Why Do Homeowners Need to File Chapter 7 Bankruptcy

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WHY DO YOU NEED TO FILE “CHAPTER 7” PRO SE BANKRUPTCY?

Bankruptcy laws does not require debtors to have an attorney to file for bankruptcy relief. You are allowed to represent yourself in Chapter 7 or Chapter 13 bankruptcy as a “Pro se” debtor.
“Bankruptcy” can be a daunting and even frightening, concept.

A better way to deal with these fears was conceived by the founders of our country when they, purposefully, included in the Constitution the “subject of Bankruptcies throughout the United States.” And so, through several incarnations, the present bankruptcy law remains the surest way to obtain a fresh financial start.

Individuals can file bankruptcy without an attorney, which is called filing Pro se.

One out of every 10 Bankruptcy cases is filed WITHOUT a lawyer.

Once you have filed for bankruptcy, your wage garnishment will cease. Creditors included in the filing must stop all collection activity after a bankruptcy is filed, including garnishment proceedings. Your extra wages should help you catch up on your mortgage payments and assist in solving one of your financial troubles.

SO YOU MAY ASK – WHY DO YOU NEED TO FILE “CHAPTER 7” BANKRUPTCY?

Fresh Start
Chapter 7 bankruptcy is a form of debt relief by which you may eliminate unsecured debts such as credit cards, medical bills and personal loans. In most cases, you can keep your home, car and other personal belongings. In order to be eligible for Chapter 7, your income, usually, can be no greater than the medium income for your State, based on the size of your family.

Stop Garnishments
A Chapter 7 is one of the most effective ways to immediately stop garnishments. Garnishments can take a portion of your hard-earned wages, making it nearly impossible for you to afford basic necessities. By filing a Chapter 7 bankruptcy and stopping the garnishment, you will be able to use your income for more important necessities for your family and possibly start saving for your family’s future.

Stop Creditor Harassment
If creditors are bothering you at work or home, harassing your family, friends and neighbors, call at all hours, you can put an end to it immediately simply using our Bankruptcy package to file your Bankruptcy.

Cosigner Is Not Paying
If you cosigned for a friend or relative, and their failure to pay that debt has resulted in collection activity or a lawsuit against you, Chapter 7 can eliminate your liability for the cosigned debt.

Eliminate Repossession Debt
After your vehicle is repossessed, they auction it off to reduce their loss, usually at a sales price much less than the retail value. You are still responsible for the balance on the car, called a “deficiency balance.” Remove the risk of law suits & garnishments arising from the deficiency balance by filing a Chapter 7.

“Reaffirm” Credit Cards You Want to Keep
The process of “reaffirmation” during the chapter 7 bankruptcy, will allow you to retain credit cards for which you, and the credit card company, want the relationship to continue. When you “reaffirm” the debt, you usually must promise to pay the debt you otherwise would eliminate in the proceedings.

End Law Suits
Lawsuits to collect debts are automatically enjoined upon the filing of a chapter 7 bankruptcy. The worry of a judgment with resultant garnishments and levies will no longer be a concern. The creditor must abide by bankruptcy laws and stop the lawsuit!

Rebuild Your Credit
Chapter 7 is one way for you to begin re-establishing your credit by reducing your debt-to-income ratio. With little or no remaining debt, lenders may see that you will be better able to repay your debts in the future. Many people who file Chapter 7 will finance cars after discharge and may even receive solicitation for unsecured credit within months. With our package, your can also see the estimate of what your credit score will be 1 year after the bankruptcy is completed, if you follow the prescribed plan.

Now What?

Our Pro se Bankruptcy package may be able to provide you with many of the following benefits. BUY NOW
(Forms, Pleadings and Guides, Case Law, References – Including Adversary Proceeding).

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What Every Homeowner in Foreclosure Need to Know About Bankruptcy Appeals

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Every appeal requires an appellate advocate to understand and follow a series of rules. When an appeal is from a decision by a federal bankruptcy court, there is yet another layer of rules and complexity to consider. This article briefly identifies a dozen important points
about bankruptcy appeals.

1. The Time for Filing a Notice of Appeal in a Bankruptcy Appeal Is Generally Shorter Than in Other Appeals.
Under 28 U.S.C. § 158(c)(2) and Federal Rule of Bankruptcy Procedure (“Bankruptcy Rule”) 8002(a), a party seeking to appeal a decision by a bankruptcy court has 10 days to file its appeal.1 This is 20 days less than the 30 days a party generally is given under the Federal Rules of Appellate Procedure (“F.R.A.P.”) to appeal from district court to a federal appellate court.2 As with F.R.A.P. 4(a)(5), the Bankruptcy Rules permit some leeway if an appellant misses its deadline. Under the Bankruptcy Rules, a bankruptcy court may allow an appellant who fails to timely file up to 20 additional days to file where that appellant can demonstrate “excusable neglect.”3 After 30 days, however, a bankruptcy appellant loses its right to appeal even if there is excusable neglect.4 Factors to be considered in determining whether there is excusable neglect include the danger of prejudice to the appellee; the length of delay and its impact on the judicial proceeding; the reason for the delay; whether the delay was in the movant’s control; and the movant’s good faith.5

2. An Appellant May Waive an Issue Not Raised at the Outset of its Bankruptcy Appeal.
Under Bankruptcy Rule 8006, within 10 days of filing its Notice of
Appeal, an appellant must file and serve a designation of the items to be
included in the record on appeal and a statement of issues to be presented
on appeal. If an appellant fails to include an issue in this Statement, the
issue is waived even if this had been raised and/or decided by the bankruptcy
court.6

3. Those Who Ignore Deadlines and Procedural Rules May Forfeit Their Appeal.
Bankruptcy Rule 8001(a) authorizes dismissal of a bankruptcy appeal when a party fails to take any required step other than filing its Notice of Appeal. Courts adjudicating bankruptcy appeals may dismiss appeals when a party fails to take a necessary step, such as filing its record designations, statement of issues or its brief.7
While the Bankruptcy Rules permit dismissal, however, certain circuits require the appellate court to weigh a series of factors before it dismisses a case in its entirety. For example, the Third Circuit requires the balancing of six factors before a case is dismissed. These are:
• The extent of the party’s personal responsibility;
• The prejudice to the adversary caused by the failure to meet scheduling
orders;
• A history of dilatoriness;
• Whether the conduct of the party or the attorney was willful or in bad
faith;
• The effectiveness of sanctions other than dismissal, which entails an
analysis of alternative sanctions;
• The meritoriousness of the claim or defense.8

4. In Five Circuits, Bankruptcy Appeals May Be Heard in the First Instance by Two Different Types of Courts.
Under 28 U.S.C. § 158(c)(1), an appellant in an appeal from bankruptcy court may choose in the first instance to appeal either to a district court acting as an appellate court or, if the relevant circuit provides for one, to a Bankruptcy Appellate Panel (“BAP”). Even if the appellant chooses a BAP, however, any other party to the appeal may, no later than 30 days after service of the notice of appeal, ask to have the appeal heard by the relevant district court. The First, Sixth, Eighth, Ninth and Tenth Circuits each have a BAP. If an appeal is to a BAP, then the Bankruptcy judge’s decision will be reviewed by fellow sitting bankruptcy judges.

Usually a BAP consists of three sitting bankruptcy judges in the circuit who are assembled for a particular day of argument. By their very nature, BAPs will consist of judges who have special expertise regarding bankruptcy issues, while district courts may not. The BAP may sit in different places in the circuit. For example, the Eighth Circuit BAP conducts hearing in Omaha, St. Louis, Kansas City, and other locations where its bankruptcy courts sit.

5. BAP Rules Vary by Circuit.
Just like the individual federal circuit courts of appeal, the various BAPs each have their own rules. These vary between each circuit. Any party in a BAP appeal, therefore should know the specifics and particularities of the specific BAP’s rules and should follow these.
Among these specialized rules, for example, are that, in the Eighth Circuit BAP, parties are limited to opening briefs of 6500 words.9 The Ninth Circuit BAP Rules provide that only those portions of transcripts included in the excerpts of the record will be considered in an appeal and that these must include excerpts necessary for the BAP to apply the required standard of review to a matter.10 The First Circuit BAPRules generally limit argument to 15 minutes per side.11 The Tenth Circuit BAP requires that a brief include a statement of related cases—i.e., one that includes the same litigants and substantially the same fact pattern or legal issues – that are
pending in any other federal court.12 The Sixth Circuit BAP Rules provide
for a possible pre-argument conference and mediation.13

6. The Bankruptcy Rules Generally Govern Appeals to the District Court.
As noted in the prior section, BAPs have elaborate rules that govern all aspects of appeals before them. By the terms of the Bankruptcy Rules, these specific rules can supersede conflicting terms in the Bankruptcy Rules. However, when an appeal is to the district court, the Bankruptcy Rules generally apply in the absence of a local rule or district court rule specifically addressing bankruptcy appeals, which are much less common.

While not as comprehensive as the F.R.A.P., the Bankruptcy Rules have 20 provisions governing all aspects of appeals.14 These rules addresses appellate issues, including, among others, the filing and service of appellate papers;15 the filing and service of briefs and appendices;16 the form of briefs and their length;17 motions;18 oral argument;19 disposition of the appeal;20 costs;21 and rehearing,22 among others. (These rules also provide for the accelerated filing of district court appeals, as an appellant is to serve and file its brief within 15 days after entry of the appeal on the docket; the appellant is to serve its brief within 15 days after service of the appellant’s brief and the appellant is to serve its reply within 10 days after service of the appellee’s brief.)23 In the absence of rules to the contrary, opening briefs may be up to 50 pages and reply briefs up to 25 pages.
Under Bankruptcy Rule 8012, oral argument is to be generally allowed in all cases. In practice, however, oral argument is much less common before district courts. When an appeal is before district court, there is some question about whether its decision has precedential effect.24

7. Bankruptcy Appeals Often Include an Extra Tier of Review.
Generally, before an appeal reaches a federal circuit court of appeals, it is adjudicated by either a BAP or a district court. The findings of these first tier courts are not binding on the circuit court of appeals and, the appellate court owes no deference to the decisions by the BAP or district court.
Review by the circuit court of appeals is plenary.25 Nonetheless, some circuit courts have noted that the first tier of appeal acts as a helpful filter.26
An appellate court may reach issues brought up before but not decided by the district court or BAP.27

8. Direct Appeal to the Circuit Court of Appeals Is Allowed in Limited Instances.
Pursuant to Section 1233 of the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”), a circuit court of appeals has discretion to permit a direct appeal frombankruptcy court where there is uncertainty in the bankruptcy court, either due to the absence of a controlling legal decision or a conflicting decision on the issue and the issue is of great importance, or where the court finds it is patently obvious that the bankruptcy court’s decision either was correct or incorrect, such that the first tier of review in the district court or BAP is less efficient and helpful.28

9. At Each Tier of the Appeal, The Bankruptcy Court Is Given the Same Level of Deference and Same Form of Scrutiny.
Courts in bankruptcy appeals review issues of law de novo and findings of fact for clear error.29 Courts of appeal apply the same standard of review as do BAPs and district courts.30 Courts of appeal generally review issues of procedure under an abuse of discretion standard. These include motions to compromise or to lift a stay, for example.31

10. This Is a Greater Threat of Mootness in Bankruptcy Appeals Than in Other Federal Appeals.
A bankruptcy appeal may become constitutionally moot where events may occur that make it impossible for the appellate court to fashion effective relief.32 Thus, for example, if, while an appeal is pending, a plan is confirmed pursuant to which all assets are distributed, all creditors with allowed claims are paid in full, and the bankruptcy case is closed such that the debtor no longer exists, an appeal against that debtor is moot because there is no meaningful relief that may be granted.33 An appeal may also be considered “equitably moot” where a change in circumstances makes it inequitable for a court to consider the merits of an appeal.34
However, if there remains any possibility that an appeal may result in a tangible benefit to the appellant, it is not moot.35

11. Only Those Persons Aggrieved Have Standing to Bring a Bankruptcy Appeal.
Only those whose rights or interests are directly and adversely affected pecuniarily by an order of the bankruptcy court have standing to bring an appeal.36

