Mortgage filed Motion to Lift Stay

[rick123]

Recieved Motion to Lift...after reading the docs and the detail transaction history, I noticed that on 7/03/07 they posted it as a New Loan NO CASH. The only loan docs we signed were on 8/02/2002. I really think it was when the loan was sold from a MERS to The Bank of New York and Litton (the new servicer) posted it as the New Loan. I was wondering if I could use this information to block the stay? Could I demand that they show the docs for this new loan? It appears that all the docs that are attached to the Motion are clearly for the loan we signed in 2002. Could this technicality be worth pointing out in my response to deny their Motion?

[despritfreya]

You are in a Chapter 7. The Stay lifts upon entry of the Discharge (usually 4 months after filing). Don't waste your time. If you think that the "show me the note" defense to a foreclosure has merit, you really need to address that in a State Court suit, but, don't hold your breath as such a defense usually only serves to delay a foreclosure.

Des.

[tcreegan]

Hi Rick, and welcome!

The 'new loan' is just an internal bookkeeping notation, doesn't change the contract/mortgage note you signed.

Here is a link to a law firm that covers what you can use to deny the motion for relief: http://longislandbankruptcyblog.com/...lift-the-stay/

Just to clarify... to block the stay? you meant deny/dismiss the motion for relief, right?

Curious, are you filing yourself or using an attorney?

Welcome aboard the forum, keep posting questions, lots of good folks here to help you out!

Tom in Colo

[rick123]

Thank you Tom...I went to the site you supplied and after reading I found where there are fatal flaws in the Motion....one being they did not recite in the motion papers the chain of assignment starting from the first lender....second they are requesting reimbursement of attorney fees which is in direct inconsistency between section 362 (a)(d)(2) and section 506 (b) of the bk code...and third the affidavit from the mortgage servicer did not attach the bk schedule "A" or "D" as an exhibit as they are using the property value I supplied in the schedule. Thanks again I will be using this information to fight their Motion to Lift Stay. This should buy me a little more time if I get this Motion denied. Yes...I am filing as a pro se Chapter 7. I really wanted to get this 7 behind me and then file a Chapter 13 right after the dismissal of the 7. Then file the 13 so that I might keep the house. By the way if this scenario works does the automatic stay start again? What if they are successful in the Motion then I convert into a 13 then will the Stay go back into affect? Thanks again....

[despritfreya]

Again, you are barking up the wrong tree being in a Chapter 7. Your lender can simply withdraw the motion and wait the 4 months. In fact, that would be my advice to it when dealing with the "show me the chain/note" argument.

In response to your thinking about a Chapter 20 (7 discharge then new 13) you will have the following problems (yes a new stay will go into effect and "no" if the stay is lifted in the 7 and you convert to a 13, the stay is not revived.):

1. Two party dispute if you are going to argue you get the house for free. It belongs in State Court.

2. Bad faith filing, again, due to a 2 party dispute if you are not trying to "cure and maintain" and/or have no other creditors.

3. Assuming your "show me the note" argument holds no water (again a matter for the State Court) the bk court does not have the authority to do any modification of a 1st position mortgage against property that is your principal residence - that is between you and your lender. All you will be able to do in the 13 is "cure and maintain"- cure the default through the Plan while maintaining going forward payments.

As it relates to your delay tactic in the 7, please note:

"the stay of an act against property of the estate. . . continues until such property is no longer property of the estate" . 11 USC 362(c)(1) - meaning once the trustee abandons the property the stay is lifted. The trustee will abandon since there is no value to the estate.

"the stay of any other act . . . continues until the earlier of. . . if the case is a case under chapter 7 of this title concerning an individual. . . the time a discharge is granted. . ." 11 USC 362(c)(2) - meaning, once you have your discharge, which will probably be in a similar time frame as the abandonment maybe a bit later, creditor is free to use its state court remedies.

Again, if you think you have some defense to the enforcement of the note/mortgage, it belongs in state court not in the bk court and certainly not in the context of a Chapter 7.

Des.

[rick123]

Des...thanks for you response. Right now all I am trying to do is get thru the 7 without the stay being lifted and that is why I thought I could use the arguments I posted earlier to at least delay the mortgage company from starting its foreclosure process. Then I wanted to go into the 13 to "cure and maintain" the mortgage. Financialy we will be in better shape when February comes around. In the meantime I am also trying to work out a loan modification but really don't have much hope in that I have tried this in the past. I assume that if the mortgage company gets the stay lifted they can immediatly start foreclosure? Also...if I convert to a 13 before the Motion is heard do you think the mortgage company will still try to get the stay lifted?

Thanks

[despritfreya]

Right now all I am trying to do is get thru the 7 without the stay being lifted and that is why I thought I could use the arguments I posted earlier to at least delay the mortgage company from starting its foreclosure process. Then I wanted to go into the 13 to "cure and maintain" the mortgage. Financialy we will be in better shape when February comes around.

Ok, now you are making more sense. I suppose you can use your "lack of standing" argument however, if this were in my district unless you had 1 of 2 particular judges, it would not buy you any time. Here is how I handle cases like yours.

1. Client is behind in mortgage. Client cannot catch up but client can begin submitting a regular payment to lender.

2. Client cannot file 13 right now (usually because of the debt limits but income situation that will be changing is also a good reason) and does not want the added expense of the Chapter 11.

