BK 13 Advice-Prior BK7 discharge (Lien Strip)

[1richard1]

but it at the moment it is a valid secured claim. The lien passed through the chapter 7 unaffected. You are right if the debtor files the Chapter 13 without any other debt but the 2nd mortgage it could be considered bad faith. The 13 should have been filed first. I think the OP wanted to roll the dice on getting a 5% settlement instead of 5 years of payments. BOA isn't waiting it out. They are figuring a 1st mortgage of 740K means the house could definitely recoup some of it's value in the years to come.

The 2nd mortgage was discharged through the BK 7, appears on credit reports as $0 payment/$0 balance and discharged through BK 7. However, the lien remains attached to the property per County Recorder property records.

You're correct. Prefer a 5-10% settlement vs. having initially filing a Ch. 13 with 5 years of payments plus interest on a lien with 0 collateral. However, as it stands BOA will not go for a settlement so prefer a Ch. 13 BK in a few years. Only delinquent debt would be the prior discharged 2nd mortgage, other debt is the 1st mortgage and auto that are both 100% current. I just don't see why this would be a question of bad faith, the 2nd mortgage has 0 collateral. Makes 0 sense to pay on something of 0 value/0 collateral and previously discharged through the Bk 7. My hope, 5 year BK 13 repayment plan to the court of just my 1st mortgage and auto loan. Pay for the appraisal, attorney files the motion to lien strip the 2nd mortgage. No payments to the 2nd mortgage loan. Let me ask you this, with a DMI of $4,000 plus would the court force me to make monthly installments utilizing all my DMI? Meaning, say my mortgage and auto total was $3,500 yet with the BK 13 plan could the court force me to pay the court $7,500 each month ($3,500 1st mortgage & auto loan plus $4,000 DMI)???

[justbroke]

but it at the moment it is a valid secured claim. The lien passed through the chapter 7 unaffected.

Being the hypertechnical person that I am... it' would not be an "allowed" secured claim. Bifurcation is what splits this into a secured and unsecured component.

I think we are all saying the same thing, though. This would be a difficult Chapter 20 especially given the caselaw in California. If they were in the 8th Circuit, it may be a little easier.

The best thing may be for the poster, 1richard1, to find an attorney that specializes in these types of negotiations. I know that we have many in Florida that not only deal with foreclosure defense, but they also deal with principal reductions and settlements. You just need to get to the "right" people at Bank of America!

[1richard1]

Our BK attorney just sent me a couple emails and advised as follows:

First, if we filed a BK 13 in our Central District Court of CA even after waiting 4 years after the filing of our BK 7 our entire DMI would go towards the repayment plan. He relayed that even though the BOA heloc was previously discharged through a Ch. 7 BK, we'd be forced to pay them. Large portion of our DMI would go towards a 5 year Ch. 13 repayment plan, attorney said much more then even our initial monthly payments to BOA.

Next, over the prior few months BOA sold the heloc first to Bank of New York Trust Company. Interesting, BOA sold the loan/lien to them just 3 months after we notified BOA of our BK filing. Yet then just last month, Dec. 2011 New York Trust Company sold the loan/lien to Green Tree Servicing LLC-Asset Receivables Management located in Tempe, AZ.

Questions:
Anyone familiar with Green Tree Servicing? Why would they purchase, acquire a heloc that was already discharged in Ch. 7 BK? The letter we received from them has a lengthy paragraph about it not being an attempt to collect a debt, and on and on because of the bankruptcy. It says we are not obligated to make payments and any amounts we do pay Green Tree is at our discretion.

Any idea of what percent on the dollar they purchased the loan for, or what to have my attorney offer Green Tree LLC- Asset Receivable Management in form of a settlement? Lastly, I had a friend whom is a title officer at a title and escrow company just last week pull a "chain of title" regarding recorded documents in regards to our property. The lien with BOA still stands, yet I'd think they'd reconvey/transfer the loan to Bank of New York Trust, then from them to Green Tree. Seems confusing to do a settlement with Green Tree, yet need them to then have Green Tree go back to BOA to reconvey-release the lien from our property.