12. Appellate Courts Take a Broader Notion of “Finality” in Bankruptcy Appeals Than in Other Appeals.
Because of the length of many bankruptcy proceedings and the waste of time and resources that may result if the court denied immediate appeals, federal courts of appeal apply a broader concept of “finality” when considering bankruptcy appeals under 28 U.S.C. § 1291 than in considering non-bankruptcy appeals.37 Courts apply a number of factors in determining whether to assert appellate jurisdiction. These include:
1) the impact on the assets of the bankruptcy estate;
2) the necessity for further fact-finding on remand;
3) the preclusive effect of the court’s decision on the merits in further litigation,
and
4) the interest of judicial economy.38
Each of these issues, of course, could justify an article in itself. I hope
these provide some helpful thoughts and issues to consider when participating
in a bankruptcy appeal.
NOTE
1 Certain types of motions toll this time for filing until the last such motion
is disposed of. See Bankruptcy Rule 8002(b).
2 See F.R.A.P.4(a).
3 Bankruptcy Rule 8002(c)(2); Bankruptcy Rule 9006(b). Of course where
an appeal is from a district court to a federal circuit court on a bankruptcy
issue, F.R.A.P. 4’s 30-day rule applies.
4 See Shareholders v. Sound Radio, Inc., 109 F.3d 873, 879 (3d Cir. 1997).
The law is unsettled as to whether bankruptcy appellate deadlines are “jurisdictional,”
such that objections to untimeliness may be waived if not promptly
made. See In re Fryer, 2007 WL 1667198 (3d Cir. June 11, 2007) (citing
Kontrick v. Ryan 540 U.S. 443 (2004), and Eberhart v United States, 546 U.S.
12 (2005)).
5 See Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’Ship, 507 U.S. 380,
395 (1993).
6 See In re GGM, P.C., 165 F.3d 1026, 1032 (5th Cir. 1999). Of course, one
may not first raise new issues on appeal that were not presented before the
bankruptcy court. See In re Ginther Trusts, 238 F.3d 686, 689 & n.3. (5th Cir.
2001).
7 See, e.g., In re Lynch, 430 F.3d 600 (Cir. 2005); In re Braniff Airways, Inc.,
774 F.2d 1303, 1305 n.6 (5th Cir. 1985).
8 Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863, 868 (3d. Cir. 1984).
See also In re Harris, 464 F.3d 263 (2d Cir. 2006) (failure to include required
transcript of oral argument did not warrant dismissal of appeal where lesser
sanctions were available); In re Beverly Mfg. Corp., 778 F.2d 666, 667 (11th
Cir. 1985) (“Dismissal typically occurs in cases showing consistently dilatory
conduct or the complete failure to take any steps other than the mere filing
of a notice of appeal.”).
9 8th Cir. BAP Rule 8010A.
10 9th Cir. BAP Rule 8006-1.
11 1st Cir. BAP Rule 8012-1.
12 10th Cir. BAP Rule 8010-1.
13 6th Cir. BAP Rule 8080-2.
14 Bankruptcy Rules 8001-8020.
15 Bankruptcy Rule 8008.
16 Bankruptcy Rule 8009.
17 Bankruptcy Rule 8010.
18 Bankruptcy Rule 8011.
19 Bankruptcy Rule 8012.
20 Bankruptcy Rule 8013.
21 Bankruptcy Rule 8014.
22 Bankruptcy Rule 8015.
23 Bankruptcy Rule 8009.
24 See In re Shattuck Cable Corp., 138 B.R. 557, 565 (Bankr. N.D. Ill. 1992).
25 See In re Best Prods. Co., 68 F.3d 26, 30 (2d Cir. 1995).
26 See Weber v. United States Trustee, 484 F.3d 154 (2d Cir. 2007) (“In many
cases involving unsettled areas of bankruptcy law, review by the district court
would be most helpful. Courts of appeal benefit immensely from reviewing
the efforts of the district court to resolve such questions”).
27 See Hartford Courant Co. v. Pellegrino, 380 F.3d 83, 90 (2d Cir. 2004).
28 See Weber, 484 F.3d at 157 (citing BAPCPA § 1233, 28 U.S.C.
§ 158(d)(2)(a)(i)-(iii)).
29 See In re ABC-Naco, Inc., 483 F.3d 470, 472 (7th Cir. 2007).
30 See In re Senior Cottages of Am., 482 F.3d 997, 1000-1001 (8th Cir. 2002)
31 See In re Martin, 222 Fed. Appx. 360, 362 (5th Cir. 2007).
32 See In re Focus Media Inc., 378 F.3d 916, 922 (9th Cir. 2004).
33 See In re State Line Hotel, Inc., 2007 WL 1961935 (9th Cir. July 5, 2007);
see also Gardens of Cortez v. John Hancock Mut. Life Ins. Co., 585 F.2d 975,
978 (10th Cir. 1978) (dismissal of bankruptcy petition moots appeal to lift
stay).
34 See Ederel Sport v. Gotcha, Int’l, L.P., 311 B.R. 250, 254 (9th Cir. BAP
2004).
35 See In re Howard’s Express, Inc., 151 Fed. Appx. 46 (Oct. 5, 2005) (conversion
from Chapter 11 to Chapter 7 did not moot appeal because liquidation
was not complete and preference actions remained to be tried, which
could generate assets to satisfy claims of appellants).
36 See In re PWS Holding Corp., 228 F.3d 224, 249 (3d Cir. 2000).
37 See In re Owens Corning, 419 F.3d 196, 203 (3d Cir. 2005).
38 Id.

What Homeowners Need to Know about Lien Stripping in Secured/Valuation of Claims in Bankruptcy & Adversary Proceeding

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SECTION 506 LIEN STRIPPING & VALUATION

11 U.S.C. § 1322 (b): Subject to subsections (a) and (c) of this section, the plan may- (2) modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor’s principal residence… 11 U.S.C. § 506 (a)(1): An allowed claim of a creditor secured by a lien on property in which the estate has an interest, … is a secured claim to the extent of the value of such creditor’s interest in the estate’s interest in such property, … and is an unsecured claim to the extent that the value of such creditor’s interest … is less than the amount of such allowed claim. Such value shall be determined in light of the purpose of the valuation and of the proposed disposition or use of such property, and in conjunction with any hearing on such disposition or use or on a plan affecting such creditor’s interest.

I. WHAT DOES IT MEAN TO STRIP THE LIEN?
11 U.S.C. § 506 describes how to determine whether a claim is secured. Section 506(a)(1) explains bifurcation (division) of an allowed claim into secured and unsecured parts—the secured part being “secured” by the collateral’s value, the unsecured part being the remaining amount of the claim in excess of the collateral’s value. For example, an allowed claim of $200,000 with collateral valued at $170,000 is bifurcated between a secured claim of $170,000 and an unsecured claim of $30,000, resulting in “lien stripping” of $30,000. If the $170,000 collateral is related to an allowed first claim of $200,000 and an allowed second claim of $10,000, the $10,000 claim can be “stripped” as well. The distinction may be identified as “stripping down” (or a “cramdown” of) the lien to the value of the collateral or “stripping off” the lien completely.

II. CHAPTER 7 CASES – UNSECURED JUNIOR MORTGAGE MAY NOT BE STRIPPED OFF.
Dewsnup v. Timm, 502 U.S. 410 (U.S. 1987) prohibited Chapter 7 debtors from using 11 U.S.C. § 506(d) to void an undersecured lien on real property. Case law has extended Dewsnup to prohibit lien stripping on wholly unsecured liens (in Chapter 7 cases), holding that unless and until there is a claims allowance process, there is no basis for the debtor to avoid a lien under 11 U.S.C. § 506. The legislative history of Section 506 also makes it clear that lien stripping is permissible in reorganization chapters, but not in Chapter 7. See In re Talbert, 344 F.3d 555 (6th Cir. 2003), Concannon v. Imperial Capital Bank (In re Concannon), 338 B.R. 90 (Bankr.Fed.App. 2006).

III. CHAPTER 13 CASES – UNSECURED JUNIOR MORTGAGE MAY BE STRIPPED OFF.
a. Nobelman v. American Savings Bank, 508 U.S. 324 (U.S. 1993). A “strip down” or “cramdown” of claim that is secured by real property that is the debtor’s primary residence is prohibited. The United States Supreme Court held that after applying 11 U.S.C. § 1322(b)(2) and 11 U.S.C. § 506, a lien “strip down” of an undersecured home mortgage lien is impermissible in a chapter 13 case for a claim secured by the debtor’s principal residence, because it modifies the total package of rights for which such a claim holder bargained.

b. 11 U.S.C. § 1322(b), commonly known as the anti-modification clause, prevents debtors from changing the rights of creditors whose claims are secured only by a security interest in real property that is the debtor’s principal residence. Under various Circuit Court decisions interpreting Nobelman in Chapter 13 cases, §1322(b)(2) protections are no longer available to a creditor whose lien is a junior lien, and where the amount due to the senior lienholder(s) is greater than the value of the property pledged as security to that loan. Such creditor’s claims may be treated as an unsecured claim in the plan and paid consistent with other unsecured claimholders.

c. Majority view: While the anti-modification clause in § 1322(b) uses the term “claim” rather than “secured claim” and, therefore, applies to both the secured and unsecured part of a mortgage, the anti-modification clause still states that the claim must be “secured only by a security interest in … the debtor’s principal residence.” 11 U.S.C. § 1322(b)(2) (emphasis added). If valuation of the property under §506(a) determines that a junior mortgage holder’s claim is wholly unsecured, then the bank is not in any respect a “holder of a claim secured by the debtor’s residence” under §1322(b). Accordingly, the junior mortgage holder simply has an unsecured claim and the anti-modification clause does not apply. On the other hand, if any part of the mortgagee’s claim is secured, then, under Nobleman’s interpretation of the term “claim,” the entire claim, both secured and unsecured parts, cannot be modified.

The several Circuit Courts that have ruled on the issue, including the Sixth Circuit, support the majority position allowing lien stripping of wholly unsecured junior mortgage liens. See Pond v. Farm Specialist Realty (In re Pond), 252 F.3d 122 (2nd Cir. 2001); McDonald v. Master Fin., Inc.(In re McDonald), 205 F.3d 606 (3d Cir. 2000), cert. denied, 531 U.S. 822, 121 S.Ct. 66, 148 L.Ed.2d 31 (2000); Bartee v. Tara Colony Homeowners Ass’n (In re Bartee), 212 F.3d 277 (5th Cir.2000); Lane v. W. Interstate Bancorp (In re Lane), 280 F.3d 663 (6th Cir.2002); Zimmer v. PSB Lending Corp. (In re Zimmer), 313 F.3d 1220, (9th Cir. 2002); Tanner v. FirstPlus Fin., Inc. (In re Tanner), 217 F.3d 1357 (11th Cir. 2000). The only variance in this uniformity among the circuits is an Eleventh Circuit opinion, which disagrees with the In re Tanner panel that originally decided the issue, but which followed the Tanner decision as established precedent in that circuit. See In re Dickerson, 222 F.3d 924 (11th Cir.2000). See also Domestic Bank v. Mann (In re Mann), 249 B.R. 831, 833 (B.A.P. 1st Cir. 2000); Griffy v. U.S. Bank (In re Griffey), 335 B.R. 166 (B.A.P. 10th Cir. 2005); Waters v. The Money Store (In re Waters), 276 B.R. 879 (Bankr.N.D.Ill. 2002); In re King, 290 B.R. 641 (Bankr.C.D.Ill. 2003).

d. Minority view: While the Circuit Courts are nearly uniform in support of the majority view, some Bankruptcy Courts take a minority view. They hold that a properly perfected mortgage claim is literally “secured only by a security interest in real property that is the debtor’s principal residence” within the meaning of §1322(b), irrespective of whether the claim is wholly or partially secured, or totally unsecured after the application of §506(a). They reason that this view is consistent with the emphasis in the Nobelman decision on the state law contractual rights bargained for by the mortgagor and mortgagee, and with the legislative history which indicates that §1322(b) was intended to encourage the flow of capital into the home lending market and to exempt such Mortgages from valuations and bifurcations as the result of an application of § 506(a). Cases following minority view include Barnes v. American Gen. Fin. (In re Barnes), 207 B.R. 588 (Bankr.N.D.Ill.1997).

e. The Hon. Keith Lundin has expressed support for the minority view, that Nobleman was concerned about protecting the state law rights of the residential mortgagee and did not consider the issue to be a question of valuation. Lundin’s view and the minority view is there is no justification, following the Nobelman decision, for courts to focus on the value, at the date of the petition, of the real property securing a debt as the threshold of whether the rights of the mortgagee may be modified. In the majority view, a mortgagee with $1.00 in equity receives the anti-modification protection of §1322(b), while the mortgagee with no equity does not. Keith M. Lundin, Chapter 13 Bankruptcy, 3d. Ed. §14.1, p. 221 (2000 & Supp. 2004)

f. Lien stripping in the Seventh Circuit:
i. Although every circuit court of appeals that has considered the question has followed the majority view, the Seventh Circuit Court of Appeals has not directly ruled on the issue; thus, lower courts in the Seventh Circuit may follow either the majority or the minority view.
ii. In the Northern District of Illinois, the cases go both ways. Barnes v. American Gen. Fin. (In re Barnes), 207 B.R. 588 (Bankr. N.D. Ill. 1997) (follows the minority view that 11 U.S.C. §1322(b)(2) prohibits stripping off wholly unsecured mortgages.) Waters v. Money Store (In re Waters), 276 B.R. 879 (Bankr. N.D. Ill. 2002) follows the majority position after a thorough analysis of both views. Also in the Northern District of Illinois, the district court in In re Holloway v. United States, 2001 U.S. Dist. LEXIS 16898 (N.D. Ill. Oct. 16, 2001) follows the majority view.

iii. In the Central District of Illinois, In re King, 290 B.R. 641 (Bankr. C.D. Ill. 2003) adopted Waters, supra.
iv. In In re Black, 2002 Bankr. LEXIS 1752 (Bankr. N.D. Ind. 2002), the Northern District of Indiana provides a comprehensive review of cases following the majority and minority views, and decides that stripping off a wholly unsecured mortgage from the debtor’s residence “represents the most appropriate reading of both [11 U.S.C.] § 1322(b)(2) and Nobelman.”

IV. EXCEPTIONS TO ANTI-MODIFICATION: – NOBELMAN EXCEPTIONS – § 1322(b)(2) provides that the Chapter 13 plan may modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor’s principal residence. §1123(b)(5) says the same thing for Chapter 11 cases.

a. Debtor’s Principal Residence –
Principal Residence defined U.S.C. 101(13A) The term “debtor’s principal residence”–(A) means a residential structure, including incidental property, without regard to whether that structure is attached to real property; and (B) includes an individual condominium or cooperative unit, a mobile or manufactured home, or trailer.

b. Liens on attached property or curtilage?

c. When is the Principal Use determined?
i. Origination date or petition date?
ii. Is pre-petition “use planning allowed?”

d. “Secured Only By” – Effect of lien on residence as well as upon other assets.
i. Additional security interests in mortgage escrow accounts. A majority of courts have ruled that the grant of a security interest in an escrow fund for insurance and taxes by a Chapter 13 debtor’s second mortgage did not convey additional collateral. The anti-modification provision continues to apply. The debtor retained no interest in the funds once placed in escrow and so any grant of a security interest in such funds was meaningless and conveyed essentially no interest at all. 1st 2nd Mortgage Co. of NJ., Inc. v. Ferandos (In re Ferandos), 402 F.3d 147 (3d Cir. 2005). See also Boehmer v. Essex (In re Boehmer), 240 B.R. 837(Bankr. E.D.Pa. 1999); Rodriguez v. Mellon Bank, N.A. (In re Rodriguez), 218 B.R. 764 (Bankr. E.D. Pa. 1998); In re Abruzzo, 245 B.R. 201 (Bankr. E.D. Pa. 1999), vacated In re Abruzzo, 245 B.R. 2000 U.S. Dist. LEXIS 4936 (E.D. Pa. Apr. 7, 2000), on remand In re Abruzzo, 249 B.R. 78 (Bankr. E.D. Pa. 2000)
ii. Other view: Residential mortgage debt was not one secured “only by a security interest in real property” that was debtor’s principal home, within meaning of anti-modification provision of Chapter 13, where mortgagee had also been granted security interest in escrow for taxes and insurance premiums; mortgagee had additional security interest in escrowed funds, notwithstanding that, on petition date, that interest had not been perfected by delivery. Stewart v. U.S. Bank, 263 B.R. 728 (Bankr.W.D. Pa. 2001).
iii. Secured by additional assets other than the residence; cross collateralization clauses, overly broad security agreement?
1. Fixtures: will a security interest in fixtures destroy §1322 antimodification protection?
2. Mortgage extending mortgagee’s security interest to non-fixture appliances, as well as other personalty, removed mortgagee’s claim from category of claims secured only by residential realty, for purpose of preventing Chapter 13 debtor from modifying mortgagee’s rights. In re Caster, 77 B.R. 8 (Bankr. E.D. Pa. 1987).
iv. Valuation- Under § 506 (a)(1), “value shall be determined in light of the purpose of the valuation and of the proposed disposition or use of such property, and in conjunction with any hearing on such disposition or use or on a plan affecting such creditor’s interest”(emphasis added). If a valuation of the property under §506(a) determines that a junior mortgage holder’s claim is wholly unsecured, then the mortgagee is not in any respect a “holder of a claim secured by the debtor’s residence” and the jr. mortgage holder’s claim may be modified and treated as an unsecured claim.