3. Client files the 7 to get rid of all debt thus bringing client under the debt limits for a 13.

4. Here's where the defense to the Lift Stay in a 7 comes in: Client is instructed to begin regular monthly payments to lender the month after th 7 is filed (hopefully client can do this). If lender refuses payments client deposits the funds into attny trust account. The premise behind the filing of the Motion is that the lender is not "adequately protected and the property is not necessary for an effective reorganization". Other "causes" can come into play but if you can show the lender is adequately protected, you have the judge's ear. By banking mortgage payments in contemplation of filing a Chapter 13 you are not making the default any greater and are therefore adequately protecting the lender. Based upon the tendering of payments the Response to the Motion just tells it like it is. "Debtor for the following reason was unable to file a Chapter 13. Debtor, once the discharge is entered will be filing a Chapter 13 to deal with the mortgage default. The lender is adequately protected by the tendering of post 7, pre 13 payments."

5. Client, files 13 after 7 discharge to do a "cure and maintain" Plan.

Now, what happens if you can't make the payments as suggested. That depends upon the foreclosure process in your State. In mine, if a Trustee Sale had not been set when the 7 was filed, it would be highly unlikely that the foreclosure would happen before the filing of the 13 even if the stay is lifted on day one. It takes months to complete a trustee sale and the client would probably be in the 13 before the lender can say "boo". We may file a Response (see below) if the client is really nervous but for the most part we do not worry about the Motion filed in a 7 when there is no foreclosure pending. I do not know how foreclosures work in Texas but I am sure someone will chime in.

On the other hand, if we filed the 7 and a foreclosure was pending (and needed to be stopped), or th client is nervous, we would simply file a Response that again, tells it like it is. “Client filed 7 as client could not fund a 13 Plan or resume mortgage payments as required in a Chapter 13. In February client will have a new job and will be able to fund a Plan and resume payments. Client will file Chapter 13 the moment the 7 is discharged.” Will the judge buy it. . . some do, some don’t but it gets the delay the client is looking for and it puts the debtor in a good light. . . not trying to buy time using some bogus “show me the note” defense. (As you can tell I do not like such tactics. But that is just me.)

Converting to the 13 before the Judge lifts the stay works but if you cannot afford to make the mortgage payments you will lose under the 13 as you will be unable to show that the lender is adequately protected or that you can fulfill your obligations to "cure and maintain".

Des.

[rick123]

Des...you are most helpful....you definitely have outlined some very good points that I will use. Should I also outline the flaws in their Motion as well? Since I am a pro se filer how do I set up an account for my mortgage payments since they will no longer take any payments from me? Maybe with the Trustee? Also, when I prepare my response to the Motion to Lift can I basically just write it as a letter addressed to all parties or is there some kind of form that needs to be submitted to the court? Oh...by the way Texas foreclosures can take as few as 2 months.

Thanks,
Rick

[despritfreya]

Should I also outline the flaws in their Motion as well?

Yes but this is secondary to your real concerns. Set it up as

"In addition to the above, it has come to my attention that there may be flaws with the technical aspects of the Motion and Movant's ability to even file said Motion based upon the following

1.
2.
3.. . ."

This preserves the argument if you happen to have a judge that listens to it.

Since I am a pro se filer how do I set up an account for my mortgage payments since they will no longer take any payments from me?

Easiest way is to have cashier's checks issued to the lender and hold them Bring them to the Hearing on the Motion as evidence of your good faith. The Judge may even direct the lender's attorney to accept the payments and you just hand them to him/her.

Also, when I prepare my response to the Motion to Lift can I basically just write it as a letter addressed to all parties. . .

Yes, it can be in the form of a letter, filed with the Court and mailed to the attny for the lender, the Chapter 7 Trustee and the US Trustee. Make sure your case number and full name and address are clearly visible. Or, follow the form used by the lender and make it look like a more official pleading - at least as it relates to the caption:


John Doe
111 E. 1st St
Someplace, Tx

........................IN THE UNITED STATE BANKRUTPCY COURT
............................FOR THE _____ DISTRICT OF TEXAS


In re:..........................) In Proceedings Under
.................................) Chapter 7
.................................)
................................ ) Case No.
................................ )
................................) Response to Motion for Releif
_________________)

NOW COMES debtor and states as his response as follows:


You get the picture. . sorry for all the "dots". Only way I could get it to show like a pleading - sort of.

Des.

[rick123]

Des...you are awesom....I will be making my response tomorrow....the hearing is scheduled for the 15th of December....I will let you know how it comes out....really appreciate all the info you have shared with me.

[rick123]

Motion to Lift Stay

Just wanted you to know that I had the Motion to Lift Stay on December 15. After explaing to the judge that I wanted to file a 13 after the completion of my 7. He advised that I speak with an attorney to see if a plan would work under the 13, and therefore re-set the hearing for December 29. Yesterday, we had the hearing and I explained to him that I did speak with 2 attorney's and have my third one scheduled for Thursday. I again explained what we wanted to do but needed to get clarification about the income taxes in our Chapter 7. Also told him that we applied for a loan modification and had not heard back yet. The judge was very accomodating and gave until January 14 to convert into a Chapter 13.