Can you be turned down from Lien strip? 23 Answers as of August 15, 2011
I am filing chapter 13 and my appraisal came in $2000.00 less than what is owed on my first. Can they turn me down? I owe 420,000.00 on my first and the appraisal came in at 418,000.00 I owe 112,000.00 on the second I am trying to get stripped-Free Case Evaluation by a Local Lawyer!
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Law Office of Asaph Abrams | Asaph Abrams
One's entitled to cut it close. This is an evidentiary issue. It is incumbent upon the affected lien holder to successfully object to the lien avoidance motion. Answer does not address all implications of the question, nor is it legal advice to be relied upon.
Answer Applies to: California
Replied: 8/15/2011
Heupel Law | Kevin Heupel
Yes, the second mortgage has the right to contest the lien strip by challenging the value of your home. In a lien strip situation, the second mortgage company has the right to show the value is actually higher than the balance of the first mortgage. In your case, if the second mortgage company proves that the value of the home is greater than $420,001, then you will not strip your second mortgage. Although you have an appraisal, sometimes second mortgage companies are successful showing errors in the appraisal that would increase the home’s value. Thus, your situation is not a guarantee that you’ll remove the second mortgage.
Answer Applies to: Colorado
Replied: 8/10/2011
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
The first must be more than the appraisal to do a lien strip. Sounds like it won't work for you.
Answer Applies to: California
Replied: 8/1/2011
Breckenridge and Walton | Alan D. Walton
You can expect a battle. Your appraisal is less than one percent from the first. I am guessing the second will find an appraiser that will find the value exceeds the first.
Answer Applies to: Michigan
Replied: 7/29/2011
Apple Law Firm PLLC | David Goldman
You should discuss what to do with your bankruptcy lawyer.
Answer Applies to: Florida
Replied: 7/29/2011
Tucker Legal Clinic | Samuel Tucker
There are several factors that go into the lien stripping determination. If you meet the criteria there is no reason why the lien shouldn't be stripped. Its not discretionary.
Answer Applies to: Mississippi
Replied: 7/28/2011
Law Office of Maureen O' Malley | Maureen O'Malley
Nothing is certain in bankruptcy. One thing to note is that the lien strip doesn't actually occur until you complete your Plan successfully. I hope you're using a lawyer. This is the kind of thing that could really cost you if you're not.
Answer Applies to: Virginia
Replied: 7/28/2011
Ursula G. Barrios Law | Guillermo Machado
If the bank objects and the judge sides with the bank at an evidentiary hearing.
Answer Applies to: California
Replied: 7/28/2011
Law Offices of Michael J. Berger | Michael J. Berger
A lien strip motion can be granted or denied depending on the facts. For example, if the judge determines that the lender's appraiser is more credible than your appraiser, and if the lender's appraiser's appraisal shows a value that would make your property not eligible for a lien strip, your lien strip motion will be denied.
Answer Applies to: California
Replied: 7/28/2011
Carballo Law Offices | Tony E. Carballo
If the lender obtains an appraisal that is higher than $420,000 and timely objects to your motion to strip then the court will have to hold a hearing and determine the value of the property. The appraisers may have to testify and justify their opinions. If the value, as determined by the court, is even a penny over the balance of the first loan then your motion will have to be denied by the Court.
Answer Applies to: California
Replied: 7/28/2011
Lewis Adams and Associates | Lewis P. Adams
The creditor can object to the lien strip. The creditor can get its own appraisal and disbute your appraisal. The closer the value to the debt owed on the first, increases the risk that the lender for the second mortgage may object. However, if the lender never objects to the lien strip, the appraised value would stand and the lien would be stripped.
Answer Applies to: Utah
Replied: 7/28/2011
The Law Office of Mark J. Markus | Mark Markus
Sure, you can lose the motion easily if the creditor objects and comes in with a higher appraisal.
Answer Applies to: California
Replied: 7/28/2011
Eric J. Benzer, Attorney at Law | Eric Benzer
Yes, but consult with attorney.
Answer Applies to: Maryland
Replied: 7/28/2011
Ashman Law Office | Glen Edward Ashman
With numbers that close I think it is very likely you'll see the lender argue and it is far from a slam dunk in close calls. Hopefully you have a lawyer, because a pro se litigant in a contested bankruptcy motion has two chances - slim and none - and an experienced attorney is more likely to be able to argue a close call and win. In saving a few dollars in legal fees you could cost yourself over $100,000.
Answer Applies to: Georgia
Replied: 7/28/2011
Mauritz Van Niekerk, Attorneys at Law | Christiaan van Niekerk
You need to seek proper legal full disclosure advice
Answer Applies to: New York
Replied: 7/28/2011
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
A lien strip can be contested. The lender may assert that the property is worth more than your appraisal. The bankruptcy judge will decide the outcome.
Answer Applies to: California
Replied: 7/28/2011
Financial Relief Law Center | Mark Alonso
You should contact your bankruptcy attorney in such a situation. The rules for lien stripping are that you must not have any equity with the first mortgage in order to be considered for the lien strip. If the value of the property comes back this close, it is possible that the court may think it's too close of a call, so they may order a second valuation of the property. You may want to be prepared to rebut a finding of a higher value.
Answer Applies to: California
Replied: 7/28/2011
Dan Shay Law | