CA Court Site Info on Foreclosure

Wednesday, February 17, 2016

Research Data 2016 Online CA Mortgages, Foreclosure Litigation

Research Data Jan 2016 seen on CEB online

We do not guarantee accuracy or updating but CEB is usually pretty good..........

January 2016 Update
Legislation. California revised its existing statutory remedies for fraudulent conveyances and renamed the law as the Uniform Voidable Transactions Act (UVTA) (CC §§3439–3439.14). The revisions, among other changes, clarify the statute of limitations applicable to fraudulent transfer claims. See §§1.12, 7.111, 11.86.
California law in CC §2943.1 has temporarily standardized the process enabling consumer borrowers to request that their lenders suspend and close Home Equity Lines of Credit (HELOCs). See §13.6A.

The 2008 amendment to the Servicemembers Civil Relief Act (50 USC App §§501–597b), which amended 50 USC App §533(c) to change the period during which foreclosure may not occur on a servicemember’s property from 90 days to 9 months after the debtor’s military service ends, first expired in 2011, but a 2012 amendment changed that period from 9 months to 1 year; then a later amendment extended that change to December 31, 2015. Effective January 1, 2016, the period under §533 reverted to 90 days after the debtor’s military service ends. See Pub L 112–154, §710(d)(3), 126 Stat 1208. See §§2.30, 3.63A, 3.64, 7.27.

The now-expired Mortgage Forgiveness Debt Relief Act of 2007 (Pub L 110–142, 121 Stat 1803) and extending amendments allowed a borrower to exclude from gross income the discharge of indebtedness on its principal residence up to the amount of $2 million for married taxpayers filing jointly ($1 million for those filing separately) if the discharge occurred between January 1, 2007, and January 1, 2015. IRC §108(a)(1)(E), (h). But new bills were introduced to extend it further through 2015 and beyond. See §§2.111, 7.21G.

Federal Regulations. In 2015, the Consumer Financial Protection Bureau (CFPB) continued to issue or amend regulations required under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Amended discussions of the Act, of cases interpreting the Act or its implementing regulations, and of newly adopted or amended federal regulations relevant to residential mortgage lending were added throughout chap 13, for example:
The new integrated disclosure requirements for lenders or creditors making consumer mortgage loans, effective October 3, 2015, required under both the Truth in Lending Act (15 USC §§1601–1667f) and the Real Estate Settlement Procedures Act of 1974 (12 USC §§2601–2617). See §§13.25B–13.25G.

The effective dates of both Dodd-Frank and its implementing regulations, as amended or interpreted by government agencies and case law. See also §13.35.
The CFPB’s extension of the current 2-year transition period, which allows certain small creditors to make balloon-payment high-cost mortgages, whether or not they operate predominantly in rural or underserved areas; the transition period will include covered transactions for which the loan application was received before April 1, 2016, rather than those consummated on or before January 10, 2016. See 80 Fed Reg 59944, 59968 (Oct. 2, 2015). See §§13.22, 13.45.
The April 2015, CFPB’s amended interpretive rule 12 CFR §1024.20(a)(1) regarding homeownership counseling requirements for high-cost mortgages and 12 CFR §1026.34(a)(5) anti-steering requirements. See §§13.22, 13.25A.
The publication by a consortium of federal agencies in 2015 of regulations to implement the minimum requirements in Section 1473 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) to be applied by participating states in the registration and supervision of appraisal management companies (AMCs). See §13.59A.
The effective date of the arbitration prohibition in Dodd-Frank, concerning consumer loans and equity lines of credit secured by the consumer’s principal dwelling, is unclear because it was determined to be July 21, 2010, in Weller v HSBC Mortgage Servs. (D Col 2013) 971 F Supp 2d 1072, 1077, but another date is stated in the implementing regulation. See §13.60.

