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Purchase money stripped jr trust deed proof of claim in C=
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I agree that CCP 580(b) clearly addresses deficiency after sale, but
CCP 726's one action rule requires the lender to pursue the security
interest first prior to persuing peronal liabilty against the borrower.
Accordingly under CA law the lender cannot persue the borrower
personally before or after foreclosure on a purchase money security
interest. IF the junior lien were stripped immediately in the Chapter
13, I would agree that there was no security interest and the lender
would be able to participate in the distribution to general unsecured
creditors. However, the lien still exists until discharge/plan
completion. So how does the lender acquire that right to persue
personal liability in bankruptcy when it still has a security interest
until discharge? Otherwise the lender would be participating in
distribution to general unsecured creditors and if the case were
dismissed for some reason, the lender would have collected money in
violation of the security first rule of CCP 726 when it still had a
purchase money security interest.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868 (805) 497-5864 (Facsimile)
On Thu, 31 May 2012 15:15:35 -0700, "Steven B. Lever" wrote:
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, doesntmean theres not an unsecured claim.
Behalf Of clifford_bordeaux
Sent: Thursday, May 31, 2012 3:10 PM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Re: Purchase money stripped jr trust deed proof of
claim in Ch 13 as unsec creditor
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
>
> 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
>
> -----Original Message-----
> Date: Thu, 31 May 2012 20:29:06 To: Reply-To: cdcbaa@yahoogroups.com
> 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?
>
>
> Mark Jessee
>
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charsetF-8
p{margin: 0;padding: 0;}I agree that CCP 580(b) clearly
addresses deficiency after sale, but CCP 726's one
action rule requires the lender to pursue the security interest first prior to
persuing peronal liabilty against the borrower. Accordingly under CA law
the lender cannot persue the borrower personally before or after foreclosure on
a purchase money security interest. IF the junior lien were stripped
immediately in the Chapter 13, I would agree that there was no security interest
and the lender would be able to participate in the distribution to general
unsecured creditors. However, the lien still exists until
discharge/plan completion. So how does the lender acquire
that right to persue personal liability in bankruptcy when it still has a
security interest until discharge? Otherwise the lender would be
participating in distribution to general unsecured creditors and if the case
were dismissed for some reason, the lender would have collected money in
violation of the security first rule of CCP 726 when it still had a purchase
money security interest.
Mark T. JesseeLaw Offices of Mark T. Jessee"A Debt Relief
Agency"50 W. Hillcrest Drive, Suite 200Thousand Oaks, CA 91360(805)
497-5868 (805) 497-5864 (Facsimile)
On Thu, 31 May 2012 15:15:35 -0700, "Steven B. Lever"
<sblever@leverlaw.com> wrote:
The post was migrated from Yahoo.
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
Sender: cdcbaa@yahoogroups.com
Date: Thu, 31 May 2012 20:29:06
To:
Reply-To: cdcbaa@yahoogroups.com
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?
Mark Jessee
The post was migrated from Yahoo.