[justbroke]

First, if we filed a BK 13 in our Central District Court of CA even after waiting 4 years after the filing of our BK 7 our entire DMI would go towards the repayment plan. He relayed that even though the BOA heloc was previously discharged through a Ch. 7 BK, we'd be forced to pay them. Large portion of our DMI would go towards a 5 year Ch. 13 repayment plan, attorney said much more then even our initial monthly payments to BOA.

Yes, that's due to some of the rulings in California including In re Hill, 440 B.R. 176 (Bankr. S.D. Cal. 2010).

Next, over the prior few months BOA sold the heloc first to Bank of New York Trust Company. Interesting, BOA sold the loan/lien to them just 3 months after we notified BOA of our BK filing. Yet then just last month, Dec. 2011 New York Trust Company sold the loan/lien to Green Tree Servicing LLC-Asset Receivables Management located in Tempe, AZ.

Sounds like they sold the debt to ARM which is a junk debt buyer.

Anyone familiar with Green Tree Servicing? Why would they purchase, acquire a heloc that was already discharged in Ch. 7 BK? Any idea of what percent on the dollar they purchased the loan for, or what to have my attorney offer in form of a settlement?

The assignment chain is not really an issue except where a part moves to foreclosure on the property or asserts that they are the "owner" and "holder" of the promissory note. Doing a title search based solely on public record is futile these days -- due to the entire MERS-style recordation strategy.

In any event, there are many junk debt buyers that would buy that debt! If your property starts to appreciate and the HELOC begins to get "enough" value, then the buyer (and now holder of the Note) now has some leverage! They can foreclose! I might buy a $100K underwater Note for $100 myself! Just sit on it for 10 years and hope that you might be able to foreclosure on the property, or at least get a $3K payoff in a short sale!

This is classic investing. Junk Debt Buyers know what to buy and when to buy it. They know what is truly junk and what's the diamond in the rough. Sure, they may loss on 99 out of 100 properties that they buy for that small amount, but the one that does pay... pays for the other 99 that they lost money on.

[LadyInTheRed]

Try settling with Green Tree. You'll have to find the right person or department to talk to. I think I'd start by offering 5% in hopes of reaching an agreement at 10%. See post number 31 in the following thread: http://www.bkforum.com/showthread.ph...ght=green+tree. Like that poster, refuse to give your financial information because you have no personal liability to pay the debt.

[LadyInTheRed]

I was just doing some more reading about Green Tree. They are known for attempting to collect debt discharged in bankruptcy. If they start trying to collect from you, keep all correspondence and log their phone calls. You may end up with a claim against them for violating the permanent injunction from attempting to collect a discharged debt.

[1richard1]

I was just doing some more reading about Green Tree. They are known for attempting to collect debt discharged in bankruptcy. If they start trying to collect from you, keep all correspondence and log their phone calls. You may end up with a claim against them for violating the permanent injunction from attempting to collect a discharged debt.

Ok. Will keep all correspondence mailed from them. Thus far, they've never called and only sent 1 letter. It says, The Bank of New York Mellon FKA The Bank of New York, as successor to JP Morgan Chase Bank, N.A., as Trustree for the Certificateholders of CWHEQ revolving home equity loan trust, series 2006-H Account.: ..........

The account number listed is what was assigned to us by BOA back in 2006, yet confused how JP Morgan Chase Bank comes into play unless they were part of the Bank of New York.

[justbroke]

That's the whole problem with all those mortgage notes. They were sold, then the bank that owned them collapsed and was purchased and then resold! It's a mess really, but if someone has the actual original Promissory Note (with wet signatures) and an indorsement in blank... they are golden!

[spidge]

I would still use an attorney to better insure it gets done correctly. I have worked up settlements just to have the collectors send me bills for the uncollected amounts, but because I had all the correspondences they backed off quite quickly. They did not even make claims on my 13.

Now this is turning into a collection topic. If they cannot produce the note then are they actually in a legal position to settle on BofA's behalf? Make them produce the proof. If the note cannot be produced then what would the next steps be? Again, pay a reputable attorney.

Now it sounds like you might have that chance, aye.