Although it is believed that July 21, 2013, is the effective date for statutory provisions of Title XIV of the Dodd-Frank Act for which there were no regulations required to be prescribed (see Dodd-Frank §1400(c)), a district court case, Rubenstein v Department Stores Nat'l Bank (SD NY 2013) 955 F Supp 2d 260, 266, found Dodd-Frank provisions governing effective dates to be ambiguous and held that the January 21, 2013, date applies to Title XIV amendments for which implementing regulations are not required. See §§13.25A, 13,35, 13.80.
Supreme Court Decisions and Pending Cases. The United States Supreme Court in Jesinoski v Countrywide Home Loans (2015) ___ US ___, 135 S Ct 790, decided that the federal Truth in Lending Act merely requires the borrower to notify the creditor, in accordance with federal regulations, of the borrower’s intention to rescind within 3 years of the loan’s closing; the borrower need not also sue for enforcement of the rescission within the 3-year period. See §§13.68, 13.76.

A crucial question for decades was whether actions or policies that have a disparate impact on protected classes of borrowers—even if they are not based on an intent to discriminate—are illegal under federal housing law. The Supreme Court resolved this in Texas Dep’t of Hous. & Community Affairs v Inclusive Communities Project (2015) ___ US ___, 135 S Ct 2507, 2015 US Lexis 4249, holding that a plaintiff may establish liability without proof of intentional discrimination as long as a specifically identified business practice has a disproportionate effect on certain protected groups and the practice is not grounded in justifiable business interests. See §13.29.

Lien-stripping is not allowed at all in a Chapter 7 case under the Supreme Court’s recent decision in Bank of America v Caulkett (2015) ___ US ___, 135 S Ct 1995 (not allowed on junior wholly unsecured lien). See §§7.88, 7.88C, 11.92, 11.126.
A bankruptcy court is prohibited from confirming a Chapter 11 cram-down plan that provides for the sale of collateral free and clear of the lender’s lien but does not permit the lender to credit bid at the sale. RadLAX Gateway Hotel v Amalgamated Bank (2012) ___ US ___, 132 S Ct 2065 (noting that ability to credit bid (1) helps to protect creditor against risk that its collateral will be sold at depressed price, and (2) enables creditor to purchase collateral for what it considers fair market price, up to the amount of its security interest, without committing additional cash to protect loan). See §§11.76, 11.111–11.112.

The California Supreme Court decided Sanchez v Valencia Holding Co. (2015) 61 C4th 899 (class action case; although it limits ability of states to regulate fairness of arbitration agreements, federal arbitration law does not preempt generally applicable contract defenses, such as fraud, duress, or unconscionability; these defenses may be used to invalidate arbitration agreement if they are enforced evenhandedly and do not interfere with fundamental attributes of arbitration). See §12.56.

The California Supreme Court is reviewing First California Bank v McDonald (2014) 2014 Cal App Lexis 1065 (deficiency barred because exhaustion of all real property collateral must be done in single judicial foreclosure action, but lender had collected net proceeds from voluntary sale of other collateral before filing for judicial foreclosure), cited in §§4.25–4.26, 4.30.

The California Supreme Court is reviewing Yvanova v New Century Mortgage Corp. (review granted Aug. 27, 2014, S218973; superseded opinion at 226 CA4th 495) (held that borrower lacked standing to challenge alleged improper securitization and assignment of residential loan). The Supreme Court also (1) accepted for review Boyce v T.D. Serv. Co. (review granted July 15, 2015, S226267; superseded opinion at 235 CA4th 429), Keshtgar v U.S. Bank (review granted Oct. 1, 2014, S220012; superseded opinion at 226 CA4th 1201), and Mendoza v JPMorgan Chase Bank (review granted Nov. 12, 2014, S220675; superseded opinion at 228 CA4th 1020), and (2) ordered that further action in those cases be deferred pending consideration and disposition of the issue in Yvanova. Note that the Second Circuit in Rajamin v Deutsche Bank (2d Cir 2014) 757 F3d 79, 90, held that a borrower lacks standing under New York trust law to challenge foreclosure by asserting that parties to the assignment agreements failed to comply with the agreements, but California law currently requires a lender or its assignee to have proper authority to foreclose. See §§1.25B, 2.34, 2.25, 2.50A, 7.15, 7.38, 11.89, 12.92, 13.61, 13.96.

