It’s true: I’ve now heard it from two bankruptcy judges in the space of three weeks.
And it makes sense.
Wall Street has created an entity to buy up stripped off junior liens. They expect to challenge the validity of the strip-off as home values improve.
They think there’s money to be made, on our mistakes, if they only succeed in 1 in 50 cases.
I started an audit of my 2009 lien strip files this week, before I heard this news a second time. Of the four cases I examined, I’m going back to revisit service in two of them. Ouch!
Your choices? Clean up your cases now or buy shares in the new venture.
More on things to keep you awake at night.
Image courtesy of Magnesus and Open Clip Art Library
Malcolm Ruthven says
Cathy, is service on the lender the only danger area?
Or service on the servicer? or not serving the last beneficiary on the public record?
Jane Cervantes says
What can you do if it is an active chapter 13 case after the motion or after the discharge? What are you doing to correct defective service?
Jim Cossitt says
Is the sole issue here service of process ? What is the ticking time bomb ?
Ability to identify the Real Party in Interest ? And then serve that person ?
My guess is that lien strips will be challenged on the issues of service: did you give notice to the right entity and was it in the required way?
So now I’m sufficiently panicked about 3 of my lien-stripping cases, but at least they’re active cases, so I can still serve some of the other parties. Do you recommend doing a scream-or-die notice to them? Do you recommend requesting an amended order valuing the property, showing service to the additional entities?
Steven Lever says
Wait, wouldn’t you just be able to reopen the case to serve them? The value would still be the value as of the petition date and you’d have an appraisal on that. Steve Lever