Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
Articles |The FORUM |Law Library |Videos | Fraudsters & Co. |File Complaints |How they STEAL |Search MSFraud |Contact Us

Prior to the bank filing for foreclosure I had filed Chapter 7 and never reaffirmed the debt.  I know that bankruptcy can be raised as an affirmative defense but I am hesitant to do so since the plaintiff's focus is on the note, the note and the note.  So I am wondering...

If I do not raise the bankruptcy as an affirmative defense, could the bank still obtain a judgement at law against me?

Is the note now worthless, meaning that the mortgage will no longer follow the note?

Quote 0 0
Mike H
    Before a judgment, filing Ch 7 and getting a discharge only discharges the money debt but the
creditor can still get an "in rem" judgment against the property because a prejudgment discharge
only wipes out the "in personam" liability of the person. The lien still exists.
   After judgment, the note and mortgage "merge" into the judgment and no longer exist, so the
judgment is unsecured but with a "levy" against the property, ie the property will be sold to the
high bidder, free and clear of the preexisting lien. If it sells for less than is owed, the creditor can
apply for a "deficiency judgment" and levy against the debtors other property or garnish wages
and bank accounts.

   In my opinion, one should never file ch 7 before a judgment is entered because the mortgage
lien will survive the discharge.

   After a judgment is entered, that is the time to file Ch 7 and list the judgment as unsecured
and the property as "homesteaded". That way you can get part or all of the judgment discharged
and if the HX exemption is equal to the judgment, the property will be "abandoned" by the Trustee
and returned to you. That is what happens in Florida where the HX is unlimited.

   If the HX is not unlimited, than the Trustee will sell the property but you should get back the
HX exemption in cash. This is theoretical only. I know of no case where this has actually happened
because most bk lawyers don't press the issue because they think the judgment carries the lien
with it. if that were true, I'd be wrong, but that is not true, so I believe I am correct.

   At least in Florida, I have seen many people save their HX property using this technique. Many
judges and lawyers have a hard time accepting the fact that "merger" causes the judgment to
be "unsecured" and it can only become "secured" by the re-recording of a certified copy of it in
official records. (Fl. Stat 55.10)
Quote 0 0
Here we go again with inaccuracy, if the primary tangible obligation does not exist then the lien has nothing to remain attached too, this is a fatal admission. In short, when the tangible obligation ceases to exist then any security securing ceases to exist. Of course there will be those that argue that a security still exists under UCC 9, that security only has attached to the intangible obligation pledged by an intangible Obligee, that was alleged to be secured by the tangible note secured by a tangible security.

The short question, how does an attached intangible security interest pledged by others remain perfected to a non-existing tangible obligation.

Yep, I expect many opposing comments this subject, but read the laws!!!
Quote 0 0
If you want to remain in the home as long as U can, or continue to rent it for income file the last month before sale I think can work well.
Quote 0 0
Write a reply...