TD Bank, N.A. v. LaPointe, 505 B.R. 589

May 2009: Debtor granted mortgage to Bank on residence; default leads to foreclosure auction on March 20, 2013; Bank was successful bidder and signed memorandum of sale; Debtor filed Chapter 13 petition the next day; foreclosure deed not recorded before petition; Debtor's plan proposed cure/reinstatement of mortgage; Bank moved for relief from stay to record deed and evict; Bankruptcy court denied relief; TD Bank appeals seeking reversal and relief from stay.
Bank argued the pre-petition foreclosure divested Debtor of property interest that would be estate property protected by stay.
Debtor argued he retained an interest as of petition date because foreclosure deed was not recorded, citing state law where title passes only after recording; the Beeman approach suggested Debtor could cure under §1322(c)(1).
Bankroom of the bankruptcy court concluded Debtor had sufficient interest to proceed with plan; court denied relief from stay without prejudice; Panel granted leave to appeal for interlocutory review.
Panel concludes §1322(c)(1) is clear and Debtor was divested of any interest pre-petition; foreclosure sale completed under state law before petition; property not estate; reverses and remands for entry of relief from stay

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether §1322(c)(1) cuts off cure rights before petition date	Beeman approach; cure ends when sale completes under state law	§1322(c)(1) unambiguously ends cure at foreclosure sale	Yes; Debtor’s cure right ended before petition; property not estate
Does New Hampshire foreclosure law control when a sale is complete	NH law shows sale complete at recording the deed	State law determines when sale is complete; gavel falls pre-petition	NH completion occurs before petition; sale complete pre-petition
Is the property at issue property of the bankruptcy estate	Debtor retains rights under state law redemption	Debtor divested of any interest pre-petition; not estate property	Property not estate; not subject to automatic stay relief question
Did the bankruptcy court abuse its discretion in denying stay relief	Bank's pre-petition sale divested interest warranting relief	Debtor had interest under Beeman; denial was proper	Abuse of discretion; reversal and remand for entry of relief from stay
Should Beeman be followed in light of §1322(c)(1) interpretation	Beeman aligned with federal cure rights	Beeman misreads statute; correct interpretation is unambiguous	Beeman incorrect; statute unambiguous; reversal warranted

Barrows v. Boles, 141 N.H. 393, 687 A.2d 979 (1996) (N.H. 1996) (mortgagor has no redemption right after foreclosure under NH law)
In re Beeman, 235 B.R. 519 (Bankr.D.N.H. 1999) (Beeman held 1322(c)(1) cure ends when sale complete under state law, title passes on recording)
In re McKinney, 344 B.R. 1 (Bankr.D.Me. 2006) (discusses §1322(c)(1) interpretation and state-law relevance)
In re Crichlow, 322 B.R. 229 (Bankr.D. Mass. 2004) (states approach to 1322(c)(1) and state foreclosure law)