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.
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Some of these lenders and their Attys are downright dense on the subject of fc and Bk.  Of course the two are inseperable, but one would never know it by watching some of these ya-hoo's practice law.

Seeking brainstorming ideas on the situation listed below; thanks for any input.

Here is the situation:  Debtor filed Ch 7, no asset case.  The specific lender made some waives at the 341 mtg of creditors which resulted in Trustee doing further asset research.  This only served to slow down the case to a discharge, as the Trustee eventually determined there was no equity and it would remain a no asset case.  The Lender in question did not seek relief from the auto stay of Bk during the case.  The Trustee did not abandon any of the assets during the case.  The debtor was eventually discharged from Ch 7.  Nearly the day after discharge the lender in question filed foreclosure.  The problem was that the auto stay was still in effect since the case had not been closed. 

Debtor filed for Motion to Dismiss.  Atty realizing that they screwed up, filed a Motion to Dismiss under Trial Rule 41(a)(1), and the motion was granted without prejudice, and fc case dismissed. 

Surely they will refile the foreclosure.  What defense would any recommend in when the case is refiled?  If and when they do refile and could be driven to dismiss the case again, then they would be unable to file a 3rd fc case.  (they get two bites at the apple and one is now used/gone).   So any advice on the above situation?   Anything pop out to these astute minds regarding the violation of the auto stay and the Plaintiff's motion to dismiss the case voluntarily.  The Defendant/debtor's motion to dismiss was not ruled upon by the Judge.

Note: This is not a case of the mtg ever being sold or transferred to another creditors, and MERS has never been involved in the case.  The original docs will not be a problem for the lender to produce. 
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anon
Is this in Florida? Isn't there some exclusion for homesteaded properties ? ie if the property and I assume its a property was included in the chapter 7 then it was relinquished or if it wasn't included then the owner had to continue to pay the mortgage. But if its the first case scenario why would the creditor file for foreclusure unless they were trying for a deficiency judgement.

My thought for today is that there is no situation an attorney can't make worse.
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    Chapter 7 only makes sense AFTER a judgement is entered. Before a judgement is entered, the mortgage lein exists and the debt must be listed
on the BR forms as secured.
    After the judgement is entered, the mortgage no longer exists so the
money judgement can be listed on the BR forms as unsecured.
    If the homestead exemption is greater than the money judgement, than
the homeowner can keep his house.
    If the homestead exemption is less than the money judgement, than the
house must be sold to satisfy part of the judgement less the exemption
allowed.
    Since the size of the Homestead Exemption varies from state to state,
each situation must be analysed with regard to this fact.
    Before a judgement is entered, Ch 13 is usually the way to go, especially
if its an investment property because a "cram down" of principal is possible
if it makes economic sense for both parties. In ch 13 this is negotiable.
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anon:

"Is this in Florida?"  No, not FL and not homestead property.  It is investment property.

"I assume its a property was included in the chapter 7 then it was relinquished" Yes, incl in BK, but property isn't necessarily relinquished.

"why would the creditor file for foreclosure unless they were trying for a deficiency judgment."  creditor has to file foreclosure in order to obtain title to the property.  Just because a debtor files Ch 7 and includes the property doesn't transfer title, a foreclosure is still necessary for lender to obtain clear title, at least in judicial states.  Creditor cannot obtain a def judg against debtor after Ch 7 discharge.  Debtor owes nothing to lender, the only thing that remains is the security interest in the property for creditor, nothing more.

Mike H:

"Chapter 7 only makes sense AFTER a judgement is entered. Before a judgement is entered, the mortgage lein exists and the debt must be listed
on the BR forms as secured."

No judgment lien prior to Ch 7 Bk.  The mtg debt was listed as secured in the Ch 7 Bk, but there was no substantial amount of equity for the Trustee to have any real interest in trying to sell the property; (maybe a small amount but not worth Trustee's hassle to deal with it).   So the Trustee abandoned the property and it is still owned by the debtor and the creditor still has a security interest in the property from which to foreclose; (judicial foreclosure state, much like FL but not homestead property). 

