Interest accruing

[despritfreya]

flashoflight

Quite frankly I wish courts would assess fees more often, especially when the homeowner has already filed bk and cannot attempt to discharge the assessment. And. . . this is coming from a "debtor's attorney" who is extremely sympathetic to the little guy.

From the very beginning, the "show me the note" type arguments were (and still are) for the most part bogus. Admittedly, there are a few exceptions.

I'm a homeowner. I borrowed $x to purchase my home. I signed a document that said that I promised to repay the loan and, if I fail to, I lose my home. That was the deal I made to get the home and that is the deal I need to complete to keep the home.

The argument that the home is worth half of what it was when bought - therefore the lender should reduce what is owe is BS. The argument that the loan was sold to some securitized trust which "closed" before the date of the transfer is BS. The argument that some insurance paid off the loan therefore the borrower gets it for nothing is BS. If you borrowed the money and you want to keep the home you need to pay for it - plain and simple. If you think you are paying the wrong entity ok, but. . . are you going to bank each and every payment so you can pay it to the correct entity? Nope - you either don't have the money to pay or you are going to use it for something else.

The more these courts start charging fees against borrowers who have BS claims, the fewer BS claims will be made. This should have happened years ago.

Just my humble opinion.

Des.

[flashoflight]

From the lender's brief on why the debtor should pay the lender's legal fees incurred for the appeal:

Shellpoint and MERS provide notice they intend to claim attorney's fees and costs under A.R.S. § 12-341.01(A) and Arizona Rule of Civil Appellate Procedure 28 21(a) if the prevailing parties in this appeal.

Shellpoint and MERS are entitled to their fees under the six factors enumerated in Associated Indemnity Corporation v. Waner, 694 P.2d 1181 (Ariz. 1985). The Court evaluates

1) whether the unsuccessful party's claim was meritorious;
2) whether the litigation could have been avoided or settled and the successful party's efforts were completely superfluous in achieving the result;
3) whether assessing fees against the unsuccessful party would cause extreme hardship;
4) whether the successful party prevailed on all relief sought;
5) the novelty of the legal question presented and whether such claim had previously been adjudicated in this jurisdiction; and
6) whether the award would discourage other parties with tenable claims or defenses from litigating or defending legitimate contract issues for fear of incurring liability for substantial fees. Id.; see also Wagenseller v. Scottsdale Mem. Hosp., 710 P.2d 1025, 1049 (Ariz. 1985) (superseded by statute on other grounds) (applying factors to appellate courts).

[despritfreya]

It's not normal for the prevailing party to also get attorney's fees unless the intent is to discourage similar cases from being filed in the future.

This may depend on State law. In Arizona, a successful party in a contract dispute may be entitled to reasonable attorney's fees even if such is not provided for in the actual contract. See ARS 12-341.01.

Des.

[flashoflight]

The court also decided the debtor has to pay the lender's attorney fees incurred for this debtor initiated appeal. This is a sign that the court thought this case was a joke since one of the factors for the court to consider is whether the appellant had a meritorious case. Another factor is whether there was a novel legal question, which there was not. It's not normal for the prevailing party to also get attorney's fees unless the intent is to discourage similar cases from being filed in the future. I'd listen to the mod on the other forum too.

[justbroke]

Thank you despritfreya for the followup!

[despritfreya]

cookiemom

This is a follow up to my last comment (post 32 above). As anticipated, the Court of Appeals, Div 1 did not agree with the homeowner and affirmed the lower court's decision. This is the correct outcome and I tend to doubt Larry will seek AZ Supreme Court review.

Here is a link to the Appellate decision:

https://www.azcourts.gov/Portals/0/OpinionFiles/Div1/2022/CV%2021-0007%20Luu,%20et%20al.%20v.%20New%20Rez,%20et%20al.%20OP.pdf

Based upon the posts on the other forum, it appears you have gone down the proverbial "rabbit hole". Please be careful about how much money you dish out to your attorney.

Des.

[cookiemom]

Interesting...I'll have to check how my state handles and if there's an acceleration clause in my note. They can't have it in there to protect their interests in a bankruptcy to then later not allow to avoid SOL. I am finding though...no case is the same. Things I have been able dig up just thickens how corrupt these banks can be. I definitely not trying to walk away with zero obligation though, I just want a fair and reasonable agreement or at least see their methodology as to how they arrived at what I owe. Regardless if they are within the sol to foreclose by law they are only entitled to so much

"undersecured creditors deserve appreciation misses the reality that appreciation derives from more than rising markets. It is also attributable to the debtor’s pay-down of the senior interest and investments in improvements. Even if an undersecured creditor were entitled to market appreciation, nothing justifies access to the value of additional increments produced by the debtor’s post-petition efforts."

[flashoflight]

Lender's brief in the above case:

https://s3.amazonaws.com/ClubExpressClubFiles/751070/attach/2867429_0_Response_Brief_ACBC_Luu.pdf

[cookiemom]

Thanks I've also been investigating the below; based on this, it should have been offered to me since my first was approved for a HAMP MOD in 2010


August 13, 2009, the Treasury Department published supplemental directive 09-05 for the Making Home Affordable Program, which discusses in detail the procedure for modifying second-lien mortgages, known as the Second Lien Modification Program (2MP).20 Under this program, "when a borrower's first lien is modified under HAMP and the servicer of the second lien is a 2MP participant, that servicer must offer either to modify the borrower's second lien according to a defined protocol or to accept a lump sum payment from Treasury in exchange for full extinguishment of the second lien. The 2MP offer will be made in reliance on the financial information provided by the borrower in conjunction with the HAMP modification and without additional evaluation by the second lien servicer."


https://consumercomplianceoutlook.or...quarter/q3_02/

[despritfreya]

cookiemom

Please listen to the following regarding your argument that the SOL began to run upon entry of your discharge. The final (under advisement) decision has not been rendered yet.

https://www.youtube.com/watch?v=8zWsv-1btaw&ab_channel=ArizonaCourtofAppealsDiv.1

The recording quality is bad but, if you listen carefully, you can make everything out.

