Opinion
CASE NO. 13 B 30767 ADV. NO. 13 AP 01217
11-14-2013
IN RE: Maria T Arfani, Debtor(s), Maria T Arfani, Plaintiff(s), v. Household Finance Corporation III aka HSBC Bank, Defendant(s).
CHAPTER 13
Judge Jack B. Schmetterer
FIDINGS OF FACT AND CONCLUSIONS OF LAW
Findings of Fact.
Findings of fact are based on the filed Adversary Complaint and the Affidavit of Maria T Arfani.
A. The Parties
1. The Plaintiff is Maria T Arfani ("Plaintiff").
2. The Defendant is HOUSEHOLD FINANCE CORPORATION III aka HSBC BANK ("Defendant").
B. Factual Background
1. On July 31, 2013, Plaintiff filed a petition for relief under Chapter 13 of Bankruptcy code.
2. Plaintiff owns the real estate commonly known as 168 Columbia Ave, Des Plaines, II.
60016.
3. Bank NY Mellon, serviced by Specialized Loan Servicing LLC holds a first mortgage lien on the real property commonly known as 168 Columbia Aye, Des Plarnes, IL 60016, with a secured claim of $353,338.00.
4. The Defendant holds a second mortgage lien on the real property known 168 Columbia Ave, Des Plaines, IL 60016 in the amount of $38,615.00.
5. That the fair market value at the time of filing of case number 13 B 30767 of the real estate was not more than $328,859.00.
6. The first mortgage lien of Bank NY Mellon, serviced by Specialized Loan Servicing LLC is a secured claim based on the mortgage with Countrywide Home Loans that was recorded on 1/10/2006 as document number 0601033023 with the Cook County Recorder of Deeds, Illinois. This mortgage was subsequently assigned to Bank NY Mellon which was recorded on 2/1/2012 as document number 1203208227 with the Cook County Recorder of Deeds, Illinois
7. The second mortgage lien of HOUSEHOLD FINANCE CORPORATION III is a claim based on the mortgage recorded on 12/23/2005 in the Office of the Cook County Recorder of Deeds as document number 0535736003.
8. The current Chapter 13 Plan provides the Plaintiffs will make monthly payments to the Chapter 13 Trustee in the amount of $151 (one hundred fifty-one) monthly for 60 (sixty) months.
9. Under the Plan, general unsecured creditors will be paid a dividend of ten percent (10%) of their allowed claim.
10. On October 8, 2013, Plaintiff issued a summons and complaint to 11 U.S.C. §
1322(b) and Bankruptcy Rule 3012 to determine the validity of Defendant's lien on Plaintiff s property located at 168 Columbia Ave, Des Plaincs, IL 60016.
11. That on October 8, 2013 a copy of the summons and complaint was served in accordance with Rule 7004 of the Federal Rules of Bankruptcy Procedure by Certified U.S. Mail, postage prepaid to an officer of the Defendant at: Household Finance Corporation III, c/o HSBC Bank, Patrick Burke, CEO, 26525 N. River woods Blvd., Mellawa. IL 60045.
12. The summons indicated .that a motion or answer was required within 30 days of issuance; to date, no responsive pleading has been filed.
13. No evidence has been presented to challenge the validity of the secured claim that holds priority over the second mortgage lien.
14. No evidence has been presented to challenge the fair market value of $328,859.00.
15. The secured claim of Bank NY Mellon, serviced by Specialized Loan Servicing LLC in the amount of $353,338.00 exhausts the value and equity in Plaintiff's residence.
16. There is no value and equity to support the claim of the Defendants.
CONCLUSIONS OF LAW
A. Jurisdiction
1. The contested matter is a. core proceeding pursuant to 28 U.S.C. §157(b)(2)(K). This court has jurisdiction overt this matter pursuant to 28 U.S.C. § 157(a) and 1334(b).
2. Venue is proper in this pursuant to 28 U.S.C. § 1409.
B. Argument
3. This action was initiated under F. R. Bankr. P. 3012.
4. The Debtor scheduled the first Bank NY Melton, serviced by Specialized Loan Servicing LLC secured claim in the amount of $353,338.00 and the second HOUSEHOLD FINANCE CORPORATION III aka HSBC BANK claim in the amount of $38,615.00.
5. That value of Plaintiff's residence is $328,859.00.
6. As there is no value or equity to support the second priority lien of HOUSEHOLD FINANCE CORPORATION III aka HSBC BANK, the HOUSEHOLD FINANCE CORPORATION III aka HSBC BANK claim is not a claim secured at all by a security interest in the Debtor's residence, as the term is used in § 1322(b) of the Bankruptcy Code.
7. Because the junior mortgage lien held by Defendant is wholly unsecured, it should not be allowed as secured claim and the mortgage lien may be stripped off. In Re Mann, 249 B.R 831,840 (1st Cir BAP 2000); In Re Pond, 2001 U.S.App.Lexis 11287 (Cir. 20010; Bartee vs. Tara Colony Homeowners Assoc, 212 F.3d 271 (5th Cir. 2000); In re Lam, 211 B.R. 36 (9th Cir BAP 1357); In Re Tanner, 217 F.3d 1357 (11 th Cir).
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United States Bankrutcy Judge