Regardless of the Bk, the creditor is still obligated to conduct the foreclosure within state law.  They have screwed up once and they get one more chance.  Should they be so hap hazard as to do so again, then they would be barred from ever foreclosing against the mtg on the property.  Of course the mtg would still be there and if the debtor ever sold the property it would need to be paid off, but with that situation why one ever do so.  Why not just have a rental property which pays substantial rent with NO mtg pymt.  At least it would be nice if it happened this way.  Maybe far fetched that they would whiff at this thing twice, but who knows.  The debtor would like to run interference enough to help the creditor/plaintiff commit the mortal error of having to dismiss the 2nd case. 

This is probably way more complex than the avg situation here, since it is not owner occupied property and the mtg does not involve one of the large servicers, or MERS.  Anyway, if there is someone with lots of judicial foreclosure experience that this case rings a bell with, I would love to hear any thoughts you may have on the above.  
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    Bankruptcy (ch7 or 13) can be viewed as a form of "cram down" when
more is owed on the property than the property is worth. It is ideal for
the current situation.
    For example, if the judgement is for $200,000 but the property is only
worth $75,000 (putting aside the homestead exemption issue to simplify).
One files Ch 7 listing the asset value as $75,000 and the debt as unsecured
at $200,000.
    In this situation, $125,000 gets wiped out and now only the value of
the property is left for the foreclosure sale. At this point try to refinance
and pay it off, or do a chapter 13 and try to get a loan mod on the remaining
balance. This is called a " Ch 20".
    Factor in the Homestead exemption and it could be even better! Don't
give up until you have used up all your options. KEEP YOUR HOME!
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William A. Roper, Jr.
Varoom:

What is the basis for your belief that the plaintiff only gets three bites at the apple?
 
I am unfamiliar with any law or rule that precludes refiling.  By contrast, I would think that the prior erroneous filings could be a basis for some defense.  And I can certainly see where a judge might lose patience after mulitple unsuccessful and erroneous filings.
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Margaret

Mike H wrote:
    Bankruptcy (ch7 or 13) can be viewed as a form of "cram down" when
more is owed on the property than the property is worth. It is ideal for
the current situation.
    For example, if the judgement is for $200,000 but the property is only
worth $75,000 (putting aside the homestead exemption issue to simplify).
One files Ch 7 listing the asset value as $75,000 and the debt as unsecured
at $200,000.
    In this situation, $125,000 gets wiped out and now only the value of
the property is left for the foreclosure sale. At this point try to refinance
and pay it off, or do a chapter 13 and try to get a loan mod on the remaining
balance. This is called a " Ch 20".
    Factor in the Homestead exemption and it could be even better! Don't
give up until you have used up all your options. KEEP YOUR HOME!


Mike Can you provide a website that has more information on this?
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    Unfortunately, I know of no web sites that fully explain this. It is something I have learned from experience.
    I originally learned it by accident because I met a pro se who did it
without understanding what he was doing. After much research I realized
why it worked. The logic is simple! The problem is that most people file
Chapter 7 before a judgement is entered. This is easily defeated when the
opposing side files a motion to lift the stay. Before a judgement is entered
the mortgage lien exists and must be listed as a secured debt. After a
judgement is entered, the mortgage no longer exists and the judgement
can be listed as unsecured, which it is. This is especially true if the judgement is for more than the property is worth.
    Since the money judgement is unsecured, the homestead factor could
come into play. Each situation is different so legal help might be necessary
by someone who trully understands bankruptcy. Someone like Donald Trump
or the deceased John Connolly of Texas who saved his ranch using the
bankruptcy code and the Texas homestead exemption. Use your brain, be
creative! Don't give up until you have played all your cards. Most people
fold at the beginning of the game out of ignorance of the law, both state
and federal. Most lawyers are useless so finding a good one may be near
impossible unless you have lots of money to hire one. YOU MUST USE YOUR
OWN BRAIN AND DO THE RESEARCH AND APPLY LOGIC TO YOUR SITUATION!
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