June 2, 2015
TO ALL FORECLOSURE ADVOCATES and HOMEOWNERS
I previously advised to ALWAYS make OBJECTIONS in the court below. They are usually waived on appeal if not made below (few rare exceptions-like when Ap Ct wants to create stare decisis on one of their pet issues.
THIS USSC CASE IS A PERFECT EXAMPLE OF WHAT I HAVE BEEN PREACHING FOR YEARS!
This is about SECOND TRUST DEEDS in Chapter 7 BK case. Are they discharged where the FIRST TD AMOUNT is MORE than the appraised or market value of the home; hence they would not be paid off in foreclosure (value=00)
The Ch7 BK trustee usually allows debtor to keep home where it is "underwater" as they is no current value to the estate.
In this case, debtor argued the second TD was invalid and wanted to expunge it. USSC said NO. The amount of the second TD vis-a-vis current value of home is not the determining factor because values constantly fluctuate resulting in a non-workable rule. The high court said the rule is that the second TD secured by the property remains valid post-petition UNLESS the claim has been "disallowed" during BK because debtor's objection was sustained.
Accordingly, if you FAILED to TIMELY FILE FORMAL OBJECTIONS TO THE 2ND TD bankster's claim it was "allowed" by YOUR DEFAULT in not objecting to it. This assumes a claim was timely made by bankster (usually it is).
BOTTOM LINE: you must have OBJECTED to the claim during BK. If the court overruled your objections the SECOND TD is good and survives BK. If your objections was sustained it is discharged.
THIS IS WHERE YOU ARGUE FRAUD, FORGERY, VIOLATIONS OF TILA, ETC. AND ALL OF THE TITLE 18 BANKING CRIMES.. REMEMBER BK is a federal court and they often enforce those federal statutes.
Click here for the 6/1/15 USSC decision, which is now the law in all courts (state and federal) in all 50 states. USSC decisions are MANDATORY AUTHORITY and must be applied.
This is an important email. I advise you save this to your hard drive.
Recheck your bk papers. if the court sustained your objections to second or third TD it is discharged and you can file quiet title in state court to expunge the lien.
If you DID NOT FILE AN OBJECTION in your CH 7 BK the lien is valid and can not be expunged in a quiet title action in state court.
This reinforces my prior preaching about how IMPORTANT it is to always file formal OBJECTIONS. It costs nothing to file them and preserves your rights on appeal and for later use.
Nancy Duffy McCarron, CBN 164780
Attorney, Real Estate Broker, BBB Arbitrator, CA Notary Public
Certified Forensic Loan Auditor, Property Manager
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