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§ 544(a)(3)

In re Thulis

Ruling
Bank held a general unsecured claim on property against which mortgage was never recorded.
Procedural posture

Debtors owned two adjoining lots of real property and constructed a residence on one lot which was financed by a bank, but the bank mistakenly recorded its mortgage interest by reference only to the unimproved lot. The bankruptcy trustee objected to the bank's secured claim against the improved lot.

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Consumer opinion summary, case decided on June 05, 2012 , LexisNexis #0812-126

Wallach v. Countrywide Home Loans Inc. (In re Sheppard)

Ruling
Lis pendens prevented trustee from avoiding mortgage that was recorded unsigned as bona fide purchaser.
Procedural posture

After receiving a duly executed mortgage on debtor's real property, defendant lender recorded by mistake an unsigned copy of that same instrument. In this proceeding, plaintiff chapter 7 trustee sought to avoid that mortgage pursuant to 11 U.S.C.S. § 544(a)(3). The lender moved for summary judgment. The Trustee cross-moved for summary judgment.

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Consumer opinion summary, case decided on May 24, 2012 , LexisNexis #1012-022

Richardson v. Deutsche Bank Natl Trust Co. (In re Stephens)

Ruling
Trustee lacked standing to contest mortgage assignment and could not set aside mortgage or foreclosure.
Procedural posture

Chapter 7 trustee filed a complaint to invalidate a mortgage and set aside the foreclosure sale of debtor's home under 11 U.S.C.S. §§ 541, 544(a)(3). A mortgage assignor and a mortgage assignee, each filed a motion for summary judgment, Fed. R. Civ. P. 56(a).

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Consumer opinion summary, case decided on May 21, 2012 , LexisNexis #0712-025

Bakst v. Cario (In re Cario)

Ruling
Estate held a one-half interest in property where notation on quit claim deed to debtor, even if valid, was junior to trustee's interest as bona fide purchaser.
Procedural posture

Plaintiff, the chapter 7 trustee, brought an adversary action against defendant grantor, seeking a ruling that debtor's estate held title to an undivided one-half interest in certain real property, free of any claim of the grantor, and an order authorizing the trustee to sell the real property. Grantor countered that the debtor grantee held a one-half interest in the real property for the grantor as a constructive or resulting trust.

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Consumer opinion summary, case decided on April 03, 2012 , LexisNexis #0412-124

Richardson v. Gifford State Bank (In re Crane)

Ruling
Mortgages that failed to state interest rate or maturity date could be avoided.
Procedural posture

In his adversary complaint, plaintiff chapter 7 trustee claimed that two mortgages were defective and subject to avoidance pursuant to 11 U.S.C.S. § 544, in that both mortgages failed to state the interest rate and the maturity date relative to the subject mortgages in violation of 765 ILCS 5/11. The matter came before the court on cross-motions for summary judgment filed by the parties. Defendant was a creditor.

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Consumer opinion summary, case decided on February 29, 2012 , LexisNexis #0412-023

SunTrust Bank v. Macky (In re McCormick)

Ruling
Deed of trust recorded against the wrong parcel of land was properly avoided.
Procedural posture

Trustee commenced an action under 11 U.S.C.S. § 544(a)(3) to avoid the bank's lien on a parcel of debtor's real property because the deed of trust, while recorded as to a different contiguous parcel, was not so recorded as to the parcel at issue. The bankruptcy court ordered the bank's lien avoided, and the U.S. District Court for the Middle District of North Carolina, at Greensboro, affirmed. The bank appealed.

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Court :
Judge or Jurisdiction information not available
Consumer opinion summary, case decided on February 10, 2012 , LexisNexis #0312-021

DeGiacomo v. CitiMortgage Inc. (In re Nistad)

Ruling
Defective mortgage could be avoided and preserved for the benefit of the estate.
Procedural posture

A chapter 7 trustee, seeking to avoid a mortgage held by defendant creditor under 11 U.S.C.S. § 544(a)(3) and preserve it for the benefit of the estate, filed a motion for summary judgment.

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Consumer opinion summary, case decided on January 30, 2012 , LexisNexis #0212-125

Smoky Mt. Title Inc. v. Tennessee State Bank (In re Thomas Homes LLC)

Ruling
Deed of trust erroneously recorded after quit claim deed to debtor was superior to claim of trustee.
Procedural posture

Plaintiffs title company and private trustee, sought a determination that one of the defendants, a bank, held a lien superior to the interests of all other defendants in the real property in issue. Although the bank's lien had been recorded, a quit claim deed had previously been recorded conveying the property from the borrowers to chapter 7 debtor home builder. Its chapter 7 trustee asserted he had a superior claim under 11 U.S.C.S. § 544(a)(3).

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Commercial opinion summary, case decided on January 17, 2012 , LexisNexis #0612-094

Villareal v. Morales (In re Villareal)

Ruling
Debtor could avoid tax foreclosure sale of homestead where deed was not recorded prior to petition date.
Procedural posture

Chapter 13 debtors sought to set aside a tax foreclosure sale of the debtors' homestead pursuant to 11 U.S.C.S. § 544(a)(3).

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Consumer opinion summary, case decided on December 28, 2011 , LexisNexis #0212-025

Richardson v. Citimortgage Inc. (In re Emerson)

Ruling
Summary judgment denying avoidance of improperly released mortgage affirmed.
Procedural posture

Plaintiff, a Chapter 7 trustee, challenged an order from the United States Bankruptcy Court for the Western District of Michigan, which granted summary judgment to defendant creditor and denied summary judgment to the trustee on his avoidance action pursuant to 11 U.S.C.S. § 544(a)(3).

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Court :
Judge or Jurisdiction information not available
Consumer opinion summary, case decided on October 07, 2011 , LexisNexis #1111-027