HELP - Creditor Does Post Petition Transfer

[sfsu22]

Hi everyone.. been a reader on the forum and find the info verrrry helpful. Thought I may throw this out there to get more clairification.

Filed for bankruptcy on 6/7/10.. pro se. The reason was to avoid a foreclosure on one of my properties. The lender offered a trial mod, i made 6 months worth of payments, then they decided to deny me a permanent mod and go through with a trustee sale. THOSE BASTARDS!!! j/k

341 meeting set for later this week.

On the original petiton, I listed 2 secured creditors that I thought were secured and my Lenders.

Creditor A - filed a proof of claim stating that the claim is secured by Property A

Creditor B - filed a proof of claim stating that the claim is secured by Property B


Property A - deed of trust (DOD) & note orginally signed on 05/2007 w/ original leder. Per creditor's A claim, DOD was transfered to them on 6/14/10, which is post-petition. As of 5/29 (about 9 days prior to petition), MERS still listed the Original Lender as the current lender and not Creditor A. I looked on the county's recorders office and the assignment/transfer of note & DOD to Creditor A was never recorded. Current value is about $250K less than Note

Property B - Note & Deed of trust originally signed on 4/2008 w/ original lender. Per Credtor's B claim, Note was transfered to them on 7/14/10, which is also post-petition. I looked on the county's recorders office the the assignment/transfer of note & DOD to Creditor B was never recorded. Current value is about $100K less than Note.


QUESTION: Are these post-petition transfers legal? Can I file an objection to the claim stating they are not secured creditors at or prior to the petition date?

[usmccop]

Hi everyone.. been a reader on the forum and find the info verrrry helpful. Thought I may throw this out there to get more clairification.

Filed for bankruptcy on 6/7/10.. pro se. The reason was to avoid a foreclosure on one of my properties. The lender offered a trial mod, i made 6 months worth of payments, then they decided to deny me a permanent mod and go through with a trustee sale. THOSE BASTARDS!!! j/k

341 meeting set for later this week.

On the original petiton, I listed 2 secured creditors that I thought were secured and my Lenders.

Creditor A - filed a proof of claim stating that the claim is secured by Property A

Creditor B - filed a proof of claim stating that the claim is secured by Property B


Property A - deed of trust (DOD) & note orginally signed on 05/2007 w/ original leder. Per creditor's A claim, DOD was transfered to them on 6/14/10, which is post-petition. As of 5/29 (about 9 days prior to petition), MERS still listed the Original Lender as the current lender and not Creditor A. I looked on the county's recorders office and the assignment/transfer of note & DOD to Creditor A was never recorded. Current value is about $250K less than Note

Property B - Note & Deed of trust originally signed on 4/2008 w/ original lender. Per Credtor's B claim, Note was transfered to them on 7/14/10, which is also post-petition. I looked on the county's recorders office the the assignment/transfer of note & DOD to Creditor B was never recorded. Current value is about $100K less than Note.


QUESTION: Are these post-petition transfers legal? Can I file an objection to the claim stating they are not secured creditors at or prior to the petition date?

Just dump them. You're 350k down on them. You can still dump them.

[sfsu22]

Just dump them. You're 350k down on them. You can still dump them.

It's not that simple. One is my principal residence and one is a rental that currently generates $2k/ month, but could be generating closer to $3.5K.

[despritfreya]

The note and security interest are negotiable instruments and can be sold and transferred at will so yes, the originator of the loan can transfer the loan and mortgage at any time and does not need anyone's "permission".

[GA13]

The note and security interest are negotiable instruments and can be sold and transferred at will so yes, the originator of the loan can transfer the loan and mortgage at any time and does not need anyone's "permission".

Fool who buys the lien because they must obey the Bankruptcy order
what ever was ruled on that loan is the new terms, they can't sell the loan and the new owner ignores federal rulings on that loan, if that was true then all the lenders would just "sell off BK's loans" and the new owners would enjoy new terms, what a racket it would be.

[sfsu22]

Fool who buys the lien because they must obey the Bankruptcy order
what ever was ruled on that loan is the new terms, they can't sell the loan and the new owner ignores federal rulings on that loan, if that was true then all the lenders would just "sell off BK's loans" and the new owners would enjoy new terms, what a racket it would be.

The thing I'm not to sure about is the Automatic Stay provision and how it applies to Real Estate Property and transfer of note & deed after the bk filing. I've loooked at some BK code, but not sure if the creditors secured by real estate get some kinda time frame after bk filing to "Perfect Thier Interst".

[despritfreya]

The automatic stay applies to collection, not the transfer of ownership of the note and security. How many times does one see that American Express transfers its claim to E Cast who is actually in the business of buying bankruptcy claims? Nothing wrong with that.

