To those of you who stripped your second mtg in a 7

[TBA]

How do you think the recent ruling by the supreme court will impact us?

I assume the bank would need to come in and reopen the case, have the order vacated, and then pursue you?

Has anyone heard anything about the options the 2nd lien holders have to collect??

Personally, i am thinking about just waiting and letting the statute of limitations run out before trying to do anything with my house.

[LadyInTheRed]

According to information at the following links, the decision is not retroactive.

http://www.avvo.com/legal-answers/can-an-attorney-contest-this-legislation--2208901.html

https://www.sirote.com/blog/mortgage-banking/breaking-supreme-court-rejects-chapter-7-lien-stripping/

[despritfreya]

The first response off the AVVO link. . .

I assume you are talking about the BANK OF AMERICA, N. A. v. CAULKETT US Supreme Court case that was decided yesterday, holding that a junior mortgage was no longer dischargeable in a Chapter 7 Bankruptcy when the senior mortgage was underwater. I agree that it is a devastating ruling for many people and a big win for banks. However, this decision will have no bearing on your 2008 case, as it cannot be enforced retroactively.

And the commentary off of the Sirote link. . .
　

With this decision, the Supreme Court has answered its own critics and declared unambiguously that neither "strip downs" nor "strip offs" are permitted in Chapter 7 cases unless the claim securing the lien has been disallowed. The Court did not make this decision retroactive which would have created chaos for lenders, mortgage servicers, title insurers and lower courts trying to reconcile reinstated liens on already disposed properties. However, the Court’s ruling is a victory for lenders and creditors who will now have the right to fully pursue their claims against borrowers rather than have their liens extinguished by a judicially drawn value.

　
WHAT? Both of these posts are incorrectly telling the world that you can no longer discharge the debt in a Chapter 7. That is not the holding of Caulkett. Caulkett simply states that you cannot strip off the lien. It does not hold that the obligation is non-dischargeable as the "attorney" at AVVO asserts, or that the lenders can "pursue their claim against borrowers" as stated on the Sirote site. The monetary debt unless reaffirmed is, and has always been, subject to a discharge. The lien is what remains fully enforceable. The lenders in the 11th Circuit, since, as far as I know, that was the only Circuit to allow a lien strip in a Chapter 7* "now have the right to fully pursue their claims against property".

Geeze Louise. I wish folks would be more careful in choosing their words.

And, the change in the law for the 11th Cir. is not going to impact cases that were previously decided.

Des.

* I qualify this as I do know of a few cases outside of the 11th Cir where lien strips were done based upon the lender defaulting by not defending its position. But that is a rare duck.