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Purchase money stripped jr trust deed proof of claim in Ch 13 as unsec creditor
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I agree with Cliff. There is a promissory note tied to any mortgage
(2nd, 3rd or umpteenth) which creates a personal obligation. Just
because there is no obligation in the event of a foreclosure, in other
words, the promissory note is canceled by operation of law, doesn't mean
there's not an unsecured claim.
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This seems wrong to me. The antideficiency protection on purchase money loans arises from CCP 580b, which states that "No deficiency judgment shall lie in any event *after* a sale of real property..." In the context of a Chapter 13 lien strip, there is no "sale of real property," so there is no deficiency--and no loss of the right to pursue a deficiency.
The lien strip is not effective until the debtor completes their payments or receives a discharge. Accordingly, if the debtor defaults on the Chapter 13 plan payments, then the creditor will still have the right to pursue either judicial or nonjudicial foreclosure. Given that the creditor still has a contingent right to pursue foreclosure (if there is a default), I don't see how the creditor could be denied both a secured claim and an unsecured claim while the Chapter 13 case is pending
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> Mark:
> I would agree. As there was never any personal liability on the note, I cannot see any way that the stripping of the lien would create the liability.
> Pat G
> Sent from my Verizon Wireless BlackBerry
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> -----Original Message-----
> Sender: cdcbaa@yahoogroups.com
> Date: Thu, 31 May 2012 20:29:06
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> Subject: [cdcbaa] Purchase money stripped jr trust deed proof of claim in Ch 13 as unsec creditor
>
> Purchase money junior trust deed holder lien stripped in Chapter 13. Since it was purchase money, is the stripped junior trust deed holder entitled to be paid as a class 5 general unsecured creditor on what is a nonrecourse loan? I do not believe it has a right to be paid on such a nonrecourse obligation. Thoughts?
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>
> Mark Jessee
>
The post was migrated from Yahoo.
Purchase money junior trust deed holder lien stripped in Chapter 13. Since it was purchase money, is the stripped junior trust deed holder entitled to be paid as a class 5 general unsecured creditor on what is a nonrecourse loan? I do not believe it has a right to be paid on such a nonrecourse obligation. Thoughts?
Mark Jessee
The post was migrated from Yahoo.