The California Supreme Court is still reviewing Coker v JP Morgan Chase Bank (review granted Nov. 20, 2013, S213137; superseded opinion at 218 CA4th 1) (held that CCP §580b’s antideficiency protection applies to all modes of sale, including short sales affecting purchase money loans, despite the nonretroactivity of CCP §580e). See §§5.25, 5.36, 7.21C.

One-Action and Antideficiency Laws. A foreclosing creditor that has not included all of the security in a single foreclosure action may obtain a deficiency judgment after the sale of the included security, but the sanction aspect of CCP §726 will act to release the unincluded security from the lien of the deed of trust. See First Cal. Bank v McDonald (2014) 2014 Cal App Lexis 1065 (deficiency barred because exhaustion of all real property collateral must be done in single judicial foreclosure action, but lender had collected net proceeds from voluntary sale of other collateral before filing for judicial foreclosure), cited in §§4.6, 4.25–4.26, 4.30.

In Alborzian v JPMorgan Chase Bank (2015) 235 CA4th 29, the court held that a borrower could sue a junior lienholder’s debt collector for violating state and federal debt collection laws in trying to collect a debt that was no longer enforceable and inaccurately implying that the debt was enforceable after foreclosure. See §§2.38A, 5.10, 5.24, 5.39, 12.27, 13.2, 13.108, 13.110.
Nonjudicial Foreclosures. Recent cases allowing the borrower to get an order enjoining a trustee sale include Peterson v Wells Fargo Bank (2015) 236 CA4th 844 (beneficiary had no valid lien against property because trustor had only life estate interest). See §§1.39, 1.51, 7.28–7.29, 7.35, 7.39.
Civil Code §2923.6 prohibits a lender’s “dual tracking.” In other words, a lender cannot pursue foreclosure while negotiating a loan modification with the borrower. For full discussion of CC §2923.6, including new cases applying the statute, see §§2.49C, 10.8.

Civil Code §2924.12(a)(1) allows the borrower to file an action for injunctive relief to enjoin foreclosure until the lender rectifies a material violation of the HBOR only when the trustee’s deed has not yet been recorded. If no injunction is requested, the foreclosing party might continue with the sale and record the deed after the complaint is filed, precluding such relief. See, e.g., Rockridge Trust v Wells Fargo Bank (ND Cal 2013) 985 F Supp 2d 1110, 1149 (restricted borrowers’ relief for HBOR violations to damages, because trustee’s deed was recorded after borrower’s initial complaint was filed). See §7.38.

A California court interpreted the language in CC §2924.12(a)(1) to mean that a borrower who has obtained such an injunction is the prevailing party and is thus entitled to fees. Monterossa v Superior Court (2015) 237 CA4th 747. See §§2.49E, 7.38, 7.55.
In Lyons v Santa Barbara County Sheriff's Office (2014) 231 CA4th 1499, the court of appeal rejected a taxpayer action by the trustor as an improper collateral attack on an unlawful detainer judgment and a completed trustee sale. See §2.100.

Judicial Foreclosures. For a decision discussing the “maintenance, upkeep, and repair” element for calculating the postsale redemption price under CCP §729.060(b)(2) and the “offset” provisions of CCP §729.060(c), see Wells Fargo Bank v 6354 Figarden Gen. Partnership (2015) 238 CA4th 370. The court in Figarden held that the offset required by §729.060(c) can be determined by adding the amount of rents paid for the improved portion of the property that has tenants and the value, if any, of the use and occupation of the unimproved portion. See §§3.93, 3.99.

Miscellaneous Developments. For a Ninth Circuit case analyzing the factors relevant to determining whether to apply choice-of-law provision in loan documents, see First Intercontinental Bank v Ahn (9th Cir 2015) 798 F3d 1149 (refusing to apply Georgia choice-of-law provision in note and instead applying California law to released obligor’s request for attorney fees after she prevailed in action by bank to collect note). See §1.57A.
In Moorefield Constr., Inc. v Intervest-Mortgage Inv. Co. (2014) 230 CA4th 146, a general contractor cited the seller-protective subordination cases to argue that the contractor’s subordination of its mechanics lien to the construction lender’s deed of trust was conditioned on full payment to the contractor and thus could not be enforced absent the payment. The court found that there was no such explicit condition and enforced the subordination. See §9.81.

