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HOA Super Priority Legal Battles Continue in the Silver State: What Senate Bill 306 Means for Nevada HOAs, Lenders and Homeowners

In 1991, the Nevada Legislature enacted the Uniform Common-Interest Ownership Act (UCIOA) which had been promulgated by the National Conference of Commissioners on Uniform State Laws (NCCUSL) (the Statute). This law provides...more

Naked Liens – Stripping Prohibited

In June, the US Supreme Court decided the case of debtors in bankruptcy desirous of stripping off a lender’s real estate lien that was fully in excess of the fair market value of the real estate. The Supreme Court unanimously...more

Orrick's Financial Industry Week in Review

RMBS Suit Against WMC Mortgage LLC Dismissed as Time-Barred - On July 10, 2015, Judge Alvin Hellerstein of the Southern District of New York granted defendant WMC Mortgage LLC's motion for judgment on the pleadings in an...more

Claim Amount: It Pays To Pay Attention

In re Walker, 526 B.R. 187 (E.D. La. 2015) – The bankruptcy court (1) denied a mortgage lender’s request to file a late amendment to a proof of claim that had been filed on its behalf by the debtor and (2) confirmed the...more

California Supreme Court Grants Review of Homeowner's Wrongful Foreclosure Claims

On July 15, 2015, the California Supreme Court granted review of Boyce v. T.D. Service Company (2015) 235 Cal.App.4th 429. (Supreme Court Case No. S226267.) In Boyce, the Court of Appeal held that a plaintiff's wrongful...more

Home Sweet Homestead

Suppose a debtor denies owning a home and then gives a false address so creditors don’t find out about the home. Can the debtor still claim the homestead exemption in bankruptcy?...more

Florida Court Rules Borrowers Who Surrender Property in Bankruptcy Can't Later Take it Back

Thanks to several recent United States Bankruptcy Court decisions in Florida, mortgage servicers should now expect borrowers who surrender their real property in bankruptcy to not contest foreclosure later. Since the...more

U.S. Supreme Court Resolves Uncertainty Regarding Junior Mortgage Liens in Chapter 7 Proceedings

A recent U.S. Supreme Court case resolves uncertainty as to whether Bankruptcy Code Section 506(d) allows Chapter 7 Bankruptcy debtors to "strip off" (void) junior mortgage liens that are wholly underwater. That uncertainty...more

Foreclosed Property: Related Rights May Be Tricky

Cooper v. WPD Polar Ridge, LLC (In re Poplar Ridge, LLC), 526 B.R. 147 (W.D. N.C. 2015) – After a developer defaulted, the trustee under a deed of trust held a pre-petition foreclosure sale.  The issue was whether the...more

US Supreme Court Decision in Bank of America, N.A. v. Caulkett

In a 9-0 decision released on June 1, 2015, the US Supreme Court ruled, in Bank of America, N.A. v. Caulkett, 135 S. Ct. 1995 (2015), that a debtor in a Chapter 7 bankruptcy proceeding may not void a junior mortgage lien...more

Recording Errors: A Typo Is Not Always Fatal

Deirdra Renee Gause v. Citifinancial Services, Inc. (In re Deirdra Renee Gause), 525 B.R. 35 (Bankr. M.D. N.C. 2014) – A chapter 13 debtor sought a court determination that a mortgage loan was unsecured because there was...more

Recent Unanimous Supreme Court Decision Holds That Underwater Mortgages in a Chapter 7 Cannot be “Stripped off"

The Issue and Background - Debtors David Caulkett and Edelmiro Toledo-Cardona (“Debtors”) each filed for Chapter 7 bankruptcy relief with “underwater” junior mortgages held by Bank of America, N.A. (“Bank”). In other...more

Distressed Downloads - June 2015

A Battle in the Making in the Oil and Gas Sector: Second Lien vs. High Yield Debt - In the oil and gas industry, there is a storm brewing between holders of second lien debt and unsecured high yield bonds. These...more