My guess. . .

Arizona Court of Appeals, at least in Division One, will not agree with the unpublished 9th Cir. decision and/or any decisions that were based upon Washington law. Only time will tell. If homeowner loses, Larry (their attny) might seek State Supreme Court review. I will keep this in mind and ask him once the ruling comes down.

Des.

[despritfreya]

. . . could it not be argued that the loan is only secured by the equity which exists at the time of filing for Chapter 13 bankruptcy, and not in the entire amount of the (alleged) debt, which might be much higher? A $250k debt secured by a $120k house is not worth $250k, even if the house is owned free and clear. Similarly, in the context of Chapter 13 bankruptcy, doesn't the creditor have to provide proof of their claim, or are you suggesting that whatever payoff amount is demanded will be taken at face value--regardless of whatever documentation the current creditor may or may not possess as to how they arrived at this amount?

1. In the 9th Circuit, valuation is determined at the time of Confirmation.

2. In the context of a Chapter 11 or 13 a senior lienholder that is secured only by the principal residence is not subject to any cram-down regardless of the value of the property vs. the amount of the debt.

3. In the context of a Chapter 13, a senior (and/or junior) lienholder that is secured by something other than the principal residence could be subject to a cram-down but the secured claim, with Till rate interest, must be paid in equal monthly installments over the life of the Plan - something that is rarely feasible for a debtor.

4. In the context of a Chapter 11, a senior (and/or junior) lienholder that is secured by something other than the principal residence could be subject to a cram-down and the secured claim can be paid over an extended period of time if such is "fair and equitable". However, the creditor has the right to make what is called an 1111(b) election which is too complicated for me to explain in the limited time I have.

5. In the context of a Chapter 11 and 13, a junior lienholder that is under-secured (as opposed to wholly unsecured) and that is secured only by the debtor's principal residence cannot be subjected to cram-down. There is one exception and that is under Subchapter V of Chapter 11. If the junior loan was taken out and used for business purposes, the anti modification provision does not apply but. . . the 1111(b) election may apply.

As to the Proof of Claim, if the debtor believes the amount of the claim is inaccurate, he or she can object to the claim.

Under Bankruptcy Rule 3001(f), a POC is prima facie evidence of the validity of the claim. Under Bankruptcy Rule 3002.1 a creditor secured by a debtor's principal residence must file a very detailed claim. Under Rule 3007 an objection to the POC can be filed. Unless or until the objection is sustained, the POC stands.

Des.

[cookiemom]

Bankruptcy courts have utilized various approaches in resolving this issue.
Some courts, a seeming majority, have held that the petition date is the correct date for
valuation, while a few others have held that the confirmation date is the correct date. Compare
TD Bank, N.A. v. Landry (In re Landry), 479 B.R. 1, 7 (D. Mass. 2012) (concluding that the petition date is the proper date for valuation) with In re Williams, 480 B.R. 813, 817 (Bankr. E.D. Tenn. 2012) (concluding that the confirmation date is the proper date for valuation). Courts utilizing the petition date also vary in deciding whether to make the rule a bright line test applicable in all future cases, or to adopt a flexible approach based on certain equitable factors. Compare Hegeduis, 525 B.R. at 84-86 (holding that test is the date of filing of the petition date with adjustments to be made based on weight of evidence) with In re Cooper, 11-02804-8-JNC, 2016 WL 3344839, at *5 (Bankr. E.D. N.C. June 8, 2016) (applying a flexible approach requiring courts to consider several equitable factors). See also In re Fuqua, 12-52348, 2015 WL 5678361, at *4 (Bankr. E.D. Mich. June 10, 2015) (creating a rebuttable presumption that the petition date is the proper date of valuation, which the non-moving party can overcome by persuading the court to apply a different date based on equitable factors such as the debtor converting the case multiple times). For the reasons below, the Court determines the date of valuation in this case is the petition date, August 30, 2014.

[bcohen]

No. . . In no way will a Chapter 13 today (or any day) work if there is even 1 penny of equity over the amount owed to the senior lienholder. The anti modification provisions of 11 USC 1322(b)(2) forbids modifying a mortgage that is solely secured by a debtor's principal residence.

I am aware of what the law says, however could it not be argued that the loan is only secured by the equity which exists at the time of filing for Chapter 13 bankruptcy, and not in the entire amount of the (alleged) debt, which might be much higher? A $250k debt secured by a $120k house is not worth $250k, even if the house is owned free and clear. Similarly, in the context of Chapter 13 bankruptcy, doesn't the creditor have to provide proof of their claim, or are you suggesting that whatever payoff amount is demanded will be taken at face value--regardless of whatever documentation the current creditor may or may not possess as to how they arrived at this amount?

[cookiemom]

I am really trying to take the high road in this, I just can't can't see the value in paying that much now for my house. They are seeking every penny of equity. And by equity takes into consideration what I've paid into 1st and improvements. F'ing foreclose then...if that my option. I'm a single mom working from home with a toddler not wanting to uproot her from her home but at that cost I could find a home with way less updates needed. I'm just shooting for something...something here to fight them on

[cookiemom]

Sorry..just trying to not let a bank take 100k from a 42k loan that I have done my due diligence to reaffirm.