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§ 544(a)(3)

In re Asher

Ruling
Trustee could not use bona fide purchaser status to avoid properly recorded mortgage.
Procedural posture

Chapter 7 trustee (the "trustee") filed a complaint against the trustee for a home loan trust and a mortgage servicing agent. In the complaint, the trustee alleged that he was entitled to avoid a certain mortgage pursuant to 11 U.S.C.S. § 544(a)(3) even though this particular adverse interest had been properly recorded prior to debtor's filing. Defendants filed a motion for summary judgment to dismiss the complaint.

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Consumer opinion summary, case decided on January 24, 2013 , LexisNexis #0213-126

In re Anloc LLC

Ruling
Claims based on agreement assuming future rights to oil and gas leases disallowed as assignment was void.
Procedural posture

A chapter 11 debtor objected to the allowance of claims of creditors, an individual and a trust, arising out of the creditors' efforts to obtain compensation for services performed in connection with the debtor's drilling operations.

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Commercial opinion summary, case decided on January 22, 2013 , LexisNexis #0213-054

Bruegge v. Farmers State Bank of Hoffman (In re Klasi Props. LLC)

Ruling
Trustee could not avoid mortgage with terms that provided sufficient notice of bank's interest.
Procedural posture

Plaintiff chapter 7 Trustee filed a complaint pursuant to 11 U.S.C.S. § 544(a)(3) and § 11 (765 ILCS 5/11) of the Illinois Conveyances Act seeking to avoid defendant bank's mortgage. The complaint alleged that the mortgage was insufficient pursuant to Illinois law to provide constructive notice to a bona fide purchaser of the bank's interest and, therefore, could be avoided. Before the court were the parties' cross-motions for summary judgment.

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Commercial opinion summary, case decided on January 18, 2013 , LexisNexis #0213-055

Royal v. First Interstate Bank (In re Trierweiler)

Ruling
Bankruptcy court properly held that defining the Mortgage Electronic Registration Systems as mortgagee did not split note from mortgage to make it invalid or avoidable.
Procedural posture

Appellant trustee sought review of a decision from the United States Bankruptcy Court for the District of Wyoming, in favor of appellees, a bank and the Mortgage Electronic Registration Systems (MERS), on his adversary complaint seeking to avoid under 11 U.S.C.S. § 544 the mortgage on the debtors' home.

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Court :
Judge or Jurisdiction information not available
Consumer opinion summary, case decided on December 28, 2012 , LexisNexis #0113-087

Seelen v. Couillard (In re Couillard)

Ruling
Trustee could properly avoid bank's security interest in two parcels not included in description.
Procedural posture

Chapter 7 trustee filed an adversary proceeding against two chapter 7 debtors and a bank seeking a determination that he was allowed under 11 U.S.C.S. § 544(a)(3) to avoid a mortgage the bank held on two parcels of land the debtors owned. The court denied the bank's motion for summary judgment, and the bank asked the court to reconsider its decision.

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Consumer opinion summary, case decided on December 06, 2012 , LexisNexis #0213-087

Mclatchey v. GMAC Mortgage LLC (In re Lacy)

Ruling
Improperly acknowledged mortgage could be avoided.
Procedural posture

The chapter 7 trustee filed a motion for summary judgment asserting that the failure of defendant mortgagee to obtain the properly certified signature of debtor on its mortgage rendered the recording of the mortgage ineffective to provide constructive notice to a subsequent bona fide purchaser, including the trustee, pursuant to 11 U.S.C.S. § 544(a)(3). The mortgagee asserted substantial compliance with certification under Ohio law.

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Consumer opinion summary, case decided on November 29, 2012 , LexisNexis #1212-122

Reid v. Wells Fargo Bank

Ruling
Trustee could not exercise "strong arm power" to avoid mortgage due to terms of confirmation order.
Procedural posture

Among other matters in her Complaint in this adversary proceeding, plaintiff chapter 13 Trustee, exercising her "strong arm power" under 11 U.S.C.S. § 544(a)(3), sought to avoid the mortgage held by defendant creditor on debtors' residence. On the same basis, she also objected in Count II to the creditor's proof of claim insofar as it claimed secured status. The creditor sought summary judgment on Counts I, II, III, IV.

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Consumer opinion summary, case decided on October 10, 2012 , LexisNexis #1112-021

Green v. HSBC Mortg. Servs. (In re Green)

Ruling
Lis pendens provided sufficient notice to defeat trustee's rights as bona fide purchaser for value.
Procedural posture

Before the court was a summary judgment motion of counter-defendants debtor and the chapter 13 trustee (the "Trustee" and together with debtor, the "plaintiffs"). A counter- plaintiff/cross-claimant, i.e., a mortgage servicer for the Government National Mortgage Association, cross-moved for summary judgment. The Complaint sought a determination of the validity, priority, and extent of a creditor's lien against debtor's real property ("Property").

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Consumer opinion summary, case decided on July 25, 2012 , LexisNexis #0812-125

In re Whittman

Ruling
Creditor did not hold secured claim due to incorrect property description in recorded mortgage.
Procedural posture

Chapter 13 debtors filed objections to proofs of claim filed by a creditor.

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Consumer opinion summary, case decided on July 09, 2012 , LexisNexis #0912-015

Olsen v. Heaver (In re Heaver)

Ruling
Mortgage recorded outside chain of title could be avoided.
Procedural posture

Chapter 7 trustee filed an adversary complaint to determine the validity of creditor's mortgage on the debtor owner's real property, arguing that, because the mortgage was recorded before the deed to the debtor, it was recorded outside the chain of title under the Illinois Conveyance Act, 765 ILCS 5/30, and was thus avoidable under 11 U.S.C.S. § 544(a)(3).

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Consumer opinion summary, case decided on June 13, 2012 , LexisNexis #0712-024