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Helping Familes Save Their Homes Legislation
David,
The issue of exceeding the jurisdictional amount of Chapter 13
following the valuation of property subject to liens is, or under
California law, should be a non-issue. As long as the underlying
trust purpose is not extinguished; i.e., the personal debt that is
subject to the lien is not discharged, the lien survives. Therefore,
as a matter of California law, the lender continues to be secured
(undersecured, but nevertheless secured by a lien secured by the
property) and not unsecured, because the lender was pledged the real
property as security, the lien for which survives until there is a
discharge of the underlying note (personal liability) is entered.
And, therefore, you do not want the lien "stripped," as it is commonly
and mistakenly referred, at the time of confirmation or effective upon
filing. Valuation of property and determining the extent a lien is
secured by equity in property does not effect property rights, as does
demanding a lien to be stripped, which requires due process and an
adversary proceeding.
Lou Esbin
>
> The Proposed Legislation:
>
> Section 2: Amendments to Section 109 do NOT appear to solve the
problem of
> having a stripped lien amount added to the general unsecured claim
amount
> making a debtor ineligible for Chapter 13. It DOES deal with post
> foreclosure deficiency amounts which would otherwise cause the
debtor to be
> over the unsecured debt limit. Credit counseling would not be required
> following receipt of foreclosure notice.
>
> Section 3: Amendments to Section 502(b) are completely ambiguous.
On the
> one hand, they appear to confer jurisdiction on the Bankruptcy Court
to hear
> and resolve TILA and other consumer protection claims before the
claim can
> be allowed. On the other hand, they appear to withdraw any jurisdiction
> from the Bankruptcy Court to hear these types of objections.
>
> Section 4: Amendments to Section 1322(b) would specifically allow
Chapter
> 13 lien stripping, or better yet, lien reductions on partially secured
> loans, i.e. first mortgages where the value is lower than the principal
> balance (but doesn't solve the eligibility problem mentioned above).
The
> loan term can be extended and the interest rate can be fixed at a rate
> established by the Fed's Board of Governors plus a "risk premium"
which will
> likely be the subject of extensive litigation.
>
> Section 5: Amendments to Section 1322(c) would require mortgage
lenders to
> file claims or notices of so-called garbage fees or have those fees
deemed
> waived.
>
> Section 6: Amendments to Section 1325(a) would impose a good faith
> requirement on lien reductions and specifically require that the
remaining
> lien on the property survives until the mortgage is completely paid
off, or
> the Chapter 13 discharge is entered - whichever is later. This is
somewhat
> ambiguous because it is unclear whether the surviving lien would
secure the
> original loan amount or the reduced loan amount.
>
> Section 7: Amendments to Section 1328 would clarify that a Chapter 13
> discharge would not discharge the mortgage as modified.
>
> Section 8: Would make these amendments effective as of the date of
> enactment and applicable to all pending or later filed cases.
>
> David A. Tilem
> Certified Bankruptcy Specialist*
> Law Offices of David A. Tilem (a debt relief agency)
> 206 N. Jackson Street, #201, Glendale, CA 91206
> Tel: 818-507-6000 Fax: 818-507-6800
>
> * Bankruptcy specialist cert. by State Bar of CA Bd of Legal
> Specialization.
> Business bankruptcy specialist cert. by Amer. Bd. of Certification
> -----Original Message-----
Behalf Of
> James T. King
> Sent: Wednesday, January 07, 2009 7:54 AM
> To: cdcbaa@yahoogroups.com
> Subject: [cdcbaa] Helping Familes Save Their Homes Legislation
>
>
>
>
> "Helping Families Save Their Homes in Bankruptcy Act" is now out and
ready
> to proceed!
>
> An e-mail from Maureen Thompson, NACBA Legislative Director was on
the list
> serve this morning indicating that Congress would probably be
included the
> new legislation in Obama's economic recovery plan. She also
indicated that
> John Conyers introduced identical legislation in the House of
> Representatives. I have attached the legislation in PDF and will
try and
> put in the documents on Yahoo.
>
> Jim King
>
The post was migrated from Yahoo.
The Proposed Legislation:
Section 2: Amendments to Section 109 do NOT appear to solve the problem of
having a stripped lien amount added to the general unsecured claim amount
making a debtor ineligible for Chapter 13. It DOES deal with post
foreclosure deficiency amounts which would otherwise cause the debtor to be
over the unsecured debt limit. Credit counseling would not be required
following receipt of foreclosure notice.
