Residential Real Estate Bankruptcy

Read Residential Real Estate law updates, news, and legal analysis from leading lawyers and law firms:
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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

Supreme Court Holds That Orders Denying Plan Confirmation Are Not Final for Appellate Purposes

On May 4, 2015, a unanimous United States Supreme Court in Bullard v. Blue Hills, 135 S. Ct. 1686 (2015), resolved a long-standing circuit court split by holding that a bankruptcy court’s order denying confirmation of a...more

Supreme Court Decides Harris v. Viegelahn

On May 18, 2015, the U.S. Supreme Court decided Harris v. Viegelahn, No. 14-400, holding that when a debtor in bankruptcy converts from a Chapter 13 payment plan to Chapter 7 liquidation, any of the debtor’s post-petition...more

Delinquencies, Foreclosures and Bankruptcies Improve as Household Debt Stays Flat

On May 12, The Federal Reserve Bank of New York’s Household Debt and Credit Report revealed that aggregate household debt balances were largely flat in the first quarter of 2015. At of the end of March, total household...more

Foreclosures: Beware Unexpected Violations

Field v. Bank of America, N.A. (In re Gibbs), 522 B.R. 282 (Bankr. D. Hawaii 2014) – A bankruptcy trustee sued a mortgage lender to recover for defects in a prepetition non-judicial foreclosure sale. The lender brought a...more

Supreme Court Bankruptcy Decision Strengthens Creditor Leverage in Plan Negotiations

On May 4, 2015, in the case Bullard v. Blue Hills Bank, the United States Supreme Court held that debtors in chapter 13 (and presumably chapter 9 and 11 as well) are not entitled as of right to immediately appeal bankruptcy...more

Plan Confirmation Feasibility: “I Know It When I See It”?

In re Brandywine Towhouses, Inc., 524 B.R. 889 (Bankr. N.D. Ga. 2014) – The debtor was a nonprofit that owned a low and moderate income housing cooperative. It proposed a plan of reorganization that contemplated...more

Watt Final Order

AIKEN, Chief Judge: Bank of New York Mellon, as trustee for certificate holders of the CWALT, Inc., alternative loan trust 2006-0A21, mortgage pass-through certificates series 2006-0A21 ("BNYM"), appeals the...more

Payments to Investors in a Securitization Structure Protected from Avoidance

In what appears to be a matter of first impression, the U.S. Bankruptcy Court for the Northern District of Illinois recently held that payments made to investors in a two tiered securitization structure commonly employed in...more

Foreclosure Sales: When Is the “Deed” Done?

In re Betchan, 524 B.R. 830 (Bankr. E.D. Wash. 2015) – A mortgagee was the highest bidder at a foreclosure sale that took place shortly before the debtor filed bankruptcy. The lender requested relief from the...more

Reinstatement of a LIHTC LURA following foreclosure

Note: This post is the final part of a continuing series on the Credit Report Blog on the subject of workouts and bankruptcies involving low-income housing tax credit (LIHTC) projects....more

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