In Re Lopez
446 B.R. 12
| Bankr. D. Mass. | 2011Background
- Debtor Henry Lopez filed a skeletal Chapter 13 petition on January 17, 2009, with schedules showing a Hyde Park residence valued at roughly $300,000 and secured claims totaling about $452,000.
- Aurora, as assignee of Shelter’s mortgage through MERS, claimed a first lien of $360,000 and moved for relief from stay on September 3, 2010, alleging post-petition arrears and lack of equity.
- Debtor acknowledged three post-petition payments in arrears and disputed the ownership/possession chain, arguing potential standing defects and improper HAMP denial.
- Parties disputed whether Aurora properly holds the note and mortgage, with a separate Evanston assignment cited by Debtor and questions about MERS authorization and chain of title.
- A September 30, 2010 hearing focused on whether HAMP analysis should use current payments versus a future fully amortized payment; the court ordered briefs on HAMP and standing.
- The court ultimately concludes Aurora has standing as a party in interest and grants relief from stay under 11 U.S.C. § 362(d).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of Aurora to seek relief from stay | Aurora has a colorable claim as mortgagee and holder of the mortgage with power of sale. | Debtor contends standing is defective due to assignment flaws and MERS limitations. | Aurora has standing as a party in interest. |
| HAMP eligibility and its impact on relief from stay | HAMP guidelines used, requiring current payment in eligibility; Debtor was denied appropriately. | Debtor argues improper denial and seeks lender to modify; standing to enforce HAMP is lacking. | HAMP issues do not defeat relief; Court proceeds under Grella framework and grants relief. |
| Equity and undersecured status of the Property | Property value is insufficient to satisfy the mortgage; debtor lacks equity. | Value contested but either way debt exceeds value; undersecured remains. | Property is undersecured; relief from stay warranted. |
| Validity of Aurora's chain of title and assignment authorization | MERS as nominee could lawfully transfer the mortgage; assignment valid despite note-handling gaps. | Challenges to assignment authorization, MERS entity identity, and note ownership; requests evidentiary hearing. | Aurora established colorable title and no latent defects required to defeat stay; standing sustained. |
Key Cases Cited
- Grella v. Salem Five Cent Sav. Bank, 42 F.3d 26 (1st Cir. 1994) (relief from stay analogous to preliminary injunction; determine colorable claim to property)
- In re Maisel, 378 B.R. 19 (Bankr. D. Mass. 2007) (standing framework for relief from stay—colorable claim and party in interest)
- Carpenter v. Longan, 83 U.S. 271 (1872) (note and mortgage inseparable; assignment of note carries mortgage)
- In re Huggins, 357 B.R. 180 (Bankr. D. Mass. 2006) (standing and mortgage-theory considerations in Massachusetts practice)
- In re Donahue, 231 B.R. 865 (Bankr. D. Vt. 1998) (irrebuttable presumptions regarding necessity of property are disfavored)