Section 3: Amendments to Section 502(b) are completely ambiguous. On the
one hand, they appear to confer jurisdiction on the Bankruptcy Court to hear
and resolve TILA and other consumer protection claims before the claim can
be allowed. On the other hand, they appear to withdraw any jurisdiction
from the Bankruptcy Court to hear these types of objections.
Section 4: Amendments to Section 1322(b) would specifically allow Chapter
13 lien stripping, or better yet, lien reductions on partially secured
loans, i.e. first mortgages where the value is lower than the principal
balance (but doesn't solve the eligibility problem mentioned above). The
loan term can be extended and the interest rate can be fixed at a rate
established by the Fed's Board of Governors plus a "risk premium" which will
likely be the subject of extensive litigation.
Section 5: Amendments to Section 1322(c) would require mortgage lenders to
file claims or notices of so-called garbage fees or have those fees deemed
waived.
Section 6: Amendments to Section 1325(a) would impose a good faith
requirement on lien reductions and specifically require that the remaining
lien on the property survives until the mortgage is completely paid off, or
the Chapter 13 discharge is entered - whichever is later. This is somewhat
ambiguous because it is unclear whether the surviving lien would secure the
original loan amount or the reduced loan amount.
Section 7: Amendments to Section 1328 would clarify that a Chapter 13
discharge would not discharge the mortgage as modified.
Section 8: Would make these amendments effective as of the date of
enactment and applicable to all pending or later filed cases.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
James T. King
Sent: Wednesday, January 07, 2009 7:54 AM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Helping Familes Save Their Homes Legislation
ady
to proceed!
An e-mail from Maureen Thompson, NACBA Legislative Director was on the list
serve this morning indicating that Congress would probably be included the
new legislation in Obamas economic recovery plan. She also indicated that
John Conyers introduced identical legislation in the House of
Representatives. I have attached the legislation in PDF and will try and
put in the documents on Yahoo.
Jim King
Message
The Proposed
Legislation:
Section 2:
Amendments to Section 109 do NOT appear to solve the problem of having a
stripped lien amount added to the general unsecured claim amount making a debtor
ineligible for Chapter 13. It DOES deal with post foreclosure deficiency
amounts which would otherwise cause the debtor to be over the unsecured debt
limit. Credit counseling would not be required following receipt of
foreclosure notice.
Section 3:
Amendments to Section 502(b) are completely ambiguous. On the one hand,
they appear to confer jurisdiction on the Bankruptcy Court to hear and resolve
TILA and other consumer protection claims before the claim can be allowed.
On the other hand, they appear to withdraw any jurisdiction from the
Bankruptcy Court to hear these types of objections.
Section 4:
Amendments to Section 1322(b) would specifically allow Chapter 13 lienstripping, or better yet, lien reductions on partially secured loans, i.e. first
mortgages where the value is lower than the principal balance (but doesn't solve
the eligibility problem mentioned above). The loan term can be extended
and the interest rate can be fixed at a rate established by the Fed's Board of
Governors plus a "risk premium" which will likely be the subject of extensive
litigation.
Section 5:
Amendments to Section 1322(c) would require mortgage lenders to file claims or
notices of so-called garbage fees or have those fees deemed
waived.
Section 6:
Amendments to Section 1325(a) would impose a good faith requirement on lien
reductions and specifically require that the remaining lien on the propertysurvives until the mortgage is completely paid off, or the Chapter 13discharge is entered - whichever is later. This is somewhat ambiguousbecause it is unclear whether the surviving lien would secure the original loan
amount or the reduced loan amount.
Section 7:
Amendments to Section 1328 would clarify that a Chapter 13 discharge
would not discharge the mortgage as modified.
Section 8:
Would make these amendments effective as of the date of enactment and applicable
to all pending or later filed cases.
David A.
Tilem
Certified Bankruptcy
Specialist*
The post was migrated from Yahoo.
"Helping Families Save Their Homes in Bankruptcy Act" is now out and
ready to proceed!
An e-mail from Maureen Thompson, NACBA Legislative Director was on the
list serve this morning indicating that Congress would probably be
included the new legislation in Obama's economic recovery plan. She
also indicated that John Conyers introduced identical legislation in the
House of Representatives. I have attached the legislation in PDF and
will try and put in the documents on Yahoo.
Jim King
The post was migrated from Yahoo.