Date of Valuation –
a. Loan Origination Date or Date of Bankruptcy Petition?

2. Methodology of Valuation. Market value or liquidation value? When a Chapter 11 debtor or a Chapter 13 debtor intends to retain property subject to a lien, the purpose of a valuation under section 506(a) is not to determine the amount the creditor would receive if it hypothetically had to foreclose and sell the collateral. Neither the foreclosure value nor the costs of repossession are to be considered because no foreclosure is intended. . . . The fair market value is not ‘replacement value’ because the house is not being replaced. The fair market value is the price which a willing seller under no compulsion to sell and a willing buyer under no compulsion to buy would agree upon after the property has been exposed to the market for a reasonable time. Taffi v. United States (In re Taffi), 68 F.3d 306, 309 (9th Cir. 1995)

3. Current use or highest-best use? Should not calculate the value of the property on the value such property could demand if it were converted to some other use. The purpose of the valuation is to determine how much the creditor will receive for the debtor’s continued possession . . .. The foreclosure value is not relevant because no foreclosure is intended by the Plan. . . . Consequently, the value has to be the fair market value of what the debtors are using. Taffi v. United States (In re Taffi), 68 F.3d 306, 309 (9th Cir. 1995) Cannot deduct for hypothetical costs of sale – Huntington Nat’l Bank v. Pees (In re McClurkin), 31 F.3d 401 (6th Cir. 1994)
v. When is the Lien Stripped Off? The unsecured junior lien is not stripped off at confirmation. To allow lien strip at confirmation would encourage “mischief” such as the debtor’s post-confirmation sale of the property to an unsuspecting purchaser. Under BAPCPA section 1325(a)(5)(B)(i)(I)(bb), the plan must provide that the claim holder “retain[s] the lien securing such claim until … discharge under section 1328….”
1. The junior lien is deemed satisfied and lien should be discharged or released only upon conclusion of the bankruptcy case. In re Jones, 152 B.R. 155 (Bankr. E.D. Mich. 1993).

2. The right to avoid a lien has not fully matured in a Chapter 13 context until a discharge is granted upon successful completion of the Chapter 13 Plan. Accordingly, the order confirming the Debtors’ plan will specifically provide that the Debtors’ house shall remain property of the estate, and shall not re-vest in the Debtors, until the Debtors are granted a discharge. Castle v. Parrish, 29 B.R. 869, 874 (Bankr. S.D. Ohio 1983)

3. A plan is inconsistent with the provisions of Chapter 13 when it purports to effectuate irrevocable lien avoidance on plan confirmation. In re McMillan 251 B.R. 484, 490 (Bankr.. E.D. Mich.2000)

4. If the Debtor is ineligible to receive a discharge due to prior discharge under 11 U.S.C. 1328(f) then the Debtor may not benefit from the lien stripoff. See In re Akram, 259 B.R. 371, 378-79 (Bankr.C.D.Cal.2001); In re King, 290 B.R. 641, 651(Bankr. C.D. Ill.2003)
vi. Hardship discharge? If the Debtor receives only a “hardship discharge” under 11 U.S.C. 1328(b) is the debtor entitled to the benefit of the lien strip and a discharge of the junior mortgage lien?
1. One line of cases holds that a creditor’s lien may be extinguished pursuant to the debtor’s plan. These cases use the following two lines of reasoning: First, the creditor’s lien is void upon the payment of the allowed secured claim pursuant to 11 U.S.C. § 506(d); and second, where §1322(b)(2) does not prevent a modification to the creditor’s lien rights, any concern about the debtor dismissing his case after the creditor’s lien is released, but prior to full payment under the plan, is outweighed by the policy of affording the debtor a fresh start. See, e.g., Bank One, NA v. Flowers, 183 B.R. 509 (N.D. Ill. 1995); In re Nicewonger, 192 B.R. 886 (Bankr.N.D.Ohio 1996); In re Hernandez, 175 B.R. 962 (N.D. Ill. 1994); In re Wilson, 174 B.R. 215 (Bankr. S.D. Miss. 1994); McDonough v. Plaistow Coop. Bank (In re McDonough), 166 B.R. 9 (Bankr. D. Mass. 1994); In re Cooke, 169 B.R. 662 (Bankr. W.D. Mo.1994); In re Schultz, 153 B.R. 170 (Bankr. S.D. Miss.1993); In re Lee, 156 B.R. 628 (Bankr. D. Minn.1993).

2. Another line of cases holds that a debtor may not obtain a release of a secured creditor’s lien until he successfully completes the confirmed plan and receives a §1328(a) discharge. See, e.g., In re Zakowski, 213 B.R. 1003 (Bankr. E.D. Wis.1997); In re Pruitt, 203 B.R. 134 (Bankr. N.D. Ind. 1996); In re Scheierl, 176 B.R. 498 (Bankr. D. Minn.1995);In re Jordan, 164 B.R.. 89 (Bankr. E.D. Mo.1994); In re Jones, 152 B.R. 155 (Bankr. E.D. Mich.1993); Gibbons v. Opechee Distribs. (In re Gibbons), 164 B.R. 207 (Bankr. D.N.H. 1993).

V. IS AN ADVERSARY PROCEEDING REQUIRED? Chapter 13 debtors may not need to file an adversary proceeding to strip the mortgagee’s lien. One court summarized the cases:
[I]t appears that no adversary proceeding is needed simply to value and declare void a totally unsecured claim. The majority of courts therefore hold that “the appropriate procedure for lien avoidance under Section 506 is by motion because lien avoidance is the inevitable byproduct of valuing a claim, which is accomplished by motion pursuant to Bankruptcy Rule 3012.” In re Sadala, 294 B.R. 180, 183 (Bankr. M.D. Fla. 2003) (collecting cases); see also, In re Millspaugh, 302 B.R. 90 (Bankr. D. Idaho 2003); In re Fisher, 289 B.R. 544 (Bankr. W.D.N.Y. 2003) (court allows proceedings to be prosecuted by motion in the absence of a specific objection by the mortgage holder that the proceeding be converted to an adversary proceeding); but see, e.g., In re Kressler, 252 B.R. 632 (Bankr. E.D. Pa. 2000) (espousing the minority view that an adversary proceeding is required); …Once the value of the secured claim is determined, the attendant lien is stripped off automatically under Section 506(d).” In re Sadala, 294 B.R. 180, 183 (Bankr. M.D. Fla. 2003) In re Robert, 313 B.R. 545, 549 (Bankr. N.D. N.Y. 2004).

These Courts have determined that lien stripping is a valuation issue, not a challenge to the “validity, priority, or extent of a lien” of F.R.B.P. 7001, requiring an adversary proceeding.

a. Courts have considered the “lien-stripping” effect of § 506 in the context of:
i. an adversary proceeding. See, e.g., Gaglia v. First Federal Sav. & Loan Asso., 889 F.2d 1304, 1305 (3d Cir. Pa.1989), overruled by Dewsnup v. Timm, 502 U.S. 410 (U.S. 1992); In re Lindsey, 823 F.2d 189, 191 (7th Cir. Ill. 1987); In re Cobb, 122 B.R. 22, 24(Bankr.E.D. Pa.1990); Bellamy v. Federal Home Loan Mortg. Corp., 122 B.R. 856, 857 (Bankr. D. Conn. 1991), aff’d In re Bellamy, 132 B.R. 810 (D.Conn.1991), aff’d In re Bellamy, 962 F.2d 176 (2d Cir. Conn. 1992); Goins v. Diamond Morttg. Corp., 119 B.R. 156, 157 (Bankr. N.D. Ill.1990); In re Garnett, 88 B.R. 123, 124 (Bankr. W.D. Ky.1988), aff’d United States on behalf of Farmers Home Admin. v. Garnett, 99 B.R. 757 (W.D. Ky. 1989); In re Crouch, 80 B.R. 364, 365 (Bankr. W.D. Va.1987); In re O’Leary, 75 B.R. 881, 882(Bankr. D. Or. 1987);
ii. a motion to avoid a lien. See, e.g., In re Jablonski, 88 B.R. 652, 653 (E.D. Pa. 1988); In re Chavez, 117 B.R. 733, 734 (Bankr. S.D. Fla. 1990); In re Marshall, 111 B.R. 325, 326 (Bankr. D. Mont. 1990); In re Demoff, 109 B.R. 902, 903 (Bankr. N.D. Ind.1989); In re Anderson, 88 B.R. 877, 878 (Bankr. N.D. Ind. 1988), In re Robert, 313 B.R. 545 (Bankr. N.D.N.Y. 2004) and,
iii. in an objection to a proof of claim. See, e.g., In re Jablonski, 88 B.R. 652, 653 (E.D. Pa. 1988); In re Chavez, 117 B.R .733, 734 (Bankr. S.D. Fla. 1990); In re Marshall, 111 B.R. 325, 326 (Bankr. D. Mont. 1990); In re Demoff, 109 B.R. 902, 903 (Bankr. N.D. Ind. 1989); In re Anderson, 88 B.R. 877, 878 (Bankr. N.D. Ind.1988).

b. Eastern District Court of Michigan- The Court has not to date required an adversary proceeding in any published opinion. In the case, In re Jones 152 B.R. 155 (Bankr. E.D. Mich. 1993); the Hon. Arthur Spector held that F.R.Bankr.P. 3012 permits § 506 valuations to be requested by motion, and noted that the advisory committee note relating to that rule distinguishes valuation proceedings from those subject to F.R.Bankr.P. 7001, and ruled that the debtor need not file an adversary proceeding to avoid a creditor’s lien under § 506. In re Hoskins, 262 B.R. 693(Bankr. E.D. Mich. 2001)

c. Western District of Michigan- a junior lien which is totally unsupported by any equity in property may be extinguished through Chapter 13 plan confirmation process, without need for adversary proceeding, as long as language in plan is sufficiently clear to put lienholder on notice of debtor’s intentions) (See also, In re Hoskins, 262 B.R. 693(Bankr. E.D. Mich. 2001)(Judge Spector), In re Fuller 255 B.R. 300, 306 (Bankr. W.D. Mich. 2000); In re Hudson, 260 B.R. 421 (Bankr. W.D. Mich. 2001); see also, In re Calvert, 907 F.2d 1069, 1072 (11th Cir. Ala. 1990);
i. Best Practice- Circuits have not specifically ruled. Debtors may wish to be cautious when deciding whether an adversary proceeding is required. If future appellate court decisions decide that an adversary proceeding is required, the lien strip-off may be subject to collateral attack. Cf. Ruehle v. Educ. Mgmt. Corp. (In re Ruehle), 412 F. 3d 679, 680 (6th Cir. 2005) (student loan discharge in plan void because adversary proceeding required).

VI. EFFECT OF DISMISSAL – A dismissal acts to undo bankruptcy and to restore property rights to the position in which they were found at commencement of case, as far as practicable, given facts of each case. Bankr.Code, 11 U.S.C. § 349(b).
i. Unless the court indicates otherwise, the general effect of an order of dismissal is to “restore the status quo ante; “it is as if the bankruptcy petition had never been filed. France v. Lewis & Coulter, Inc. (In re Lewis & Coulter, Inc.), 159 B.R. 188, 190 (Bankr. W.D. Pa. 1993); Lawson v. Tilem (In re Lawson), 156 B.R. 43, 45 (B.A..P. 9th Cir. Cal. 1993)).
ii. The legislative history of 11 U.S.C. § 349 states: The basic purpose of the subsection is to undo the bankruptcy case, as far as practicable, and to restore all property rights to the position in which they were found at the commencement of the case…. Where there is a question over the scope of the subsection, the court will make the appropriate orders to protect rights acquired in reliance on the bankruptcy case. H.R.Rep. No. 595, 95th Cong., 1st Sess., 338 (1977); 1978 U.S.Code Cong. & Admin.News, 5963, 6294.
iii. 11 U.S.C. § 1325(a)(5)(B)(i)(II) requires a plan to provide that if a Chapter 13 case is “dismissed or converted without completion of the plan,” the lien is retained by the lien holder “to the extent recognized by applicable nonbankruptcy law.”

VII. CREDITOR DEFENSES

a. Mortgage is not a “Junior Lien”
i. Failure to record or properly record a senior mortgage. If junior lienholder lacked notice of the prior lien, consider action to determine whether a “junior lien” has priority.
ii. Defective/invalid liens. If a senior lien has defects that render the security instrument void, consider action to determine lien priority (e.g., acknowledgment, signatures, witnesses, description of the property).
iii. Can junior lienholder compel Ch. 13 Trustee or Debtor to avoid a senior lien, thus preserving Jr. lien? No, because any such senior lien avoided would be preserved to the bankruptcy estate to prevent a junior lienholder from improving his position. 11 U.S.C. § 551

b. Valuation of property supports Junior Lien- Appraisals of property may establish that the property actually is worth more than the amount of the senior lienholder’s secured claim.
1. Claims of senior lienholder may be overstated. In a close case, it may be useful to examine the claim of the senior lienholder for components that may improperly inflate the amount of the claim.

Consider objections to the claim for:
a. Fees and costs incurred after the petition was filed;
b. Property taxes, insurance premiums, or property preservation expenses that were incurred after the petition was filed;
c. Fees and costs that are not authorized to be charged to the borrower under the note and mortgage, unless or until notice to the debtor is given;
d. Unlawful fees and costs;
e. Whether funds in escrow account should be credited.
c. Motions to convert case to chapter 7.
i. See note above, regarding §1325(a)(5)(B)(i)(II) (effect of dismissal or conversion)
ii. General grounds to convert case. Strategic reasons to convert to Chapter 7?
The borrower cannot strip lien in Ch. 7 case. Nobelman v. American Savings Bank, 508 U.S. 324 (U.S. 1993); In re Talbert, 344 F.3d 555 (6th Cir. 2003).

