee does not deny anything. The Judge does.

2nd, if the Judge denied the Motion to Lift the Stay he/she did so because the Movant failed to establish proper standing to bring the Motion. Once the Movant files the proper documents, it will renew the Motion and, presumably get stay relief.

3rd, you are in a Chapter 7, the protection of the automatic stay lifts as to you, when you get your discharge and, as to the Trustee/Estate, when the case is closed. Therefore, all the lender has to do is wait. Once the Stay is lifted by operation of law, it can proceed with foreclosure under State law.

So, unless there is a Court Order releasing the lien from the property eventually the lender will foreclose. Is there such a Court Order?

Des.

[Panacea]

I have no idea.....the trustee is the one requesting the motion be denied on all the paperwork, so I was going with what all the documents say......the title is incorrect, it has not be denied, the trustee is requesting it be denied by the court. My apologies.

I guess my question is, whats with the deed? What do they mean its defective and such? So, if they go for foreclosure after all is said and done with a defective deed, thats okay?

[despritfreya]

So now I understand. The Trustee filed a Response to the Motion for Relief indicating that the lender may not have perfected its lien against the property. If the lien is not properly recorded or defective in some way then the asset can be liquidated for the benefit of the bk estate. The lender will now have to ask for a Hearing to determine if it has a properly perfected lien against the property. In the end, the property will be sold and, in settlement, the Trustee will make a few bucks.

Des.

[Panacea]

So the mortgage could become basically unsecured, for lack of a better word, and the worth of the home distributed to my other creditors, and the trustee? Sorry if I sound dense, just not quite comprehending all of this......

[HHM]

So the mortgage could become basically unsecured, for lack of a better word, and the worth of the home distributed to my other creditors, and the trustee? Sorry if I sound dense, just not quite comprehending all of this......

Yes

[Panacea]

WOW! Thanks for the info all.

[tcreegan]

Hi all, Hi Panacea,

....you must have the most vigilant trustee in the country or else they are a real estate lawyer in their day job...

As Des says, the Affidavit of Consideration is needed to record/perfect the deed of trust.

What we are talking is a 1-page, notarized document where the seller swears an oath that the terms in the contract are "true and bona fide" The document was there, it was notarized, but your trustee noticed the oath wasn't there....one paragraph missing.

...one paragraph in the middle of 1 page!!

But that 1 paragraph might be worth 8 grand to the trustee..commission

And then I thought...what about Panaceas homestead exemption?

....ah, the lender will probably re-record and all for naught

Tom in Colo

[Panacea]

No kidding!!!! So will this mean they will deal with this between them and I don't have to get involved in anyway? And, will it delay the discharge?

[helpme2010]

To me this sounds awesome. I think creditors lifting the stay should not be allowed. They should have to wait until the BK is discharged. So it sounds like your judge really stuck it to those greedy SOB's. Congrats!!!

[dneil]

I think it was Tobee who posted an article on here where the bank had sold these peoples loans a few time. In that process it was NOT properly recorded. The bank was trying to foreclose. Well, they ended up going to court because the people buying the house were fighting the foreclosure. In the article the judge basically told the bank they couldn't take the house, and not only that.... the people who were fighting the foreclosure now owned the home free and clear. I am sure Tobee understood the article much better than I, but we both came to the same conclusion.

I will look for the article...

[helpme2010]

This story also makes me think about that old lady that has fought her foreclosure for what like 20 years now. I keep shouting, "Right on Granny, fight them to the very end!!!"

[Panacea]

Thanks all again! I have another question, should this mortgage become unsecured....would it turn my BK into an asset case?

[despritfreya]

Panacea,

Yes, if the Trustee liquidates the asset (or settles with the lender) you will be an "asset" case.

Tom makes a valid point. Is this property your residence? If it is, did you claim your allowed homestead exemption? This is very important as if there is no valid lien against the property, when the Trustee sells it, he has to pay you your allowed exemption.

Some of the posters are mixing issues.

Your issue does not appear to be "they lost the note therefore cannot foreclose" - which, IMHO is an eventual loser of an argument.

Your issue (if my assumptions are correct) has much more validity to it. If the creditor failed to properly perfect the lien there simply is no lien on the property as it relates to the "strong-arm" powers of a Chapter 7 Trustee. The Trustee can sell the asset (house) and does not have to pay the lender since the lender, in the eyes of the bk court, is nothing more than a general unsecured creditor. The lender will share equally with all general unsecured creditors in the eventual distribution.

There have been other posters who have fallen into a similar situation. The most recent was someone with a vehicle where the lender prematurely released its lien. There was another one (might not have been on this Forum) who had a Condo. The Trustee discovered that the mortgage lien on the Condo had not been properly recorded and was going to sell it. So, while rare, these things do happen.

Des.