Iformation on written contract

[justbroke]

I read all that stuff, and it's just so NOT this guy's situation. But that doesn't mean it wouldn't be applied to him, you're right.

I don't understnad how it's not the situation. The core matter was that AmeriQuest didn't record the lien. (Sound familiar?) So the Trustee made them an unsecured creditor, then the Trustee took over that lien position as property of the Estate. This is no different than would happen here in this case.

The only distinction is that the OPs case hasn't been filed yet. So, the OP hasn't had to deal with declaring or otherwise trying to get a homestead exemption to keep the Trustee from taking the lien position. Other than that, the "lien" issue is exactly the OPs case. And, there are probably hundreds more like this with improper lien recordation. It's usually an actual bank that does this wrong, but there are many other cases where it's a private party who failed to record or secure the lien.

What if grandpa comes up with enough money to pay off the 1st and forecloses? I'm probably more upset about the grandfather losing out than the OP.

The Grandpa can't foreclose unless the kid is actually in default. Then the kid could complain anyhow that it wasn't recorded right. Okay, so let's say the kid cooperated. The Trustee could still come back and avoid the lien, or look for an avoidance action to get the money... because the lien was never proper.

[SweetGeorgia]

OK, I am a gigantic dork and looked the thing up (but I have the marginal excuse that I do have my own litigation, plus I want to know more about this MA homestead exemption that might induce me to tolerate Boston winters)

It was barely mentioned in the opinion, but I think Sullivan wanted to sell the homestead and claim the proceeds (above the Ameriquest loan) exempt. The trustee did step in to Ameriquest's shoes, sold the property, and distributed the proceeds to all the unsecured creditors. Ameriquest lost some money, but they deserved that for not filing properly. The other unsecured creditors scored some money, as did the trustee. Even the debtor did OK in the end, having lived in the place without paying anything for 3 years (don't know what his legal bills looked like, though).

In the end, it didn't have much to do with his homestead exemption. The sale raised less than the mortgage balance. And I think I conflated this case in my mind with two others that had sketchy unrecorded transfers, apparently intended to reduce homestead equity after the fact. Sullivan at least designated the Ameriquest loan "secured" in good faith.

None of those debtors got punished for the failure of the mortgagee to record, really.

But now, I am worried about the power of the trustee to avoid a foreclosure sale. I had two of those last week!

(And I might PM you tomorrow about something unrelated, on account of your guru-ness).

[justbroke]

None of those debtors got punished for the failure of the mortgagee to record, really.

Exactly. The debtors didn't really end up in any worse shape then they were, because they were already indebted to the alleged lienholders.

But now, I am worried about the power of the trustee to avoid a foreclosure sale. I had two of those last week!

Yes they can, if the paperwork isn't good.

You'll learn more about my posts as you go. I tend to look at everything from the Trustee's point of view. I do this because I personally want to know how they think, so I know how to counter their methods and reasons for doing things. Trustee avoidance power is... quite awesome, if you look at it for it's sheer authority.

I understand the Trustee's motivation... money. Their incentive to find things to "sell" for the benefit of the creditors, but they get a good commission based on what they can.

(And I might PM you tomorrow about something unrelated, on account of your guru-ness).

My guru-ness is only an indication of my willingness to participate in many discussions and are primarily based on my own experience and research into the topics of discussion. I'm by no means good at everything. I would be happy to answer any question that I can.