VIII. SETTLEMENT CONSIDERATIONS /CREDITOR CONCEDES THAT LIEN STRIP IS AUTHORIZED- WHAT NEXT?
a. Seek a judgment, plan provision, or order that protect junior lienholder until conclusion of the case.
i. Order should confirm lien is preserved until successful completion of all payments and issuance of § 1328(a) Order of Discharge.
ii. The judgment and the order confirming the plan should state that any property encumbered by liens securing an allowed secured claim shall remain property of the estate until the plan is fully performed.
iii. Seek favorable judgment provisions that protect the junior lienholder until the case is concluded, such as “Future Default” provisions , and provisions requiring maintenance of adequate hazard insurance coverage, and prompt payment of property taxes.

b. Make a close examination of Debtor’s Income and Expenses and file timely objections to under reported income, and unsubstantiated, unreasonable and luxury expenditures, to maximize dividends to unsecured creditors.

c. Consider valid objections to untimely or defective claims of other unsecured creditors to maximize junior lienholder’s pro rata share.

d. Monitor plan payments, prompt payment of property taxes, and maintenance of adequate hazard insurance and seek dismissal in appropriate circumstances.

IX. OTHER EXCEPTIONS:
a. Short Term Mortgages – First Union Mortg. Corp. v. Eubanks (In re Eubanks), 219 B.R. 468 (B.A.P. 6th Cir. 1998) (Section 1322(c)(2) creates a statutory exception to the protection from modification for “short term” home mortgages in Chapter 13 cases; debtor can bifurcate undersecured second mortgage and pay allowable secured portion in full with interest consistent with § 1325(a)(5), while paying unsecured portion with other unsecured claims.)


Home owners should wake up TODAY!
before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender – for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Unjust Enrichment, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

If you find yourself in an unfortunate situation of losing or about to lose your home to wrongful fraudulent foreclosure, and need a complete package that will show you step-by-step litigation solutions helping you challenge these fraudsters and ultimately saving your home from foreclosure either through loan modification or “Pro Se” litigation visit: http://www.fightforeclosure.net

What Homeowners Should Know About Appeals at the 9th Circuit

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The Ninth Circuit uses a limited en banc system for en banc matters because of its size, with 11 judges comprising an en banc panel;

The Chief Judge is always one of the 11 en banc judges;

The Ninth Circuit currently has 29 active judges and 15 judges on senior status;

Active judges are expected to hear 32 days of oral arguments per year;

Judges are assigned to hear cases by rotation, and no preference is given for judges from those jurisdictions;

Oral argument are scheduled on certain dates;

Filings for are currently down 3% compared to last year;

Pro Se filings account for 51% of the documents filed with the court;

The largest category of pro se litigants are prisoners;

48% of all immigration appeals in the US are filed in the Ninth Circuit;

From the entry of the final order of the lower court or agency to final Ninth Circuit disposition: 32.6 months
From the filing of the law brief to oral argument or submission on briefs: 8.7 months in the Ninth Circuit (4.1 months nationally);

The court is permitted to move cases up in priority;

Priority is set by a staff attorney who assigns a number to each case based on a point system: 1, 2, 3, 5, 7, 10, and 24. Cases assigned 1 or 2 go to the screening panel for disposition. Cases assigned 24 always get oral argument, and involve matters like the death penalty. Cases assigned 3, 5, 7, or 10, will depend on the number of parties, the types of issues, etc. These cases may get oral argument, or be submitted on briefs;

The assignment of the panel of judges is separate from assignment of cases;

Panels are set 1 year in advance;

The clerk’s office assigns cases based on a formula that includes priority 99% of petitions for rehearing en banc are rejected – a judge on the court must initiate the process for en banc rehearing, and a judge may do so even if there is no petition for rehearing en banc filed;

If there is a second appeal to the court in the same case, the case is first presented to the original panel to see if they want to decide the second appeal – usually the panel will take back the case in approximately 1/4 to 1/3 of cases – if you want the same panel, file a motion to ask to have the case assigned to the same panel, but give good reasons why;

Generally, most general civil appeals where the parties are represented by attorneys will get set for oral argument – but about 20-25% that are assigned to oral argument will ultimately be submitted on briefs instead.

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender – for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Unjust Enrichment, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

If you find yourself in an unfortunate situation of losing or about to lose your home to wrongful fraudulent foreclosure, and need a complete package that will show you step-by-step litigation solutions helping you challenge these fraudsters and ultimately saving your home from foreclosure either through loan modification or “Pro Se” litigation visit: http://www.fightforeclosure.net

How Homeowners Can Effectively Handle the Mortgage Loan Modification Challenges

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For the past few years, homeowners in foreclosure situations have discovered the ugly protocol involving mortgage loan modification. These series of repeated process between the homeowner and the alleged lender can sometimes lead to frustrations, stress and emotional distress. This post is designed to help homeowners cope with the frustrations of mortgage loan modification protocol.

1) Before agreeing to any more loan applications, write to your lender.  Ask them to stipulate to the following statements in an affidavit form:
“Please stipulate and warrant that you are the owner of the obligation, or have the authority from the owner of the obligation to modify my loan.
If you can not or will not stipulate and warrant that you have the authority to modify my loan within 30 days, then you fully admit that you never had the authority to modify my loan.  You acted not in good faith and are practicing fraud and deceit.

This is an admission that will be used in all future litigation against your company.  You can not represent that you have the ability and authority to modify my loan while hiding the fact that you actually do not have such authority.”

BE SURE TO ASK FOR THE SPECIFIC NAME OF THE PERSON MAKING THE DECISION FOR YOUR LOAN MOD. You can get a deposition from this person if you move in to litigation.

2) Get a Securitization Audit.
If you get a third party expert witness to testify that your loan has been securitized, then present the audit to your servicer.  Ask them pointedly:
“It seems that my loan has been securitized.  Please see the enclosed securitization audit.  If my loan has been securitized, then you no longer own my promissory note.  If this is the case, then I am very confused.  Please explain to me how you have the authority to modify my loan.
Please stipulate and warrant that you are the owner of the obligation, or have the authority from the owner of the obligation to modify my loan.
If you can not or will not stipulate and warrant that you have the authority to modify my loan within 30 days, then you fully admit that you never had the authority to modify my loan.  You acted not in good faith and are practicing fraud and deceit.

This is an admission that will be used in all future litigation against your company.  You can not represent that you have the ability and authority to modify my loan while hiding the fact that you actually do not have such authority.”

3) Sue Your “Lender”
If you can gather enough evidence to prove that:
a) Your servicer has no authority to modify your loan, yet represent that they do.
b) They have acted not in good faith…and have continued to deny your loan mod, time and time again…especially with contradictory statements like “you make too much money” followed by “you make too little money”.
c) Find out from your securitization auditor that you qualify for HAMP but no actual application with HAMP was done with your loan.
d) You were put into a trial payment program…which you pay on time consistently…and are either foreclosed upon, or denied anyway for good measure, then you have a justifiable cause of action.

The title of your action would be asking for a “Permanent Injunction”.  Consult your attorney.  Basically, a permanent injunction is such that your bank can not foreclose on your home until such times as they offer you a sustainable loan modification.  The basis for this injunction is because they represent to you that they have the authority to modify the loan, and go through the motions of giving you a loan modification application.

The principle we want to use here is to prove that the “lender” is not acting in good faith.  We are going to make them eat their words.  In other words, if they represent that they can do a loan modification, but in fact, they can not…then they are guilty of misrepresentation.  Be sure to consult the Fair Debt Collections Practices Act under misrepresentation as another claim in your civil action.

The strategy here is, by suing your “lender”, you are now costing them big money…to the tune of $10,000 to $25,000 just to defend your action against them.  When it starts to hurt them…then they will be more likely to come to the table to deal with you more fairly.  Currently, there is ABSOLUTELY NO REASON for them to give you a loan mod.

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Unjust Enrichment, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

If you find yourself in an unfortunate situation of losing or about to lose your home to wrongful fraudulent foreclosure, and need a complete package that will show you step-by-step litigation solutions helping you challenge these fraudsters and ultimately saving your home from foreclosure either through loan modification or “Pro Se” litigation visit: http://www.fightforeclosure.net

How California Homeowners in Foreclosure Can Move to Vacate Default Judgment

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This post is designed to educate California residents facing foreclosure, as to what they would expect and how to navigate out of the problem.

The Real Estate meltdown that began in late 2007 has resulted in an unprecedented number of loans in default and a substantial upsurge in foreclosures across the country. California continues to be one of the states hardest hit by the foreclosure crisis. Whether representing a borrower struggling to make its mortgage payments or a lender faced with a defaulted loan, it is essential for lawyers to have an understanding of the intricacies of California foreclosure law.

The starting point for this understanding is the statutory framework for nonjudicial foreclosure as well as California’s famous (or perhaps infamous) “one-action rule.”

In California, a lender considering foreclosure may choose one of two avenues—judicial or nonjudicial foreclosure—although sometimes a lender elects to commence a judicial foreclosure and a nonjudicial foreclosure to preserve (for a time) both options. Judicial foreclosure, as the term suggests, begins with the lender filing a complaint against the borrower. As with most litigation, this process can be drawn out and expensive. Nonjudicial foreclosure, on the other hand, is relatively inexpensive and less time-consuming.
A critical distinction between judicial and nonjudicial foreclosure is the lender’s ability to pursue the borrower for a deficiency judgment if the sale price is less than the full amount of the borrower’s obligation.

A deficiency judgment is an option only for lenders who choose judicial foreclosure.  For loans that are nonrecourse by statute or that contain contractual nonrecourse clauses, it generally does not make sense for the lender to foreclosure judicially, because the principal benefit of judicial foreclosure—the possibility of a deficiency judgment—is not available.

Nonjudicial Foreclosure: The remedy of nonjudicial foreclosure is found in a deed of trust. A deed of trust—the preferred instrument in California for securing a borrower’s loan obligations with real property—almost always contains a “power of sale” clause that enables the trustee (typically a title insurance company) to sell the property to satisfy the borrower’s obligations if a default occurs. Given the relative ease with which a nonjudicial foreclosure can be accomplished, most lenders opt for this approach.

The nonjudicial foreclosure rules are statutorily prescribed and require strict compliance. The rules endeavor to strike a balance among the varying interests of lenders, borrowers, other lien claimants, and trustees. Whereas lenders desire a speedy and inexpensive method of recovery, borrowers desire protection against wrongful loss of their property, junior lienholders want to protect their interests, and trustees simply need their responsibilities clearly delineated.

If any step in the foreclosure process violates the nonjudicial foreclosure statute, the validity of the foreclosure sale may be challenged. The borrower may be able to enjoin the sale and recover damages from the lender.
When a borrower defaults on an obligation secured by a deed of trust, the lender sometimes may prefer to restructure or “work out” a loan—for example, by reducing the interest rate and/or required periodic payments, or extending the maturity date. In other cases, the lender may decide that a workout is not realistic or in the lender’s best interest. In such a case, the lender will elect to declare a default, which starts in motion the process for selling the property pursuant to the power-of-sale provision.7 The first step is for the lender to make a demand on the trustee to commence the foreclosure process.

Notice of Default
One of the main components of the statutory scheme is the stringent notice requirements. Upon receipt of the lender’s demand, the trustee initiates a nonjudicial foreclosure by recording a notice of default (NOD) in the county in which the property is located. The purpose of the NOD is to provide notice to the borrower, its successors, junior lienholders, and other interested persons—and notice to the world—that there has been a default. The NOD must identify the name of the borrower, include recording information for the deed of trust or the legal description of the property, specify the type of breach that has occurred and the specific dollar amount due, declare the lender’s election to sell the property, and include the lender’s contact information.

The NOD must also contain a statement notifying the borrower that the default can be cured by payment of the delinquencies within the prescribed reinstatement period. However, if the note grants the lender the right to accelerate payment of the entire debt upon the borrower’s default, the NOD does not need to articulate the lender’s election to accelerate.

