Author: The Wolf Firm

Written By: Alan S. Wolf

You’re special. Did you know that? From the inception of the Bankruptcy Reform Act in 1978, and in all the revisions that have followed since, mortgage lenders have had an honored and exulted place in the Bankruptcy Code. This is a result of Congress’s recognition that home mortgages in general, and the secondary market in particular, are highly important to our economy. Thus, while a debtor in bankruptcy can strip down virtually all secured debt, a debtor cannot strip down a mortgage loan if the property is the principal residence of the debtor when the bankruptcy case was filed. Similarly, while a debtor can redeem property by paying the fair market value of the property despite the secured debt being greater, a debtor cannot redeem his real estate without paying off all the secured debt. And in a Chapter 13 case, the debtor can only cure by paying the amounts due under the mortgage documents and non-bankruptcy law. Those are just some of the very special protections in bankruptcy afforded to mortgage lenders but not provided to other secured creditors (unsecured creditors are treated even worse). These are valuable rights, and they are about to be lost.

Written By: Alan S. Wolf

Mortgage servicers know that it’s probably a bad day when they arrive at their office to find reporters from 60 Minutes waiting in their lobby to speak to them regarding some mortgage servicing problem. 60 Minutes, a CBS syndicated news program, has a reputation for featuring liberal causes. Its 20-minute segments on various issues reach millions of households each week, and despite exposing problems in often a very one-sided manner, its segments almost invariably have a great influence on public opinion. That influence is further enhanced by the news media, which often pick up on the 60 Minutes segments and add their own investigations and twists. In short, a 60 Minutes segment has tremendous influence, even beyond the initial broadcast.

Written By: Alan S. Wolf

The Ninth Circuit Bankruptcy Appellate Panel (BAP) in the case of In re Williams, 323 BR 691 (9th Cir. B.A.P. 2005), held in dicta (the part of a judicial opinion that is informative or explanatory, not directly addressing the specifics of the case) that a creditor could still be liable for a willful violation of the automatic stay even if it is annulled. In Williams, the debtor filed the second of what would eventually be three serial Chapter 13 petitions. Subsequent to the second filing, a nonjudicial foreclosure was conducted on behalf of a homeowners’ association resulting (as it often does) in the sale of the property to a third party purchaser.