Loan Guaranties. In CADC/RAD Venture 2011-1 LLC v Bradley (2015) 235 CA4th 775, the court of appeal found that a guaranty is an unenforceable sham when the guarantor is the principal obligor on the debt. This occurs when either “(1) the guarantor personally executes the underlying loan agreements or a deed of trust, or (2) the guarantor is, in reality, the principal obligor under a different name by operation of trust or corporate law or some other applicable legal principle.” CADC/RAD, supra. See §§4.29, 9.145, 9.147.

In Legendary Investors Group No. 1, LLC v Niemann (2014) 224 CA4th 1407, a guarantor argued that when the beneficiary drew the proceeds of a letter of credit and certified that the draw covered the unpaid indebtedness, the debt was extinguished, thus releasing the guaranty. The court rejected this argument and concluded that a waiver in the guaranty preserved the guarantor’s liability even if the draw under the letter of credit released the borrower. See §§9.120, 9.161.
In California Bank & Trust v DelPonti (2014) 232 CA4th 162, the court applied a rule of strict construction to contractual predefault waivers, holding that a guarantor’s waiver of defenses is limited to legal and statutory defenses expressly set out in the agreement. A waiver of such defenses, which is permitted by CC §2856, is not deemed to waive all defenses, especially equitable defenses such as unclean hands, when doing so would result in the lender’s unjust enrichment and would allow the lender to profit from its own fraudulent conduct. See §§9.122, 9.142.

Loan Assignment; Authority to Foreclose. Many cases decided in California courts declined to follow Glaski v Bank of America (2013) 218 CA4th 1079 (held borrower has standing to challenge lender’s void assignment of loan occurring after trust’s closing date even if borrower is not party to (or third party beneficiary of) assignment agreement). See, e.g., Kan v Guild Mortgage Co. (Sept. 25, 2014, B254007) 2014 Cal App Lexis 925 (ruled that borrower lacked standing to challenge purported contractual violations in loan securitization process; also holding that even if transfers were invalid, borrower would not have been injured); Mendoza v JPMorgan Chase Bank (2014) 228 CA4th 1020 (noted critical distinction between glitch in attempted securitization and attempt to pass title by entity without interest to convey). See §§7.15, 7.38, 7.67B.

Loan Modification and Loss Mitigation. The Attorney General has authority to bring a civil action against parties who take money from customers and falsely promise that they will obtain loan modifications from lenders and prevent foreclosure of the customers’ homes. Remedies include injunctive relief, restitution, receivership, and civil penalties under Bus & P C §§17200–17210 and other consumer protection statutes. See People v Sarpas (2014) 225 CA4th 1539, cited in §10.1A.

To prevent abuse, the Homeowner Bill of Rights (HBOR) does not require a loan servicer to evaluate a later-submitted application for a loan modification from a borrower who submitted multiple applications, unless the borrower experienced a material change in financial circumstances. Accordingly, a later application will trigger dual-tracking protections (i.e., suspending foreclosure while application is pending) only if the borrower documented and submitted the change in circumstances to the servicer. See Gilmore v Wells Fargo Bank (ND Cal 2014) 75 F Supp 3d 1255. See §§2.49D, 10.8.
Some federal district courts strictly construed the HBOR and held that it does not condition the appointment of a single point of contact only on a borrower’s specific request for the contact; instead, the HBOR requires the appointment also when the borrower requests a foreclosure prevention alternative, such as a loan modification. See Penermon v Wells Fargo Bank (ND Cal 2014) 47 F Supp 3d 982 and other authorities cited in §10.8F.
For a case arising from lender misconduct during loan modification negotiations, which allowed a cause of action on the basis that the lender breached its promise to consider the borrower for a modification (and to do so in good faith) after the borrower complied with a trial loan modification, see Corvello v Wells Fargo Bank (9th Cir 2013) 728 F3d 878 and recent district court and California cases following it in §§7.67A–7.67B, 10.20, 12.22, 12.79, 12.81–12.82, 13.99.