The trustee is required to mail a copy of the NOD to the borrower within 10 days of the recordation date and to all persons who have previously recorded a “request for special notice” of any default under the deed oftrust. Within one month after recording theNOD, the trustee also must send a copy of theNOD to any successor of the borrower andany junior lienholders.
Once the NOD is recorded, the foreclosure clock starts ticking. For the three months following recordation of the NOD, the borrower (and any successor), as well as anyjunior lienholder with a recorded lien, each has the opportunity to cure the default and “reinstate” the loan by paying all amounts in default and all reasonable costs and expenses incurred by the lender, including trustee’s and attorney’s fees, but excluding any portion of the principal that would not otherwise be due had the default not occurred. This exclusion allows the borrower to reinstate the loan without paying the entire debt. However, if the default resulted from the borrower’s failure to pay the entire principal balance at the maturity date, reinstatement is not possible.
The borrower, its successor, and any junior lienholder may exercise this reinstatement right beginning on the date of recordation of the NOD until five business days prior to the sale. If the default is cured, the borrower’s obligation is reinstated according to its original terms as if no default had occurred.
Within 21 days following reinstatement, the lender must deliver to the trustee a notice of rescission of the NOD, which withdraws the declaration of default and demand for sale and advises the trustee of the reinstatement.
The trustee must record the notice of rescission within 30 days after the trustee receives the notice and all fees and costs owing to the trustee.
The trustee is required to mail a copy of the NOD to the borrower within 10 days of the recordation date and to all persons who have previously recorded a “request for special notice” of any default under the deed of trust. Within one month after recording the NOD, the trustee also must send a copy of the NOD to any successor of the borrower and any junior lienholders. Once the NOD is recorded, the foreclosure clock starts ticking. For the three months following recordation of the NOD, the borrower (and any successor), as well as any junior lienholder with a recorded lien, each has the opportunity to cure the default and “reinstate” the loan by paying all amounts in default and all reasonable costs and expenses incurred by the lender, including trustee’s and attorney’s fees, but excluding any portion of the principal that would not otherwise be due had the default not occurred. This exclusion allows the borrower to reinstate the loan without paying the entire debt. However, if the default resulted from the borrower’s failure to pay the entire principal balance at the maturity date, reinstatement is not possible.
The borrower, its successor, and any junior lienholder may exercise this reinstatement right beginning on the date of recordation of the NOD until five business days prior to the sale. If the default is cured, the borrower’s obligation is reinstated according to its original terms as if no default had occurred.Within 21 days following reinstatement, the lender must deliver to the trustee a notice of rescission of the NOD, which withdraws the declaration of default and demand for sale and advises the trustee of the reinstatement. The trustee must record the notice of rescission within 30 days after the trustee receives the notice and all fees and costs owing to the trustee.
A minimum of three months must transpire after the NOD is recorded before the
trustee may record a notice of sale (NOS).
The NOS must specify the date, time, and location of the sale and include a description of the property and the deed of trust, the terms of the sale, the trustee’s contact information, the total amount of the unpaid balance of the obligation, and a reasonable estimate of costs incurred by the lender at the time of the initial publication of the NOS.
At least 20 days prior to the sale, the trustee is required to record the NOS, mail
the NOS to the borrower and all persons who requested special notice, post the NOS at the property itself and in one public place in the county in which the property is located standard practice is to post the NOS at a courthouse—and publish the NOS in a newspaper of general circulation in the city in which the property is located. The NOS must be republished once a week for three consecutive weeks.
The sale can be postponed for a number of reasons at any point before a bid has been accepted on the day of the sale. The post-ponement period can last for up to one year from the date of the original sale, after which time a new NOS must be published, posted, mailed, and recorded. Reasons for post-ponement include 1) the borrower and lender mutually agree to postpone the sale, 2) the borrower files for bankruptcy protection, 3) a court enjoins the sale, 4) the lender decides unilaterally to postpone the sale, and 5) the trustee postpones the sale to protect the interests of either the borrower or lender. If the sale is not postponed, it must take place at the location and time specified in the NOS and be open to the public.
Any person, including the borrower and lender, may bid at the sale. The trustee will sell the property by auction to the highest bidder for cash, although the lender is entitled to “credit bid” up to the full amount of the indebtedness. The trustee has the right to require all prospective bidders to show evidence of funds prior to commencing the bidding (usually a cashier’s check in hand).
Upon completion of the sale, a trustee’s deed upon sale is recorded, transferring title to the successful bidder.
One-Action Rule California’s one-action rule provides that there can be but one form of action for the recovery of any debt, or the enforcement of any right, secured by a mortgage upon real property.
The word “one” in one-action rule is used qualitatively and not quantitatively and refers to the rule that the lender’s only option to recover a debt secured by a mortgage or deed of trust upon real property is to foreclose on the collateral securing the debt. It is crucial that a lender be advised of the requirements of the one-action rule, as certain conduct that does not on its face appear to constitute an “action,” such as a bank lender exercising a statutory right of offset against an account held by its borrower, may violate the rule.
The one-action rule has two elements. First, the lender must pursue foreclosure
before taking any other action against the borrower for recovery of the debt.
Second, all the security must be exhausted before the lender sues the borrower directly on the debt.
However, since a deficiency judgment is unavailable in a nonjudicial foreclosure
sale, the lender cannot pursue the borrower for a personal judgment if the sale proceeds from a trustee’s sale are not enough to satisfy the debt. In jurisdictions without such a rule, the borrower can be forced into the untenable position of simultaneously having to defend a personal action on the debt and a foreclosure action on the real property.
The invocation of the one-action rule is at the borrower’s option. When a lender initiates proceedings to collect a personal judgment against the borrower, the borrower can raise the one-action rule as a defense and compel the lender to foreclose and apply the sale proceeds to satisfy the debt.
In the alternative, the borrower can elect not to assert the defense, in which case the lender that has not foreclosed is deemed to have made an election of remedies. The lender can recover a personal judgment against the borrower—but at the price of losing its lien and therefore its right to foreclose on the real property.
The one-action rule is widely misunderstood. Moreover, a violation of the rule can
result in devastating consequences for the lender. Before commencing a foreclosure—whether judicially or nonjudicially—a number of strategic considerations must be evaluated. Foreclosure can be a byzantine process for lenders and borrowers. It is the role of real estate counsel to provide guidance and demystify the complexities of California foreclosure law.

When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Unjust Enrichment, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

If you find yourself in an unfortunate situation of losing or about to lose your home to wrongful fraudulent foreclosure, and need a complete package that will show you step-by-step litigation solutions helping you challenge these fraudsters and ultimately saving your home from foreclosure either through loan modification or “Pro Se” litigation visit: http://www.fightforeclosure.net

How Can Nevada Homeowners Effectively Handle Foreclosure Matters

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Why Is It Impportant For Nevada Homeowners to Protect their Homes?

In Nevada, homeowners must be aware of mortgage loans and foreclosure laws inorder to be few steps aheads of unscrupulous elements that would do whatever it takes to snatch away your home right under your nose.

Why You Need to Know About Nevada Mortgage Loans

When you take out a loan to purchase residential property in Nevada, you typically sign a promissory note and a deed of trust. A promissory note is basically an IOU that contains the promise to repay the loan, as well as the terms for repayment. The deed of trust provides security for the loan that is evidenced by a promissory note.

How Can you Handle the Issues of Missed Payments

If you miss a payment, most loans include a grace period of ten or fifteen days after which time the loan servicer will assess a late fee. (Loan servicers collect and process payments from homeowners, as well as handle loss mitigation applications and foreclosures for defaulted loans.)

The late fee is generally 5% of the overdue payment of principal and interest based on the terms of the note. To find out the late charge amount and grace period for your loan, look at the promissory note that you signed. This information can also be found on your monthly mortgage statement.

What Are Your Option About Missing Quite a Few Payments

If you miss a few mortgage payments, your mortgage servicer will probably send a letter or two reminding you to get caught up, as well as call you to try to collect the payments. Don’t ignore the phone calls and letters. This is a good opportunity to discuss loss mitigation options and attempt to work out an agreement (such as a loan modification, forbearance, or payment plan) so you can avoid foreclosure.

How Can You Handle Pre-Foreclosure Loss Mitigation Review Period

Under the federal Consumer Financial Protection Bureau servicing rules that went into effect January 10, 2014, the mortgage servicer must wait until you are 120 days delinquent on payments before making the first official notice or filing for any nonjudicial or judicial foreclosure. This is to give you sufficient time to explore loss mitigation opportunities. (If a servicer’s sole purpose of providing a notice is to inform you that you are late on your payments and/or explain what your loss mitigation options are, the servicer can deliver the notice within this pre-foreclosure period.)

What About Deed of Trust, What You Need to Know

Nevada deeds of trust often contain a clause that requires the lender to send a notice, commonly called a breach letter or demand letter, informing you that your loan is in default before it can accelerate the loan and proceed with foreclosure. (The acceleration clause in the mortgage permits the lender to demand that the entire balance of the loan be repaid if the borrower defaults on the loan.)

The letter must specify:

  • the default
  • the action required to cure the default
  • a date (usually not less than 30 days from the date the notice is given to the borrower) by which the default must be cured, and
  • that failure to cure the default on or before the date specified in the notice may result in acceleration of the debt and sale of the property.

What Types of Foreclosure Procedures Is there In Nevada

In Nevada, most residential foreclosures are nonjudicial. This means the lender can foreclose without going to court as long as the deed of trust contains a power of sale clause.

What is Notice of Default and Election to Sell

In Nevada, Non-judicial proceedings is used to foreclose most home. The Nevada nonjudicial foreclosure process formally begins when the trustee, a third-party, records a Notice of Default and Election to Sell (NOD) in the office of the recorder in the county where the property is located, providing three months to cure the default.

A copy of the NOD must be sent to each person who has a recorded request for a copy and each person with an interest or claimed interest in the property by registered or certified mail within ten days after the NOD is recorded recordation.

What Are the Requirements for Posting NOD?

If a residential foreclosure, a copy of the NOD must be posted in a conspicuous place on the property 100 days before the date of sale.

Are there Any Affidavit Required

The trustee or beneficiary (lender) must record a notarized affidavit along with the NOD that states, based on a review of business records, including all of the following information.

  • The full name and business address of the current trustee or the current trustee’s personal representative or assignee, the current holder of the note secured by the deed of trust, the current beneficiary of record and the current servicer of the obligation or debt secured by the deed of trust.
  • That the beneficiary under the deed of trust, the successor in interest of the beneficiary or the trustee is in actual or constructive possession of the note secured by the deed of trust; or that the beneficiary or its successor in interest or the trustee is entitled to enforce the obligation or debt secured by the deed of trust.
  • That the beneficiary or its successor in interest, the servicer of the obligation or debt secured by the deed of trust or the trustee, or an attorney representing any of those persons, has sent to the borrower a written statement including the amount needed to cure the default, the principal amount of the debt, the accrued interest and late charges, a good faith estimate of all fees, contact information for obtaining the most current amounts due, and each assignee of the deed of trust.

What Other Alternatives Do I Have to Stop the Foreclosure?

You have 3 alternatives, sometimes 4.

Your alternatives are:

1). Try to call your alleged lender to see if you can get a reasonable person on the phone. Don’t panic, just be prepared as over 90% of the people you speak to on the phone are programmed to act certain way.i.e, if you are lucky as 99.9% you’ll get a recording and will have to leave a message, unfortunately, you have less that 20% of getting a call back response. You’ll know very early that the alleged lender, definitely not with your best interest at heart.

2). Nevada law requires that borrowers who are in foreclosure be given the option to participate in mediation if the property is owner-occupied.

The trustee must mail to the borrower (by registered or certified mail, return receipt requested) an Election to Mediate Form no later than ten days after recording the NOD. If the borrower wants to elect mediation, the form must be completed and returned within 30 days.

3). You can commence litigation to immediately stop the foreclosure, but you have to be prepared to whether the stop as you’ll experience various emotions during the litigation proceedings, but with time, you’ll get used to it.

3) Bamkruptcy is another method to stop foreclosure, but it will not be in your best interest if you just found yourself in foreclosure situation. We recommend Bankruptcy as the last resort and this is why?

If you are a homeowner with a mortgage payment, say like $1000/mth. If you have missed payment that is 1 year or more. Your Chapter 13 bankrupcty payments will be difficult for you to make once in bankrupcty because you will still make the Normal monthly payment and then some portion of the missed payments, which is sometimes, nealy half of the monthly payment. So if you make a payment of $1000 before the foreclosure began, you’ll now have to make ($1500 (Regular + Potion Payments) to catch up. So you ask yourself, if you can’t afford the original payment of $1000, before you went into foreclosure, how can you afford the higher payments.

In Nevada, You Have What is called Danger Notice

At least 60 days prior to the date of the sale, the trustee must provide the borrower(s) with a separate “Danger Notice” stating that they are in danger of losing their home to foreclosure, along with a copy of the original promissory note.

The notice must be:

  • personally served to the borrower
  • left with a person of suitable age and discretion (if the borrower is not available) and a copy mailed, or
  • if a person of suitable age and discretion is not available, then the notice may be posted in a conspicuous place on the property, left with a person residing in the property, and then mailed to the borrower.

What do you need to know about Notice of Sale

After expiration of the three-month period following the recording of the NOD, the trustee must give notice of the time and place of the sale by recording the notice of sale and by:

  • Providing the notice of sale to each required party by personal service or by mailing the notice by registered or certified mail to the last known address 20 days before sale.
  • Posting the notice of sale on the property 15 days before the sale.
  • Posting the notice of sale for 20 days successively in a public place in the county where the property is situated and on the property 15 days before sale.
  • Publishing a copy of the notice of sale three times, once each week for three consecutive weeks, in a newspaper of general circulation in the county where the property is situated.

Notice to Tenants

If the property is tenant occupied, a separate notice must be posted in a conspicuous place on the property and mailed to the tenant no later than three business days after the notice of sale is given.

Reinstatement Before Sale

In the case of owner-occupied housing, the borrower gets a right to reinstate by paying the arrearage, costs, and fees. This right expires 5 days prior to the date of the foreclosure sale.

The Foreclosure Sale

The foreclosure sale must be between the hours of 9:00 a.m. and 5:00 p.m. All sales of real property must be made:

  • at the courthouse in the county in which the property or some part thereof is situated (in counties with a population of less than 100,000), or
  • at the public location in the county designated by the governing body of the county for that purpose (in counties with a population of 100,000 or more).

The property will be:

  • sold to the highest third-party bidder or
  • revert to the foreclosing lender and become REO

Deficiency Judgment Following Sale

When a lender forecloses on a mortgage, the total debt owed by the borrower to the lender frequently exceeds the foreclosure sale price. The difference between the sale price and the total debt is called a “deficiency.” In some states, the lender can seek a personal judgment against the debtor to recover the deficiency. Generally, once the lender gets a deficiency judgment, the lender may collect this amount from the borrower.

In Nevada, a lender may obtain a deficiency judgment following foreclosure, but the amount of the judgment is limited to the lesser of:

  • the difference between the total debt and fair market value of the home, or
  • the difference between the total debt and foreclosure sale price.

For loans taken out after October 1, 2009, deficiencies are prohibited for purchase money loans (that have not been refinanced) held by a bank or other financial institution for single-family residences occupied continuously by the borrowers.

Redemption Period

A redemption period is the legal right of any mortgage borrower in foreclosure to pay off the total debt, including the principal balance, plus certain additional costs and interest, in order to reclaim the property. In Nevada, there is no redemption period following a nonjudicial foreclosure sale.

Eviction Following Foreclosure

If you don’t vacate the property following the foreclosure sale, the new owner will likely:

  • offer you a cash-for-keys deal (where the new owner offers you money in exchange for you agreeing to move out), or
  • give you a three-day notice to quit (leave) before filing an eviction lawsuit.

To learn more about foreclosure in general, ways to defend against foreclosure, and programs to help struggling homeowners avoid foreclosure

When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Unjust Enrichment, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

If you find yourself in an unfortunate situation of losing or about to lose your home to wrongful fraudulent foreclosure, and need a complete package that will show you step-by-step litigation solutions helping you challenge these fraudsters and ultimately saving your home from foreclosure either through loan modification or “Pro Se” litigation visit: http://www.fightforeclosure.net

What 5th Circuit Homeowners Must Know About Stay Injunction During Appeal Procedings

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If a party pursuing a collateral order appeal wants a stay of the trial court proceeding pending resolution of the attempted appeal, it must move for such order. Federal Rule of Appellate Procedure 8 governs motions for stay or injunctions while an appeal is pending. FED. R. APP. P. 8(a)(1)(C).

Rule 8 provides that a party must ordinarily move first in the district court for a stay of the order of a district court pending appeal or for an “order suspending, modifying, restoring, or granting an injunction” while an appeal is pending. FED. R. APP. P. 8(a)(1)(A), (C).

