Home › Forums › General › EHTrust/EHT Topics and Creative Real Estate Financing › How does bankruptcy affect options?
September 23, 2010 at 6:13 pm #6443
An acquaintance has filed for bankruptcy. Included rental in bankruptcy but not personal house.
What effect does bankruptcy have on, for example, a 3ARCK offer? Does it take the property out of the equation? Short sale?
I’m familiar with the foreclosure process, but not bankruptcy.
Thanks.September 23, 2010 at 8:03 pm #32804
Once someone files for BK, the BK Trustee has full control of the property. It may actually be advantageous to the owner with regard to Mortgage Relief processes and claims. You may want to follow this thread… http://www.creonline.com/wwwboard/messages/95071.htmlSeptember 23, 2010 at 8:26 pm #32805
Interesting. So what I understand from that thread is:
1) The bank makes a motion to lift the stay (which I believe allows them to get the property).
2) The owner challenged them, wanting them not to produce a chain of title or wet ink note, but to to prove their standing as a real party of interest.
3) The bank has not yet produced this.
4) The next hearing is in January 2011. (!?)
Would a person in BK be able to do start the 3ARCK process, or is it too late to begin that? I’m not sure what tangible action they can take on the house that they’ve included in BK.
From talking with them, their BK attorney knows little to nothing about real estate. Just knows how to file paperwork and push it through the generic process.
Their personal residence, which they’ve not included in BK is fair game, I assume.September 23, 2010 at 8:33 pm #32806
I’m looking at the county records, and I’m like because it looks like a mess. Owner -> MERS -> Virtual Bank, (the last document contradicts the prior one)… but OneWest is the one claiming their the victim. geezSeptember 24, 2010 at 2:44 am #32807
According to attorneys that I am communicating with, motions to prove standing are not uncommon or unreasonable to a reasonable judge. You can argue this and that until the cows come home, but that is only a trick that attorneys use to sidetrack the issue. Forget “show me the note” for now. Don’t let attorneys become Sideshow Bobs. Keep them focused on the real issue at hand.
Either their client can prove they are a damaged party and have a real interest in a note AND a deed or they don’t. If they say they do but can’t prove it with a legitimate recorded chain of assignments that lead directly to them, you should immediately ask the judge why you are in court with someone that cannot prove standing.
Take note that I am mentioning that this must be a motion in a legal venue with a judge. We have to hope that the judge has not been previously tainted. Even then, the homeowner is entitled to a written explanation from the judge as to what circumstances led him to the decision he made which could become the basis for an appeal or for a hearing that could question the judge’s prejudices and lack of fairness.
More and more attorneys (especially those with dollar signs for eyes) are beginning to see a new industry in foreclosure disputes. These are the new ambulance chasers I suppose, but many lawyers want a piece of the action now, knowing that institutional lenders are finally fair game. More judges are also more dubious of lender’s attorney’s assumptions. This is a good time to be a fighting homeowner, but litigation is imperative to success in my opinion.September 24, 2010 at 6:03 am #32808
looks like litigation is becoming a common denominator for mortgage expungement and title quieting actions.
c hSeptember 24, 2010 at 4:09 pm #32809
This is good information.
Would a person in BK be able to do start the 3ARCK process, or is it too late to begin that?
From talking with them, their BK attorney knows little to nothing about real estate. Just knows how to file paperwork and push it through the generic process.September 24, 2010 at 4:14 pm #32810
Thinking this through… if the banque’s standing is successfully shot down, then would it not be true that the *trustee* has control of a house without liens, which it could sell to satisfy the other debts. Or am I missing something?
If that’s true, then I don’t see any reason to pursue it further.September 25, 2010 at 1:52 pm #32811
I see a BIG reason. My house, originally worth $485K is now worth $270K. It has a 2nd which I have kept current of $70K.
The fraudulent 1st which will have to be cancelled since they have no chance of proving REAL PARTY IN INTEREST status is $370K.
That will leave me with $200K in equity. Don’t forget the home exemption of $150K. That leaves only $50K in equity and the case has already been discharged for 7 months. The trustee won’t touch a thing, there is nobody to pay off and commissions, etc. would not make it worth it.September 25, 2010 at 6:31 pm #32812
go GM , go.
c hSeptember 27, 2010 at 2:25 pm #32813
I don’t understand what that does with my question.
The rental property is under control of trustee. This is not a personal residence. The BK has just been filed, not 7 months go. It’s around $30k upside down.
My question boils down to “I’m not sure what tangible action they can take on the house that they’ve included in BK.”
Start 3ARCK yes/no? I’m getting conflicting answers.September 27, 2010 at 2:35 pm #32814
You can’t do anything without the OK of the Trustee. Take him to lunch.September 27, 2010 at 3:26 pm #32815
Simple answer. I like.
[Sorry if I came across rude at all.]
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