[sfsu22]

The automatic stay applies to collection, not the transfer of ownership of the note and security. How many times does one see that American Express transfers its claim to E Cast who is actually in the business of buying bankruptcy claims? Nothing wrong with that.

[LadyInTheRed]

Nobody created, perfected or enforced a lien against your property. They assigned their interest in the existing lien to somebody else.

Creating, perfecting and enforcing liens are all things creditors do as part of their collection efforts.

property of the estate

Note the text I bolded. The liens are not property of the estate. They are the property of the creditor.

The automatic stay prevents the lender from foreclosing on the property or trying in any other manner to collect on the debt. It does not prevent them from selling the lien to somebody else if somebody is willing to buy it.

[sfsu22]

Nobody created, perfected or enforced a lien against your property. They assigned their interest in the existing lien to somebody else.

Creating, perfecting and enforcing liens are all things creditors do as part of their collection efforts.



Note the text I bolded. The liens are not property of the estate. They are the property of the creditor.

The automatic stay prevents the lender from foreclosing on the property or trying in any other manner to collect on the debt. It does not prevent them from selling the lien to somebody else if somebody is willing to buy it.

Thanks LadyInTheRed.. that makes a bit more sense. But I still am unclear because it seemed that the Creditor transfered the lien to themself (from the original creditor) AFTER the petetion date by dating the transfer of DOD about 9 days after the petition date. In the proof of claim paperwork, i didn't see a transfer of the Note.

[LadyInTheRed]

Thanks LadyInTheRed.. that makes a bit more sense. But I still am unclear because it seemed that the Creditor transfered the lien to themself (from the original creditor) AFTER the petetion date by dating the transfer of DOD about 9 days after the petition date. In the proof of claim paperwork, i didn't see a transfer of the Note.

An assigment of deed of trust usually includes an assignment of the note it secures.

[LadyInTheRed]

Can I file an objection to the claim stating they are not secured creditors at or prior to the petition date?

After my last post, I was wondering why you were so hung up on the dates. So, I re-read your original post. A creditor does not have to be a creditor at the time you file BK. Bankruptcy Code Section 101(10) defines the term "creditor":

(10) The term “creditor” means—
(A) entity that has a claim against the debtor that arose at the time of or before the order for relief concerning the debtor;
(B) entity that has a claim against the estate of a kind specified in section 348 (d), 502 (f), 502 (g), 502 (h) or 502 (i) of this title; or
(C) entity that has a community claim.

It's not uncommon for a debt to be sold shortly before or after the debtor's BK. There are posts here all the time about the buyers of a debts filing claims even though they weren't the debtor listed on the petition. I've never seen it suggested that those claims aren't valid.

[despritfreya]

To OP,

While I believe LadyInTheRed has addressed your misunderstandings, I need to point out the following:

Your cite to the 9th Circuit case is misguided. That case (to which I am all too familiar) deals with a Trustee's ability to avoid a lien under 549, nothing more, nothing less. The loan in McConville and Deed of Trust were taken out while the case was a Chapter 11 and without Court approval. When the case was converted, and since after acquired property is property of the converted case, the Chapter 7 Trustee sought to avoid the RECORDING of the lien under Section 549. The Court determined that the RECORDING was a violation of 362 and that the Chapter 11 Debtor violated its fiduciary duty under 364 by its failure to obtain Court approval for the secured loan.

The facts in McConville are a darn site different from transferring to a new owner a properly perfected Note and Deed of Trust. The McConville case cites to the well respected and much used In re Schwartz case, which states that acts done in violation of 362 are "void" not just "voidable". Specifically, the CREATION of the lien (not transfer) did not transfer a property interest for the purpose of Section 549(a) (post petition transaction). As a result, the lender's attempt to perfect its security interest post petition was void and the Chapter 7 Trustee was free to sell the property. However, since a bk ct must do "equity" the lender was entitled to payment of the funds loaned once the property was sold.

With all due respect to the OP, my guess is that the OP does not understand the interplay between a Chapter 11, obtaining credit post petition under Section 364, converting a Chapter 11 to a Chapter 7 and the rights of a Chapter 7 Trustee under 549. This would explain why the OP thinks the McConville case is relevant.

[IMiller]

�549(c) states that a transfer of an interest in real property to a good faith purchaser A without knowledge of the commencement of the case and for present fair equivalent value cannot be avoided under 11 U.S.C.

I think this is key wording. Did "creditor" get the assignment/transfer of an interest w/out knowledge prior to commencement?

Also, doesn't date of petition grant an order for relief?

[justbroke]

I don't know why this thread was resurrected, but there is absolutely NO violation of the automatic stay to transfer a lien. The issue is with "perfection" and the sale of a negotiable instrument is not "perfection" for purposes of 11 USC 362. Desprit did a very thorough analysis of the cases cited, and as a practitioner, has tried to educate.