1. Contents and requirements of Motion for Stay filed in the Fifth Circuit

A party may bypass the district court and move for that relief in the court of appeals in the first instance by filing a motion showing that “moving first in the district court would be impracticable.” FED. R. APP. P. 8(a)(2)(A)(i).
If a party unsuccessfully sought a stay from the trial court, that party may seek a stay from the court of appeals by filing a motion stating that “a motion having been made, the district court denied the motion or failed to afford the relief requested and state any reasons given by the district court for its action.” FED. R. APP. P. 8(a)(2)(A)(ii).
Under either scenario—whether a stay was or was not sought in the district court in the first instance—any motion for stay in the court of appeals must also include:

(i) the reasons for granting the relief requested
and the facts relied on;
(ii) originals or copies of affidavits or other
sworn statements supporting facts subject to
dispute; and
(iii) relevant parts of the record.

FED. R. APP. P. 8(a)(2)(B); see also FED. R. APP. P. 18(a)(2)(B) (governing stays pending review of agency decision or order).
The Federal Rules of Appellate Procedure also require that the moving party give reasonable notice of the motion to all parties, including when, where, and to whom the application for stay or injunction is to be presented. FED. R. APP. P. 8(a)(2)(C). An original and three copies of the motion and supporting papers, together with a certificate of service, should be filed with the circuit clerk of the court of appeals. The motion does not need a cover, but must be securely bound so as to not obscure the text and so that it will lie reasonably flat when open.
There is no separate filing fee for filing a motion for stay or injunction in the court of appeals, but all required fees must have been paid in the underlying action before the court of appeals will act on the motion. Counsel should generally consult FED. R. APP. P. 27(a) and (d), 5TH CIR. R. 27.4, and the Internal Operating Procedure following 5TH CIR. R. 27.5 (which was effective December 1, 2002) concerning the requirements and format for motions. In particular, counsel should note that all motions should indicate whether they are opposed or not.
And, because a motion for stay or injunction is not merely a “procedural motion,” it must contain a certificate of interested persons. See 5TH CIR. R. 27.4.

The Fifth Circuit Internal Operating Procedures now clarify a gap in that existed in the rules until a few years ago regarding the lack of a regulation of the font size for motions. The Internal Operating Procedure following 5TH CIR. R. 27.5 makes clear that motions must comply with the typeface and type style requirements of FED. R. APP. P. 32(a)(5) and (6), which means that motions must be in no smaller than 14 point proportional typeface (or not more than 10½ characters per inch in monospaced typeface). The length of motions is limited to 20 pages, exclusive of the corporate disclosure statement (in the Fifth Circuit, the certificate of interested persons) and any accompanying documents authorized by Rule
27(a)(2)(B) and, in the specific context of a motion for stay or injunction, by Rule 8(a)(2)(B). FED. R. APP. P. 27(d)(2).

2. Response to Motion for Stay

Federal Rule of Appellate Procedure 8 governing motions for stay is silent concerning responses and replies. The general rule concerning motions provides that any party may file a response in opposition to a motion “within 10 days after service of the motion unless the court shortens or extends the time.” FED. R. APP. P. 27(a)(3)(A). In computing your response time, counsel should note that the computation-of-time rule in the Federal Rules of Appellate Procedure was recently amended (effective December 1 , 2013) and now provides that if the time for taking an action under the Federal Rules of Appellate Procedure is less than 11 days, then intervening Saturdays, Sundays, and legal holidays are excluded, unless the time period specifies that it is stated in calendar days. FED. R. APP. P. 26(a)(2).
Because the court may act on motions authorized by Rule 8 (for stay or injunction) in fewer than 10 days by giving reasonable notice that it intends to act sooner, if a party intends to respond to a motion for stay or injunction, it is a good idea to notify the clerk’s office as soon as possible and to transmit your response to the clerk’s office by overnight delivery as soon as it is ready. All responses received by the clerk before action on the motion are presented to the court for consideration.
As a general rule, the Fifth Circuit no longer sends a letter to the parties advising them that the court has received and filed a motion and identifying the deadline to file any response. The Fifth Circuit’s website advises of this change in its internal operating procedures and suggests that counsel register for the Fifth Circuit’s event notification service on its website to get notice right away of the filing any motions.
Any response is limited to 20 pages and, like the motion, must comply with the typeface and type style requirements of FED. R. APP. P. 32(a)(5) and (6). FED. R. APP. P. 27(d)(2); I.O.P. following 5TH CIR. R. 27.5

3. Reply
Although FED. R. APP. P. 27(a)(4) permits a reply to a response within 5 days after service of the response, the Fifth Circuit’s website warns that the court looks upon replies with great disfavor.
Not surprisingly, then, the court does not—as a general rule—grant extensions of time to file a reply to a response. Any reply is limited to 10 pages. FED. R. APP. P. 27(d)(2).

4. Internal processing A motion for stay filed in the court of appeals normally will be considered by a panel of the court.
FED. R. APP. P. 8(a)(1)(D). “But in an exceptional case in which time requirements make that procedure impracticable, the motion may be made to and considered by a single judge.” FED. R. APP. P. 8(a)(1)(D). If the motion is an emergency motion, the clerk’s office immediately assigns the motion to the next administrative judge in rotation on the court’s administrative log and simultaneously sends copies of the motion to the other panel members.
Motions are ordinarily considered without oral argument. FED. R. APP. P. 27(e).
The court of appeals may condition relief on a party’s filing a bond or other appropriate security in the district court. FED. R. APP. P. 8(a)(1)(E).

5. Appellate court jurisdiction to rule on a motion for stay or injunction Practitioners should note that neither a motion for stay nor a motion for injunction transfer jurisdiction to the appellate court. For the court of appeals to have jurisdiction to consider a motion for stay or for injunction, the court of appeals’ jurisdiction must first be properly invoked by the filing of a notice of appeal, in the case of a collateral-order appeal or section 1292(a)(1) appeal for example, or by the pendency of an original proceeding or a petition for permission to appeal. The motion for stay can be filed concurrent with a document invoking the appellate court’s jurisdiction, but it cannot precede the invocation of the appellate court’s
jurisdiction.

6. Reconsideration
A party aggrieved by the court’s ruling on a motion may file a “motion for reconsideration,” (not a motion or petition for “rehearing”). A motion for reconsideration of action on a motion must be filed within 14 days (unless the United States is a party in a civil case, see 5TH CIR. R. 27.1). Counsel should note that a motion for reconsideration must be physically received by the clerk’s office by the deadline; the mailbox rule does not apply to motions. Reconsideration requests are limited to 15 pages.

When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Unjust Enrichment, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

If you find yourself in an unfortunate situation of losing or about to lose your home to wrongful fraudulent foreclosure, and need a complete package that will show you step-by-step litigation solutions helping you challenge these fraudsters and ultimately saving your home from foreclosure either through loan modification or “Pro Se” litigation visit: http://www.fightforeclosure.net

Why Homeowners Must Time Correctly Before Appealing Adverse Decisions

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CASE STUDY: 989 F.2d 1074

Effective Foreclosure Defense requires timing. If you time correctly, you can save your home. Homeowners presently in litigation must time correctly when appealling adverse ruling to avoid conflict of Jurisdiction. This case shows how wrong timing before filing a Notice of Appeal resulted to Dismissal of Appeal for Lack of Jurisdiction.

989 F.2d 1074

25 Fed.R.Serv.3d 62

Don Byron REILLY; Mary Lou Reilly, Plaintiffs-Appellants,
v.
Bruce HUSSEY, Attorney; Robert J. Phillips, Attorney;
Federal Land Bank of Spokane, Defendants-Appellees.

No. 91-35903.

United States Court of Appeals,
Ninth Circuit.

Argued and Submitted Nov. 2, 1992.
Decided March 23, 1993.

Don Byron Reilly and Mary Lou Reilly, pro se.

W. Arthur Graham, Cent. Coast Farm Credit, Arroyo Grande, CA, for defendants-appellees.

Appeal from the United States District Court for the District of Montana.

Before: WRIGHT, HUG, and POOLE, Circuit Judges.

EUGENE A. WRIGHT, Circuit Judge:

The Reillys appeal pro se the district court’s order dismissing their adversary complaint. Because their notice of appeal was filed while a motion for rehearing was pending in the district court, we lack jurisdiction to hear their appeal.

FACTS AND PROCEDURAL HISTORY

2 In February 1977, the Reillys negotiated a loan from the Federal Land Bank of Spokane and gave as security a deed of trust to a ten-acre tract of land in Ravalli County, Montana. By February 1986, the Reillys were in default on the loan, having missed two annual payments, and had failed to pay real property taxes. The Bank initiated foreclosure proceedings.
3 The Reillys first attempted to avoid foreclosure by filing a Chapter 11 petition in the U.S. Bankruptcy Court, District of Montana, in January 1986. The court lifted the automatic stay so that the Bank could continue with pending foreclosure proceedings in Montana state court. The property was sold at a nonjudicial foreclosure sale in March 1987. The Reillys’ appeal to the Bankruptcy Appellate Panel for the Ninth Circuit was dismissed as moot.
4 In February 1987, while that appeal was pending, the Reillys sought to prevent foreclosure by filing an adversary proceeding in the bankruptcy court. They sought to void the deed of trust on the ground that the legal description was erroneous. The court dismissed their complaint, finding the deed valid under Montana law and not voidable under the Bankruptcy Code. The Reillys appealed to the U.S. District Court, District of Montana, which dismissed the appeal with prejudice.
5 In June 1988, on a creditor’s motion, the bankruptcy court converted the Reillys’ bankruptcy to a Chapter 7 proceeding. The Reillys appealed. Following the conversion, the bankruptcy court modified its order lifting the automatic stay to allow the Bank to continue an unlawful detainer action in state court. That court found the Reillys guilty of unlawful detainer and issued an order of ejectment. In October 1989, the BAP affirmed the conversion. Five weeks later, the Montana Supreme Court dismissed the Reillys’ appeal of their ejectment, finding that the issues raised were based solely on federal bankruptcy law and had already been decided in the federal proceedings.
6 In May 1989, the Reillys filed a second adversary complaint in the bankruptcy court, which is the basis of this appeal. The Reillys again complained, among other things, that the original order lifting the stay was improper. The bankruptcy court granted the Bank’s motion to dismiss the complaint.
7 The Reillys appealed. In March 1991, they filed an amended brief in which they argued, apparently for the first time, that because Judge Peterson failed to disqualify himself at the outset, all decisions of the bankruptcy court should be set aside.1 On June 4, 1991, the district court affirmed the bankruptcy court on all issues. First, the court held that the Reillys were barred by res judicata and collateral estoppel from challenging the order lifting the stay. Second, they failed to state a claim for relief under the Agricultural Credit Act of 1987 because the Act confers no private right of action. Third, res judicata barred their challenge to the validity of the deed of trust. The district court did not rule on whether Judge Peterson should have been disqualified.
8 Having suffered yet another adverse decision, the Reillys sought a hearing before us. The fate of their appeal is determined by the timing of their filings following the district court order. On June 14, 1991, they filed in the district court a motion to reconsider. On July 3, 1991, while their motion to reconsider was pending, they filed a notice of appeal. On July 29, 1991, the district court entered an order denying the motion to reconsider.
 JURISDICTION
9 We have jurisdiction to hear appeals from bankruptcy proceedings in which the district court or bankruptcy panel exercises appellate jurisdiction. 28 U.S.C. § 158(d). Such appeals are governed by the Federal Rules of Appellate Procedure, as amended in 1989. Fed.R.App.P. 6.
10 Rule 4(a)(4) of the Federal Rules of Appellate Procedure provides that a notice of appeal filed before the disposition of a post-trial motion “shall have no effect.” However, Rule 4(a)(4) does not apply in bankruptcy proceedings in which the district court or bankruptcy panel exercises appellate jurisdiction. Fed.R.App.P. 6(b)(1)(i). In contrast, Bankruptcy Rule 8015, which governs motions for rehearing2 by the district court or the bankruptcy appellate panel, is silent on the effect of appeals filed before a motion for rehearing is decided. See Bankr.Rule 8015, 11 U.S.C.A. (West Supp.1992). Rule 6(b)(2)(i) provides that, if a timely motion for rehearing is filed under Rule 8015, the time for appeal to the court of appeals runs from the entry of the order denying the rehearing.

11 The Advisory Committee on Appellate Rules deliberately omitted any provision regarding the effect of an appeal filed before the entry of an order denying a rehearing because it wished to “leave undisturbed the current state of law in that area.” Fed.R.App.P. 6, Advisory Committee Notes, 1989 Amendment, subdivision (b)(2). At the time of the amendment, this circuit had held that a notice of appeal in a bankruptcy case is null if it was filed while a motion for rehearing was pending in the district court. In re Stringer, 847 F.2d 549, 550 (9th Cir.1988). That holding is left undisturbed by the 1989 amendment of Fed.R.App.R. 6, and we reaffirm Stringer in this context.

12 In their zeal to pursue all possible avenues of review, the Reillys filed a notice of appeal while their motion for reconsideration was pending before the district court. Their notice of appeal was premature and a nullity: “[I]t is as if no notice of appeal were filed at all. And if no notice of appeal is filed at all, the Court of Appeals lacks jurisdiction to act.” Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 61, 103 S.Ct. 400, 403, 74 L.Ed.2d 225 (1982) (per curiam). Because the Reillys failed to file a notice of appeal after the district court denied their motion for reconsideration, we are without jurisdiction to hear their appeal.
13 Our holding does not deprive the Reillys of an opportunity to be heard. They have had their day in court; indeed they have had their days in many different courts. Clearly, they continue to feel aggrieved; but just as clearly, an unfavorable decision does not necessarily mean that a court has failed to fairly consider their arguments.
14 This appeal is dismissed for lack of jurisdiction.
15 DISMISSED.
1Bankruptcy Judge John L. Peterson presided over the chapter 11 proceedings and both adversary proceedings in the bankruptcy court. In June 1986, in the original bankruptcy hearing, Judge Peterson advised the parties of his wife’s minority stock interest in a creditor of the bankruptcy estate. He gave the parties the option of signing a remittal of disqualification or waiting for another bankruptcy judge. Both parties voluntarily signed the remittal

Under 28 U.S.C. § 455(e), a judge is not allowed to “accept from the parties to a proceeding a waiver of any ground for disqualification” based on the financial interest of the judge’s spouse. The Reillys did not seek review of the disqualification issue, however, until some five years and numerous proceedings later. While § 455 contains no explicit timeliness requirement, we have required that a motion to disqualify or recuse a judge under this section must be made in a timely fashion. Molina v. Rison, 886 F.2d 1124, 1131 (9th Cir.1989).

