Comment

Comment by Rob E. Kirchner on July 16, 2013 at 3:54pm

Thanks to both of you-good input.  I will gather more info and look at the discharge papers for clues.

Comment by Paddy Deighan, JD PhD on July 16, 2013 at 2:59pm

Joe, it may be logical, but Courts can only look at the present and not consider the future. If the debtor makes the appropriate argument, the Court will remove the second.  Courts cannot project into the future, but rather, deal with what is in front of them.

Comment by Joe Beauchamp on July 16, 2013 at 2:26pm

Paddy, it's logical that the court leave the 2nd on the property so that an increase in property value (later) might pay back some of the debt to the 2nd when the property is sold. You're saying the court basically screws the 2nd out of possibly recouping some at a later date by stripping it from the property (too)? That's what I thought I've seen, but it didn't make sense to me - which is why I'm asking - for confirmation..

Comment by Paddy Deighan, JD PhD on July 16, 2013 at 1:27pm

Rob, there is more to this...the debtor cannot "select" debts to include in BK...all creditors must be listed and there are ramifications for not doing this. The "cram" down issue applies only to Chapter 13 and personal Chapter 11's.  The second (and subsequent junior liens) are "stripped away" if there was negative equity. The theory is that you cannot have a secured interest in something of negative value.

If the BK is discharged, you do not need to do anything and you can list and sell the property, "IF" the property was abandoned by the trustee (all but guaranteed if the property has little or no equity).  

If the debtor is NOT discharged, OR abandoned by the trustee, you have to get BK court permission to  list the property and you have to get approval to be the agent (submit your CV and answer minor questions).

If she is discharged , she can get relo money from HAFA

Comment by Rob E. Kirchner on July 16, 2013 at 1:18pm

Thankes Joe!

I am having the title company check into it now.  What about HAFA or other Seller incentive $$'s?  Is that still possible?

Comment by Joe Beauchamp on July 16, 2013 at 12:38pm

Real lawyers can screw up a BK, so I assume non-lawyers might just do so, too. Since the BK is not active but discharged, the BK will not be in the way for a short sale. I've heard of a "cram down" for the 2nd, but not sure how that works because it doesn't make sense to me - the cram down being removal of the 2nd from the property and the debt. The BK is supposed to release the person from the debt, however, it does not just give the property to the owner. The 1st cannot ask for financial info from the owner because the BK relieves the owner financially, however, it doesn't free up the property. The BK referee should have looked at the property and seen that there is no "extra" value in it to be spread among the debts. The mortgage is still tied to the property and when you go to sell it, they can demand everything up to what is owed - they just cannot demand it from the owner.

Now, how your owner has made things screwy, you probably need to find out. Why, after a BK, would the 2nd become an unsecured debt instead of NO debt? Makes no sense to me.

After a BK, I expect to have to deal with the 1st and the 2nd in the short sale but not have to get financials to the banks for it. That should be the only difference. You might find the 2nd discharged - probably for their financial reasons - to write off the debt which they cannot do until they give it up. In that case, you don't have to deal with them.

The buyer's title co will be helpful in letting you know what debts are tied to the property at this point.

Comment by Rob E. Kirchner on July 16, 2013 at 11:58am

I have a potential listing where the owner declared BK and it was discharged.  She (the owner) did it thru a "do-it-yourself" BK kit prooduced by paralegals and did not really have a attorney filing.  Her intent was not to include the 1st in the BK however in the final paperwork it was included somehow.  She claims that the 2nd is now unsecured and just a personal note (I am trying to verify this).  Does anyone how to proceed?  She would like to Short Sale and get HAFA relocation money.  Do I need to get the 1st released from the BK and how does one go about that?  Thanks!!!

 

Comment by Amy Givoni on August 18, 2011 at 10:43pm

I have closed files post bankruptcy.  I used www.shortsaledepartment.com to negotiate for me.  They closed them everytime!  All I had to do was wait patiently!

Comment by Paddy Deighan, JD PhD on August 17, 2011 at 8:06pm

in regard to that language, there is more to it than that....as anyone would read that , it would mean that there are no notes, mortgages, deed of trust etc and teh home is owned free and clear by the sellers and we know that this is not the case.  You could log into PACER.gov and review the case your self an perhaps get some clarification...

Comment by Cheri Smith on August 17, 2011 at 7:49pm

Thanks so much Paddy. Yes, it certainly is complicated. The sellers are under the impression that Key is now unsecured because of language in the court order that reads "...the property dealt with by the Plan is free and clear of all claims and interests of creditors of the Debtors." It sounds that way to me too after reading it. You're saying that's not necessarily the case? The sellers are reluctant to get their attorney involved any more because he's so expensive. I'm also having a hard time figuring out who I should be talking to at Key. The short sale department doesn't get it and the Key Bankruptcy dept tells me I need to have the borrowers attorney contact them. So frustrating.

• ‹ Previous
• 1
• 2
• 3
• …
• 5
• Next ›
• Page