Cramdown Hurdles Round 3: Try, Try Again

In re Ramz Real Estate Co., LLC, 510 B.R. 712 (Bankr. S.D.N.Y. 2013) – An undersecured mortgagee objected to a debtor’s proposed plan of reorganization on several grounds, including that (1) the plan was not approved by...more

"Strip, Strip Hooray!" - Supreme Court Settles Chapter 7 Lien-Stripping Debate

Twenty-three years after initially visiting the issue, the United States Supreme Court has recently settled what some would call “the single most important unresolved issue in consumer bankruptcy” - whether Chapter 7 permits...more

Supreme Court Reaffirms a Chapter 7 Debtor's Inability to Strip a Lien Against Real Property

Reaffirming its 1992 decision in Dewsnup v. Timm, on June 1, 2015, the U.S. Supreme Court in Bank of America v. Caulkett, No. 13-1421, once again ruled that a chapter 7 debtor may not void a junior lien under Bankruptcy Code...more

U.S. Supreme Court Holds that Out of the Money Mortgages Cannot be Stripped Off in Chapter 7 Bankruptcy Cases

The U.S. Supreme Court held that a secured creditor in a chapter 7 bankruptcy case is protected from having its lien “stripped off” even if the collateral securing its claim is worth less than the claims asserted by a senior...more

The Supremes Tell the Eleventh Circuit: No Lien Stripping

On June 1, 2015, the United States Supreme Court issued a unanimous ruling resolving a split amongst circuit courts in which the 11th circuit was the singular minority, addressing the permissibility of “lien-stripping” in...more

Three Recent Supreme Court Rulings Will Impact Lenders and Investors

Three significant opinions issued by the US Supreme Court in the last few months will impact lenders and investors. Bank of America v. Caulkett - In a major win for the nation’s mortgage lenders and...more

The Supreme Court Continues Stability In The Secondary Mortgage Market

On Monday, the Supreme Court reaffirmed the principle that junior “underwater” residential mortgage liens can “pass through” a bankruptcy case unaffected. In Bank of America, N.A. v. Caulkett, the Supreme Court held...more

Wholly Underwater Junior Liens May Not Be Stripped Off in Chapter 7 Bankruptcy Proceedings

The U.S. Supreme Court has held that a debtor in a Chapter 7 bankruptcy proceeding may not void a junior mortgage lien when the debt owed on a senior mortgage lien exceeds the current value of the collateral, provided that...more

“Deed in Lieu”: Deed That Is Not Really In Lieu Of Foreclosure Will Likely Not Be Treated As a Deed

In re Primes, 518 B.R. 466 (Bankr. N.D. Ill. 2014) – A mortgagee moved for relief from the automatic stay, arguing that it acquired title to property prior to the bankruptcy under a quit claim deed given to it by the...more

The Supreme Court Prohibits Chapter 7 Debtors From Stripping Off Wholly Underwater Liens in Bankruptcy

On June 1, 2015, the United States Supreme Court in Bank of America, N.A. v. Caulkett, 575 U.S. ____ (2015), unanimously held that a Chapter 7 debtor cannot strip off wholly “underwater” liens secured by the debtor’s...more

Supreme Court Decides Bank of America v. Caulkett and Bank of America v. Toledo-Cardona

On June 1, 2015, the United States Supreme Court decided Bank of America v. Caulkett, No. 13-1421, together with Bank of America v. Toledo-Cardona, No. 14-163, holding that a debtor in a Chapter 7 bankruptcy proceeding may...more

Chapter 7 Debtors Cannot Strip Off Junior Liens on Underwater Home Loans, United States Supreme Court Rules

Yesterday, the United States Supreme Court ruled that debtors in Chapter 7 bankruptcy cases cannot “strip off,” or completely void, junior mortgages that—based on the value of the property and the amount of claims secured by...more

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