Moreover, in August 1990, while the present action was pending in district court, the Reillys filed a complaint with the Judicial Council of the Ninth Circuit alleging misconduct by Judge Peterson. We issued an order concluding that “[i]f the judge’s failure to recuse himself, despite the parties’ remittal, was conduct prejudicial to the effective and efficient administration of the business of the courts, appropriate and corrective action has been taken and this complaint therefore should be closed.” In re Charge of Judicial Misconduct, No. 90-80054, at 4 (9th Cir. Jan. 11, 1991).

2The Reillys filed a motion for “reconsideration.” The terms “rehearing” and “reconsideration” are used interchangeably. See In re Shah, 859 F.2d 1463, 1464 (10th Cir.1988); In the Matter of X-Cel, Inc., 823 F.2d 192, 194 (7th Cir.1987)

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What Homeowners Must Know About Jurisprudential Exceptions to the Final Judgment

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Manu Homeowners in foreclosure litigations are confused as to what Court Orders should or should not be appealled. This post is designed to help clear those confusions as to what is appealable.

The primary gatekeeper at the door to the federal courts of appeals is the rule that only final judgments are appealable. The final judgment rule has performed this role well, for the most part. In certain cases, however, a trial court’s error on an interlocutory issue is effectively unreviewable on appeal from a final judgment. To deal with this type of injustice, the courts and Congress have created a patchwork of exceptions to the final judgment rule.

A. Collateral Order Doctrine:

The collateral order doctrine is sometimes called the Cohen collateral order doctrine, named for the landmark United States Supreme Court decision, Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949). When we talk about an order being final and appealable under the collateral order doctrine, we are still talking about an order that is appealable under section 1291.
The general rule is that “a party is entitled to a single appeal, to be deferred until final judgment has been entered, in which claims of district court error at any stage of the litigation can be ventilated.” Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863 (1994). Accordingly, as noted in the preceding section, a decision is ordinarily considered final and appealable under section 1291 only if it “ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” Catlin v. United States, 324 U.S. 229, 233 (1945); see Digital Equip., 511 U.S. at 863 (quoting Catlin). The Supreme Court has recognized, however, “a narrow class of collateral orders which do not meet this definition of finality, but which are nevertheless immediately appealable under § 1291.” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 712 (1996). “Since Cohen, [the Supreme Court has] had many opportunities to revisit and refine the collateral-order exception to the final-judgment rule.” Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 276 (1988).

1. Three-prong test for the collateral order doctrine.

The Supreme Court has articulated a threeprong test to determine whether an order that does not finally resolve litigation is nonetheless appealable under section 1291. See Coopers & Lybrand v. Livesay, 437 U.S. 463, 468 (1978).
First, the order must “conclusively determine the disputed question.” Id. Second, the order must “resolve an important issue completely separate from the merits of the action.” Id. Third and finally, the order must be “effectively unreviewable on appeal from a final judgment.” Richardson-Merrell Inc. v. Koller, 472 U.S. 424, 431 (quoting Coopers & Lybrand, 437 U.S. at 468); accord Cunningham v. Hamilton County, 527 U.S. 198, 202 (1999) (“[C]ertain orders may be appealed, notwithstanding the absence of final judgment, but only when they ‘are conclusive, . . . resolve important questions separate from the merits, and . . . are effectively unreviewable on appeal from the final judgment in the underlying action.’” (quoting Swint v. Chambers County Comm’n, 514 U.S. 35, 42 (1995))); see also Doleac ex rel. Doleac v. Michalson, 264 F.3d 470, 490-91 (5th Cir. 2001) (restating the Cohen test as a four-step analysis: the decision (1) cannot be tentative, informal, or incomplete; (2) must deal with claims of right separable from, and collateral to, rights asserted in the action; (3) must be effectively unreviewable on the appeal from final judgment; and (4) must involve an issue too important to be denied review).

Under the first prong—that the order conclusively determine the disputed question—the Supreme Court has observed that there are two kinds of nonfinal orders: those that are “inherently tentative,” and those that, although technically amendable, are “made with the expectation that they will be the final word on the subject addressed.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 12 n.14 (1983). The latter category of orders meets the first prong of the collateral order doctrine.
Under the second prong—that the issue be separate from the merits—the Court has described it as a “distillation of the principle that there should not be piecemeal review of ‘steps towards final judgment in which they will merge.’” Moses H. Cone, 460 U.S. at 12 n.13 (quoting Cohen, 337 U.S. at 546). A classic case meeting the third p r o n g of the c o l l a t e r a l o r d e r doctrine—unreviewable on appeal from a final judgment—are denials of immunity from suit. As the Fifth Circuit explained in a recent case involving an appeal from a district court order denying a sheriff’s motion for summary judgment in an “official capacity” suit,

Official-capacity suits, in contrast [to
personal-capacity suits], ‘generally
represent only another way of pleading
an action against an entity of which an
officer is an agent.’” . . . [T]he plea
[here] ranks as a ‘mere defense to
liability’” [rather than immunity from
suit]. Because an erroneous ruling on
liability may be reviewed effectively on
appeal from final judgment, the order
denying the Sheriff’s summary
judgment motion in this “official
capacity” suit was not an appealable
collateral order.

Burge v. Parish of St. Tammany, 187 F.3d 452, 476-77 (5th Cir. 1999) (citations omitted); see Cunningham, 527 U.S. at 202. As its stringent requirements indicate, the collateral order doctrine is not to be applied liberally. “Rather, the doctrine “is ‘extraordinarily limited’ in its application.” Pan E. Exploration Co. v. Hufo Oils, 798 F.2d 837, 839 (5th Cir. 1986). Moreover, appealability under the collateral order doctrine must be determined “without regard to the chance that the litigation might be speeded, or a ‘particular injustice’ averted by a prompt appellate court decision.” Digital Equip., 511 U.S. at 868.

2. Examples of orders appealable under the collateral order doctrine.

A. Orders denying claims of immunity from suit asserted in a motion to dismiss or motion for summary judgment when the order is based on a conclusion of law:

  • Qualified immunity. Swint, 514 U.S. at 42 (citing Mitchell v. Forsyth, 472 U.S. 511, 526 (1985)); Gentry v. Lowndes County, 337 F.3d 481, 484 (5th Cir. 2003); Martinez v. Tex. Dep’t of Crim. Justice, 300 F.3d 567, 576 (5th Cir. 2002).
  • Immunity under the Foreign Sovereign Immunities Act. Byrd v. Corporacion Forestal y Industrial de Olancho S.A., 182 F.3d 380, 385 (5th Cir. 1999); Stena Rederi A.B. v. Comision de Contratos, 923 F.2d 380, 385-86 (5th Cir. 1991).
  • Absolute immunity. Swint, 514 U.S. at 42 (citing Mitchell, 472 U.S. at 526, and Nixon v. Fitzgerald, 457 U.S. 731 (1982)).
  • Eleventh Amendment immunity. Puerto Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139 (1993); Martinez v. Tex. Dep’t of Crim. Justice, 300 F.3d 567, 573 (5th Cir. 2002); Reickenbacker v. Foster, 274 F.3d 974, 976 (5th Cir. 2001); see also Sherwinski v. Peterson, 98 F.3d 849, 851 (5th Cir. 1996) (denial of state’s motion to dismiss is appealable even if the district court’s order is not based on an express finding of no immunity if the end result is the same).
  • Refusal to rule on a claim of immunity from suit. Helton v. Clements, 787 F.2d 1016, 1017 (5th Cir. 1986).
  • Successive appeal of denial of qualified immunity defense. Behrens v. Pelletier, 516 U.S. 299 (1996) (holding that there can be two interlocutory appeals under the collateral order doctrine of denials of qualified immunity defenses in the same case: one appeal from the denial of a motion to dismiss, and a second appeal from the denial of a motion for summary judgment).
  •  B. Abstention-based stay, dismissal, and remand orders:
  • Under Colorado River abstention. Moses H. Cone, 460 U.S. at 9 (abstention-based stay order).
  • Under Burford abstention. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 712 (1996) (abstention-based remand order).
  • Under Pullman abstention. Moses H. Cone, 460 U.S. at 9 & n.8 (citing Idlewild Liquor Corp. v. Epstein, 370 U.S. 713, 715 (1962)).

A district court order abstaining may take the form of an abstention-based stay order or an abstentionbased remand order. The Supreme Court addressed the appealability of abstention-based remand orders in Quackenbush. Most “remand” orders—those remanding removed cases back to state court for lack of subject-matter jurisdiction—are not reviewable by appeal or otherwise because of the bar to appellate review embodied in 28 U.S.C. § 1447(d). See Quackenbush, 517 U.S. at 714. If, on the other hand, a district court remands a case to state court for a reason other than lack of subject-matter jurisdiction, for example, in the interest of docket congestion, the bar to review in section 1447(d) does not apply, and the decision is reviewable. Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 352-53 (1976).

C. Pre-remand decisions made by a district court if that decision is “separable” from the remand order and independently reviewable through a mechanism such as the collateral order doctrine.

  • Dahiya v. Talmidge Int’l, Ltd., No. 02-31068, 2004 WL 1098838 (5th Cir. May 18, 2004) (citing City of Waco v. United States Fid. & Guar. Co., 293 U.S. 140 (1934); Heaton v. Monogram Credit Card Bank, 297 F.3d 416, 421 (5th Cir. 2002); Doleac ex rel. Doleac v. Michalson, 264 F.3d 470, 486 (5th Cir. 2001); Arnold v. State Farm Fire & Cas. Co., 277 F.3d 772, 776 (5th Cir. 2001); Linton v. Airbus Industrie, 30 F.3d 592, 597 (5th Cir. 1994); Angelides v. Baylor Coll. of Med., 117 F.3d 833, 837 (5th Cir. 1997)); Soley v. First Nat’l Bank, 923 F.2d 406, 410 (5th Cir. 1991); see also In re Benjamin Moore & Co., 318 F.3d 626 (5th Cir. 2002) (addressing the separable order doctrine to determine if collateral order doctrine conferred jurisdiction on the court to review the order of remand in a mandamus proceeding).

D. Order denying motions to intervene. Edward v. City of Houston, 78 F.3d 983, 992 (5th Cir. 1996) (en banc). But see Stringfellow v. Concerned Neighbors in Action, 480 U.S. 370 (1987) (order granting motion to intervene but conditioning or restricting it is not immediately appealable; appeal must await final judgment).

E. Order deciding that plaintiff is not required to post security for payment of costs. Cohen, 337 U.S. at 547.

F. Order denying appointment of counsel to litigants who cannot afford counsel. Robbins v. Maggio, 750 F.2d 405 (5th Cir. 1985).

G. Order remanding action to state court pursuant to a contract between the parties. McDermott Int’l, Inc. v. Lloyds Underwriters, 944 F.2d
1199 (5th Cir. 1991).

H. Discovery orders directed to third parties. Church of Scientology v. United States, 506 U.S. 9, 18 n.11 (1992) (Although discovery orders are normally reviewed by mandamus or on appeal from a contempt order, “A discovery order directed at a disinterested third party is treated as an immediately appealable final order because the third party presumably lacks a sufficient stake in the proceeding to risk contempt by refusing compliance.”).

I. Pre-contempt appeals by the President of the United States to avoid unnecessary constitutional confrontations between two coordinate branches of government. See United States v. Nixon, 418 U.S. 683 (1974). (Watch out for the United States Supreme Court’s decision in Cheney v. United States District Court (No. 03-475), in which one of the issues before the Supreme Court is “whether the court of appeals had mandamus or appellate jurisdiction to review the district court’s unprecedented discovery orders in this litigation” that, unlike United States v. Nixon, accepted a claim of executive privilege? Cheney v. United States Dist. Court, 124 S. Ct. 1391 (2004) (denying motion to recuse); see Cheney v. United States Dist. Court, 124 S. Ct. 958 (2003) (No. 03-475) (granting certiorari)).

J. Order requiring turnover of documents claimed to be privileged as attorney work product when the documents are already in the court’s possession because, “if the court already has lawful possession of the documents, a subsequent turnover order will be immediately enforceable without the necessity of holding the subpoenaed party in contempt.” In re Grand Jury Proceedings, 43 F.3d 966, 970 (5th Cir. 1994) (citing Perlman v. United States, 247 U.S. 7 (1918)).

K. Turnover order allowing a receiver to take possession of and sell corporate assets of nonparties. Maiz v. Virani, 311 F.3d 334, 339 n.4 (5th Cir. 2002).

L. Order approving receiver’s plan to distribute assets of investment company whose assets were frozen after the SEC investigated it for securities fraud. SEC v. Forex Asset Mgmt. LLC, 242 F.3d 325, 330 (5th Cir. 2001).

M. Order refusing to modify a prior consent decree where enforcement of the consent decree ran afoul of the State’s Eleventh Amendment Immunity. Frazar v. Gilbert, 300 F.3d 530, (5th Cir. 2002) (finding order also reviewable under 28 U.S.C. § 1291(a) because it was an order “refusing to dissolve or modify” an injunction), rev’d on other grounds, Frew ex rel. Frew v. Hawkins, 124 S. Ct. 899 (2004).

N. Order determining that former Department of Justice attorneys were eligible to act as fact and expert witnesses for private party in civil rights suit brought by government. EEOC v. Exxon Corp., 202 F.3d 755, 757 (5th Cir. 2000).

O. Orders affecting the media’s First Amendment rights. United States v. Brown, 250 F.3d 907, 913 n.8 (5th Cir. 2001) (orders protecting juror anonymity (citing United States v. Gurney, 558 F.2d 1202, 1206-07 (5th Cir. 1977)); Ford v. City of Huntsville, 242 F.3d 235, 240 (5th Cir. 2001) (court closure orders or confidentiality orders (citing Davis v. E. Baton Rouge Parish Sch. Bd., 78 F.3d 920, 926 (5th Cir. 1996)); see also United States v. Brown, 218 F.3d 415, 420 (5th Cir. 2000) (gag order that applied to attorneys, parties, and witnesses and prohibited them from discussing case with any public communications media was appealable under the collateral order doctrine by criminal defendant in whose trial the gag order was issued). But see United States v. Edwards, 206 F.3d 461, 462 (5th Cir. 2000) (per curiam) (collateral order doctrine did not apply to criminal defendant’s motion to lift gag order).

3. Examples of orders not appealable under the collateral order doctrine.

A. Order denying a motion to stay or dismiss federal court litigation under Colorado River abstention. Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 275 (1988).