A California court of appeal upheld at the pleading stage causes of action arising from the lender’s mishandling of a loan modification application. See, e.g., Fleet v Bank of America (2014) 229 CA4th 1403 (borrowers stated claims for promissory estoppel and breach of the covenant of good faith and fair dealing; because lenders took federal money, they had to follow federal Treasury Department guidelines for restructuring loans and did not have discretion to set their own criteria for giving loan modifications). See §§13.95, 13.99.

Additional Lender and Broker Liability Cases. Under a recent California decision, tender of the mortgage debt owing is not required to state a claim seeking damages or to set aside a trustee sale, because of the foreclosing lender’s violation of the “dual tracking” prohibition found in the Homeowner Bill of Rights (HBOR). Valbuena v Ocwen Loan Servicing (2015) 237 CA4th 1267, 1273 (nothing in HBOR suggests that borrower must tender loan balance before filing suit for lender’s violation). But see Ram v OneWest Bank (2015) 234 CA4th 1, 17 (not HBOR case; holding foreclosure sale was at worst voidable, not void, and therefore tender was required, when entity recorded notice of default “as trustee” before it was named as trustee, but was effectively substituted as trustee before recordation of notice of sale and subsequent deed). See §§2.25, 2.49E, 7.24A, 7.38, 7.41, 7.67B, 10.8.
If a property owner contends that the mortgage lien is invalid because of, for example, fraud, mistake, forgery, or lack of capacity, then the owner may sue to request that the loan be rescinded, that the deed of trust be canceled, and that title to the property be quieted free of the lien. See, e.g., Salazar v Thomas (2015) 236 CA4th 467 (quiet title action based on forged deed of trust; court of appeal held that statute of limitations was not triggered by owner’s receipt of lender’s notice of default, because mere notice of default does not dispute or disturb owner’s possession). See §§7.35, 12.27.

For an unusual action for damages for wrongful foreclosure on the basis of promissory estoppel, see Jones v Wachovia Bank (2014) 230 CA4th 935, 948 (promissory estoppel claim must be supported by showing of detrimental reliance; borrowers failed to show detrimental reliance when they took no action to cure their default and instead “simply hoped” that bank would agree to further foreclosure sale postponements and that loan modification “might eventually become available”). See §§2.88, 7.70, 7.80, 12.4.
Another recent decision approved damages for wrongful foreclosure even though the plaintiff had no equity in the property. See Miles v Deutsche Bank (2015) 236 CA4th 394 (allowing “underwater” plaintiff to pursue all damages proximately caused by wrongful foreclosure under CC §3333, including moving expenses, lost rental income, damage to credit, and emotional distress). See §§7.70, 12.95.
A promissory estoppel claim based on an alleged oral agreement to forbear from foreclosing might be barred by the Statute of Frauds.  See, e.g., Granadino v Wells Fargo Bank (2015) 236 CA4th 411 (Statute of Frauds barred claim for promissory estoppel regarding foreclosure forbearance when it was undisputed that there was no writing). See §§12.4, 12.43, 12.95.
Recent federal district court decisions have noted the apparent split in California state courts, with some decisions holding that a residential lender can owe a common law duty of care to offer, consider, and approve a loan modification, and other decisions holding the opposite. See, e.g., Patera v CitiBank (ND Cal 2015) 79 F Supp 3d 1074 and other cases cited in §§12.11D, 12.79, 13.94.
The failure to give the required response or notice under either 15 USC §1641(f)(2) or 15 USC §1641(g), which govern notices of mortgage transfers by the lender, is actionable and the borrower may obtain actual and statutory damages, costs, and attorney fees. Diunugala v JP Morgan Chase Bank (SD Cal 2015) 81 F Supp 3d 969. See §13.16.

