Bright v. Wash. Mutual Bank F.A. (In re Bright)
Feb
23
2006
Ruling
Retroactive relief from the automatic stay was granted to a mortgagee to protect subsequent good faith purchasers and since the debtors acted in bad faith by failing to disclose the property interest.
Procedural posture
Appellee mortgagee foreclosed on appellant debtor's real property without knowledge of the debtor's bankruptcy until the debtor filed a counterclaim in the mortgagee's state court interpleader action to determine entitlement to surplus proceeds from the foreclosure sale. The debtor appealed the order of the Bankruptcy Court for the District of Massachusetts which granted the mortgagee retroactive relief from the bankruptcy stay.
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