B. Order denying summary judgment motion based on Noerr-Pennington doctrine.
Acoustic Sys., Inc. v. Wenger Corp., 207 F.3d 287, 290 (5th Cir. 2000).

C. Order denying claim of immunity from liability (as opposed to immunity from suit). Swint, 514 U.S. at 42 (citing Mitchell, 472 U.S. at 526).

D. Order denying claim of immunity from suit that turns on factual determinations. Stena Rederi A.B. v. Comision de Contratos, 923 F.2d 380, 385-86 (5th Cir. 1991). But cf. Mitchell, 472 U.S. at 528 (the resolution of legal issues which are appealable under the collateral order doctrine often will entail some “consideration of the factual allegations that make up the plaintiff’s claim for relief”).

E. Order denying claim of immunity from suit based on sufficiency of the evidence, i.e., whether there is a genuine issue of fact. Johnson v. Jones, 515 U.S. 304 (1995); Kinney v. Weaver, No. 00-40557, 2004 WL 811724, at *6 n.9 (5th Cir. Apr 15, 2004); Martinez v. Tex. Dep’t of Crim. Justice, 300 F.3d 567, 576 (5th Cir. 2002) (“For a qualified immunity appeal, however, our review of any factual disputes is limited to their materiality, not their genuineness.”).

F. In rare instances, denial of claims of immunity on the eve of trial. Edwards v. Cass County, 919 F.2d 273, 276 (5th Cir. 1990) (“If every denial of a motion for leave to file a summary judgment motion asserting qualified immunity were immediately appealable, defendants would have a guaranteed means of obtaining last-minute continuances. We read Mitchell v. Forsyth as affording defendants a reasonable opportunity to obtain review of their qualified immunity claims without losing part of their immunity rights by having to stand trial. However, Mitchell is not designed as an automatic exemption from the orderly processes of docket control.” “To hold otherwise would be to open the floodgates to appeals by defendants seeking delay by asserting qualified immunity at the last minute (or even, as here, following jury selection).”).

G. Order denying the summary judgment of government officials sued in their personal or individual capacities is not an appealable collateral order. Burge v. Parish of St. Tammany, 187 F.3d 452, 476-77 (5th Cir. 1999) (citing Swint, 514 U.S. at 42).

H. Order denying or granting stays pending arbitration. Rauscher Pierce Refsnes, Inc. v. Birenbaum, 860 F.2d 169 (5th Cir. 1988).

I. Order denying certification of a class. Coopers & Lybrand, 437 U.S. at 935 (now appealable by permission under Rule 23(f)).

J. Order denying motion to disqualify counsel. Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 375 (1981).

K. Order granting motion to disqualify. Richardson-Merrell, Inc. v. Koller, 472 U.S. 424 (1985)

L. Order refusing to enforce a settlement agreement claimed by a party to protect it from suit. Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863 (1994).

M. Order denying a motion to dismiss based on the invalidity of service of process claiming immunity from such process. Van Cauwenberghe v. Baird, 486 U.S. 517, 521 (1988).

N. Orders concerning post-judgment discovery. Piratello v. Philips Elecs. N. Am. Corp., 360 F.3d 506, 508 (5th Cir. 2004) (order compelling party to appear at a deposition by a particular date, to answer questions regarding assets, and to produce documents requested, over a claim of self-incrimination; no jurisdiction over district court’s order under 1291 or collateral order doctrine; instead, the remedy was by appealing a contempt order)

Piratello, 360 F.3d at 508 (“This court has indicated its agreement with the Fourth Circuit’s view that the availability of an appeal through a contempt order renders the collateral order doctrine inapplicable to discovery orders. See A-Mark Auction Galleries, 233 F.3d at 898-99 (noting, with approval, the holding of MDK, Inc. v. Mike’s Train House, Inc., 27 F.3d 116, 119 (4th Cir. 1994)).”). In MDK, the Fourth Circuit said: “Courts have long recognized that a party sufficiently exercised over a discovery order may resist that order, be cited for contempt, and then challenge the propriety of the discovery order in the course of appealing the contempt citation. [citations omitted] Indeed, the Supreme Court has pointed to this path to appellate review as a reason why discovery orders are not appealable under Cohen.” MDK, Inc., 27 F.3d at 121

O. As a general matter, pre-trial discovery orders do not constitute final decisions under § 1291, and therefore, are not immediately appealable. See A-Mark Auction Galleries, Inc. v. Am. Numismatic Ass’n, 233 F.3d 895, 897 (5th Cir. 2000) (citing Church of Scientology v. United States, 506 U.S. 9, 18 n.11 (1992)); see Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 377 (1981).
The Supreme Court has held that a party that wishes to immediately appeal a discovery order “must [first] refuse compliance, be held in contempt, and then appeal the contempt order.” Church of Scientology, 506 U.S. at 18 n.11 (citing United States v. Ryan, 402 U.S. 530 (1971)). See infra p. 43 (mandamus may also be available when the discovery order requires disclosure of information claimed to be privileged).

P. Order granting or denying a motion to transfer venue under section 1404(a). Brinar v. Williamson, 245 F.3d 515, 517-18 (5th Cir. 2001); La. Ice Cream Distribs. v. Carvel Corp., 821 F.2d 1031, 1033 (5th Cir. 1987).

Q. Order of civil contempt. FDIC v. LeGrand, 43 F.3d 163, 168 (5th Cir. 1995); Lamar Fin. Corp. v. Adams, 918 F.2d 564, 566 (5th Cir. 1990).

R. Order of an agency review board remanding to an ALJ for further factfinding and consideration before final agency decision is rendered. Exxon Chems. Am. v. Chao, 298 F.3d 464, 469-70 (5th Cir. 2002).

B. Other Common-Law Doctrines of Finality

1. Gillespie “pragmatic finality” doctrine

Under the Gillespie doctrine, the requirement of finality is to be given a practical rather than a technical construction in determining the appealability in marginal cases of an order falling within what the Gillespie decision called the “twilight zone” of finality. Gillespie v. United States Steel Corp., 379 U.S. 148, 152-53 (1964). Counsel should avoid relying on the Gillespie doctrine.

The Supreme Court has distinguished Gillespie on grounds that, according to Professor Wright and his collaborators, “bury it quietly.” 15A CHARLES A. WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 3913, at 479 (2d ed. 1992). In Coopers & Lybrand v. Livesay, the Supreme Court refused to apply the Gillespie doctrine to permit appeal from an order
decertifying a class action, even on the assumption that the result would be termination of the litigation. Rather than expanding Gillespie, the Court wrote that permitting such appeals under section 1291 would be plainly inconsistent with the policies underlying section 1292(b) and that “[i]f Gillespie were extended beyond the unique facts of that case, § 1291 would be stripped of all significance.” Coopers & Lybrand v. Livesay, 437 U.S. 463, 477 n.30 (1978) (noting that Gillespie concerned a marginally final order disposing of an unsettled issue of national significance and that review of the issue “unquestionably implemented the same policy Congress sought to promote in §1292(b)”).

In fact, the most recent pronouncement from the Fifth Circuit about the vitality of the Gillespie doctrine is that the Fifth Circuit “no longer recognizes the exception.” Kmart Corp. v. Aronds, 123 F.3d 297, 300 (5th Cir. 1997); see Sherri A.D. v. Kirby, 975 F.2d 193, 202 n.12 (5th Cir. 1992) (calling practical finality more chimerical than real); United States v. Garner, 749 F.2d 281, 288 (5th Cir. 1985) (pragmatic finality approach has been virtually limited to facts of Gillespie). As the Fifth Circuit explained, Gillespie’s case-by-case approach to determining pragmatic finality is in fundamental conflict with the values and purposes of the final-judgment rule. See Pan E. Exploration Co. v. Hufo Oils, 798 F.2d 837, 841-42 (5th Cir. 1986); Newpark Shipbuilding & Repair, Inc. v. Roundtree, 723 F.2d 399 (5th Cir. 1984) (en banc).

If counsel finds a case supporting finality that sounds like it is based on practical or pragmatic finality, counsel should carefully trace the cases supporting the theory of finality to make sure that Gillespie is not the ultimate source of authority for that theory. An opinion’s pedigree is important. Counsel should make an informed decision about relying on those cases that rely on or are indirect progeny of Gillespie.

2. “Death knell” doctrine

Under the “death knell” doctrine, which is sometimes equated with the Gillespie doctrine, a case is final when a party is “effectively out of court.” Idlewild Liquor Corp. v. Epstein, 370 U.S. 713, 715 (1962); see McKnight v. Blanchard, 667 F.2d 477, 479 (5th Cir. 1982). The doctrine provides that any decision forcing a plaintiff to give up his claim, in effect, sounds the “death knell,” making it final for purposes of appeal. Coopers & Lybrand, 437 U.S. at 465-69.

Like the Gillespie doctrine, many commentators have argued that the death knell doctrine is all but a dead letter. Although the Fifth Circuit in the past noted that the Supreme Court did not actually overrule the death knell doctrine in Coopers & Lybrand, see McKnight, 667 F.2d at 479, the Fifth Circuit noted that the U.S. Supreme Court’s post-Cooper decision “in Deposit Guaranty National Bank v. Roper, 445 U.S. 326 (1980), declared that its prior decision in Coopers & Lybrand v. Livesay, 437 U.S. 463 (1978), sounded the death knell to that doctrine.” Save the Bay, Inc. v. United States Army, 639 F.2d 1100, 1103 n.3 (5th Cir. Feb. 1981).

And, more recently, the Fifth Circuit observed that the Supreme Court did “limit the death knell exception” in Coopers & Lybrand and in its later decision, Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 10 n.11 (1983). See Kmart Corp. v. Aronds, 123 F.3d 297, 300 (5th Cir. 1997).

In Moses H. Cone, the Supreme Court held that Idlewild’s reasoning was limited to abstention or similar doctrines where all or an essential part of the federal suit goes to a state forum. Aronds, 123 F.3d at 300. Further, even in cases involving stays, the Fifth Circuit has stated that while it liberally construed the death knell exception in the past, it could no longer do so because the exception was limited to cases where the stay requires all or essentially all of the suit to be litigated in state court. See Aronds, 123 F.3d at 300 (citing United States v. Garner, 749 F.2d 281, 288 (5th Cir. 1985), and Kershaw v. Shalala, 9 F.3d 11, 14 (5th Cir. 1993)). And even in cases involving abstention doctrines, resort to the death knell doctrine is usually unnecessary; direct reliance may be placed on Moses H. Cone and the Supreme Court’s more recent decision in Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 712 (1996).

3. Forgay “hardship–irreparable injury” exception

The Forgay doctrine, or, as it is sometimes called the “hardship and irreparable injury” exception to the final-judgment rule, grew out of Forgay v. Conrad, 47 U.S. (6 How.) 201 (1848). Today, the Forgay doctrine—if it has any continuing validity—is viewed a narrow exception to the final-judgment rule; it allows immediate appellate court review of district court orders that adjudicate part of one claim by directing the immediate delivery of property from one party to another, when there is the possibility that the losing party will experience irreparable harm or hardship if appeal of the execution is not allowed. Jalapeno Prop. Mgmt., LLC v. Dukas, 265 F.3d 506, 512 n.8 (6th Cir. 2001) (citing Forgay, 47 U.S. at 204); see also 15A CHARLES A. WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 3910, at 328 (2d ed. 1992) (noting that the Forgay doctrine “is likely to be applied only to orders that improvidently direct immediate execution of judgments that involve part of the merits of a claim and are outside the limits of Rule 54(b)”).

Although the Forgay doctrine is occasionally cited, it—like the Gillespie and death knell doctrines—is probably a dead letter. Petties v. Dist. of Columbia, 227 F.3d 469, 473 (D.C. Cir. 2000) (“[W]e are not at all sure that Forgay has continuing vitality apart from the collateral order doctrine . . . .”); see Digital Equip., 511 U.S. at 868 (appealability under the collateral order doctrine must be determined “without regard to the chance that the litigation might be speeded, or a ‘particular injustice’ averted by a prompt appellate court decision”); see, e.g., Maiz v. Virani, 311 F.3d 334, 339 n.4 (5th Cir. 2002) (holding that it had appellate jurisdiction under the collateral order doctrine over an order directed at two nonparty corporations to turnover property “worth tens of millions of dollars”).
In fact, the two most recent Fifth Circuit cases citing the Forgay doctrine as a possible jurisprudential exception to finality were decided more than a decade ago. Goodman v. Lee, 988 F.2d 619, 626 (5th Cir. 1993) (citing Forgay for a narrow proposition, but distinguishing it); Lakedreams v. Taylor, 932 F.2d 1103, 1107 n.7 (5th Cir. 1991) (citing it in dicta).

The Forgay category of hardship finality is narrow, and according to the Wright & Miller treatise, has not generated a large number of appeals. 15A CHARLES A. WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 3910 (2d ed. 1992). The most common, and the most expansive, jurisprudential exception to the finaljudgment rule is the collateral order doctrine.
Despite its stringent requirements and arguably limited applicability, the collateral order doctrine is the best chance of establishing appellate jurisdiction on a jurisprudential exception. Pan E. Exploration Co. v. Hufo Oils, 798 F.2d 837, 839 (5th Cir. 1986). But, if the facts of your case fit into the narrow and specific facts of the Forgay doctrine, counsel may wish to consider citing both the collateral order and Forgay doctrines and reviewing the Wright & Miller treatise’s treatment of the doctrine, which argues that “within its restricted sphere it provides a highly desirable elaboration of the final judgment rule.” 15A WRIGHT ET AL., supra, § 3910, at 329 (2d ed. 1996).

C. Procedure for Appealing Under the Collateral Order Doctrine

“An appeal taken under the collateral order doctrine is subject to all the usual appellate rules and time periods, including Rule 4 of the Federal Rules of Appellate Procedure.” United States v. Moats, 961 F.2d 1198, 1203 (5th Cir. 1992); see also Byrd v. Corporacion Forestal y Industrial de Olancho S.A., 182 F.3d 380, 386 (5th Cir. 1999) (“While we said in Moats that appeals taken pursuant to the collateral order doctrine are subject to all of the usual appellate rules governing interlocutory appeals, we also specifically identified Rule 4.”). A party seeking to appeal under the collateral order doctrine should follow the appeal procedures under FED. R. APP. P. 4 that apply to appeals “as of right” from traditional final judgments (e.g., invoke the appellate court’s jurisdiction by filing a notice of appeal in the district court within the time specified by FED. R. APP. P. 4).

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