High annual interest rates or “default” interest rates that escalate the rate in the event of default (monetary or nonmonetary) are prohibited in high-fee/high-cost loans. See, e.g., Saint-Jean v Emigrant Mortgage Co. (ED NY 2014) 50 F Supp 3d 300, 320 (borrowers’ credible pleading of lender’s nondisclosure of fully anticipated application of default interest rate may violate Truth in Lending Act and may give borrowers right to invoke 3-year rescission remedy). See §§13.62, 13.68, 13.71–13.72.

Depending on the parties involved (borrowers, brokers, lenders, secondary market purchasers for value), an attorney analyzing a possible predatory lending problem should be prepared to consider numerous theories of liability. See, e.g., Petersen v Bank of America (2014) 232 CA4th 238 (California’s permissive joinder statute allows joinder of numerous predatory lending cases with similar factual underpinnings when lender and predatory practices are common to same series of transactions). See §13.65.
Borrower Bankruptcy. Although there is a split of authority regarding the applicability of the absolute-priority rule, which in essence requires that a cram-down plan provide that creditors be paid in full before the debtor can retain an interest in property of the estate, the majority view (adopted by at least four circuit-level courts) is that the rule applies to both business entity and individual Chapter 11 debtors under 11 USC §1129. See §§7.87, 7.119, 11.109, 11.113.
A bankruptcy appellate panel decision in California adopted the rule that lien-stripping is permissible in Chapter 20 cases, because nothing in the Bankruptcy Code prevents it (even without a discharge) if the debtor’s plan otherwise complies with requirements of the Bankruptcy Code. See Boukatch v MidFirst Bank (In re Boukatch) (BAP 9th Cir 2015) 533 BR 292 (noting that this approach first determines status of claim under 11 USC §506(a)). See §§7.87, 11.25, 11.126.

The nonjudicial foreclosure by a homeowners association on its lien for delinquent assessments is subject to statutory redemption, like the one authorized for judicial foreclosure that allows the former owner to redeem the property, but within a shorter period after the foreclosure sale. See CC §5715(b); CCP §729.035; In re Richter (Bankr CD Cal 2015) 525 BR 735, 751 (although noting that redemption period can be extended under confirmed plan in bankruptcy, court denied redemption under Chapter 13 plan; debtor not only failed to give purchaser formal notice of his bankruptcy case and his plan—by excluding purchaser from his list of creditors—debtor’s counsel also made no attempts to informally contact purchaser about bankruptcy petition). See §§7.88E, 11.12, 11.127–11.127A, 11.131.
When a debtor initially filing under Chapter 13 exercises the right to convert to Chapter 7, postconversion wages are not property of the estate. Moreover, the Supreme Court ruled that after conversion, (1) the trustee cannot distribute any accumulated wage payments to creditors as the Chapter 13 plan required; rather, (2) the debtor is entitled to the return of postpetition wages held and not yet distributed by the Chapter 13 trustee. See Harris v Viegelahn (2015) ___ US ___, 135 S Ct 1829. See §7.89.

Attorney fee awards were featured in a number of recent bankruptcy decisions. See, e.g., these cases in which the debtor was awarded fees:
America’s Servicing Co. v Schwartz-Tallard (In re Schwartz-Tallard) (9th Cir 2015) ___ F3d ___, 2015 US App Lexis 17847 (debtor was awarded attorney fees incurred in prosecuting adversary proceeding to collect damages awarded for stay violation and fees incurred in successfully defending judgment for damages on appeal; see §11.19);
Penrod v AmeriCredit Fin. Servs. (In re Penrod) (9th Cir 2015) ___ F3d ___, 2015 US App Lexis 17250 (allowed debtor award of attorney fees under CC §1717 when debtor successfully limited enforcement of contract solely on basis of federal bankruptcy law; see §§7.122, 11.94–11.95, 11.104); and
In re Giusto (Bankr ND Cal 2015) 532 BR 760 (if creditor loses its motion for stay relief because it is not real party in interest, debtor may obtain award of reasonable attorney fees as long as loan documents contain attorney fees clause; see §11.33).
An award of attorney fees also is available to a secured creditor who successfully defends preference, fraudulent transfer, and avoidance actions by the trustee under 11 USC §§547, 548, and 549, as long as both the fee clause in the loan agreement and applicable state law support the award. See In re Mac-Go Corp. (Bankr ND Cal, Mar. 20, 2015, No. 14-44181 CN, Ch 7) 2015 Bankr Lexis 904. See §§11.83, 11.86–11.87.
For determining eligibility for bankruptcy relief, the term “aggregate debts” includes those that are enforceable against either the debtor or the debtor’s property, including a secured claim in which the personal liability of the debtor was discharged in a prior Chapter 7 case. Davis v U.S. Bank (In re Davis) (9th Cir 2015) 778 F3d 809. See §11.2.

