Objection to Claim Denied-Withdrawn - what does this mean?

[cspa522]

Months ago, after our C13 plan was confirmed, our atty filed a Debtors Objection to Claim of HSBC Mortgage Services, Inc. We are trying to strip our 2nd mortgage (held by HSBC). HSBC filed a claim, saying we needed to pay them, we filed the Objection to that claim.

Today I checked PACER and discovered it has been stamped with "Denied - Withdrawn" and signed by the judge. What does this mean? Are WE denied, or is HSBC? I've emailed my attorney for clarification, but you guys are often a lot faster at getting me an answer.

Thanks!

--Cspa

[lrprn]

Your second mortgage can't be legally stripped until your Ch 13 is successfully completed and discharged, and then your lawyer files a motion with the court to have the second mortgage stripped. See the sticky on stripping a second mortgage here in the Ch 13 forum to learn everything you ever wanted to know about how this process works.

Has a reliable appraiser already verified to the court that your home is currently worth less than what's left to pay on your first mortgage? If this is the case, then typically it's ok to stop paying the second mortgage because the second lender won't foreclose, If they do, the first lender will get everything from the sale of your home. The vast majority of second mortgage lenders are smart enough to not pay good money of their own to end up getting nothing for themselves

Can you share more about what your lawyer wanted to accomplish with the filed motion of objection?

[justbroke]

When you say "it was stamped" are you referring to the claim or the objection?

[cspa522]

I should probably clarify that I think I'm describing this all wrong. I did hear back from our attorney and she assures me everything is fine and the strip should go through as scheduled.

We have had our home appraised (back in November, a week before we filed). It appraised for about $7,000 less than what we currently owe on the 1st. Our plan was confirmed a few weeks later, and then HSBC (owner of the 2nd mortgage) filed an objection. We filed an objection to their objection, so to speak. On PACER I now have two BK cases, one for the HSBC claim and one for my normal Chapter 13.

We haven't paid on our 2nd mortgage in about a year. When we prepared to file our attorney advised us it was okay to stop paying on it.

[justbroke]

You really only have one BK case. The other case is just an "adversary proceeding" and is technically "within" the BK case. Think of it -- the other case -- as a sub-case. Did someone file a complaint (adversary proceeding)? If so, who filed as plaintiff... HSBC?

[cspa522]

Yes, justbroke. I believe that's what it is. HSBC is saying we shouldn't be able to claim what we owe them as unsecured debt.

[justbroke]

Yes, justbroke. I believe that's what it is. HSBC is saying we shouldn't be able to claim what we owe them as unsecured debt.

Cool! You'll have to keep us up to date. Those complaints (APs) can go rather slowly (months to prosecute). I'm sure they are complaining about the valuation and that your evidence was not enough to justify the lien strip. However, if they did this (complaint) after confirmation, then they may be out of luck (depending on your jurisdiction).

I think HSBC is dumb! They should have filed an objection to confirmation... before confirmation! This is why they were denied! (Sometimes creditor attorneys are silly.) They have now filed a complaint, but I don't know how far that will go. However, it seems that you went for the motion to strip the lien after confirmation and that you attacked HSBC's claim "late" after confirmation. HSBC may be saying that you should have objected sooner. I don't know, but it should still be interesting.

[cspa522]

I'll keep you up to date. At the moment my attorney is thinking the judge is just going to issue a Default Order, which is an Order taken without the other party there (because HSBC hasn't responded to the claim/objection we filed against them). She also thinks "it's also a matter of whether the Court thinks we have served the correct people." Per my atty: "This is the tricky part of these cases since the mortgage companies have all been bought out and no one wants to come forward to say they are representing them."

If a Default Order isn't issued, my atty has to go to court on July 6th.