Notwithstanding Marrama v Citizens Bank of Mass. (2007) 549 US 365, 127 S Ct 1105, a number of courts have read the plain language of bankruptcy law to mandate a debtor’s absolute right to voluntarily dismiss a Chapter 13 case. See Ross v AmeriChoice Fed. Credit Union (In re Ross) (ED PA 2015) 530 BR 277; In re Wilson (Bankr SD OH, Mar. 23, 2015, No. 14-55009) 2015 Bankr Lexis 1330; In re Thompson (Bankr ED KY, Jan. 28, 2015, No. 10-23017) 2015 Bankr Lexis 271, cited in §11.3.
Although a bankruptcy court declared void the transfer of real property by a trustor whose property was in the custody of a state court receiver (see In re Domum Locis LLC (Bankr CD Cal 2014) 521 BR 661), that part of the decision was reversed in an unpublished opinion (see Domum Locis, LLC v Lloyds TSB Bank (In re Domum Locis LLC) (BAP 9th Cir, Aug. 5, 2015, No. CC-14-1571-DKiBr) 2015 Bankr Lexis 2603), which also affirmed the bankruptcy court’s order allowing stay relief so that legal actions to decide the true ownership of the property could proceed in the state court. See §11.58.

A bankruptcy appellate panel of the Ninth Circuit recently extended the presumption of reasonably equivalent value obtained in a foreclosure sale under BFP v Resolution Trust Corp. (1994) 511 US 531, 114 S Ct 1757 with respect to an adversary proceeding seeking to avoid a California tax foreclosure under 11 USC §548(a)(1)(B). See Tracht Gut, LLC v County of Los Angeles (In re Tracht Gut, LLC) (BAP 9th Cir 2014) 503 BR 804. The Ninth Circuit reasoned that California law provides for substantial lead time before the commencement of foreclosure proceedings, such as the publication of a notice of the sale and strict adherence to competitive bidding rules and auction procedures dictated by state law. See §11.86.

A cure of defaults under a plan will generally nullify all consequences of default, including default penalties such as higher interest, and will render lenders unimpaired. However, extending the terms of a matured note is an impermissible modification of a claim, not the curing of a default, and thus it is not permitted. In re Crump (Bankr D SC 2015) 529 BR 106. See §§11.100, 11.102, 11.124, 11.127.

When a debtor proposes to surrender the collateral (i.e., convey dirt for debt), the property may be valued at the fair market value, including a cushion for the costs of liquidation under some circumstances. Two recent Chapter 11 cases that illustrate this concept are In re Bate Land & Timber, LLC (Bankr ED NC 2015) 523 BR 483 and Farm Credit of Florida v Sugarleaf Timber (In re Sugarleaf Timber) (MD Fla 2015) 529 BR 317. See §11.129. See also §11.112.

Although Hamilton v Lanning (2010) 560 US 505, 130 S Ct 2464, endorsed a forward-looking approach that permits a court to consider potential future adjustments in projected disposable income, that decision does not require the bankruptcy court to speculate about the possible impact of a change in the debtor’s employment that may affect income or expenses but is not known or virtually certain at the time of confirmation. In re Trobiano (Bankr D Colo 2015) 532 BR 355. See §11.130.

No comments:

Post a Comment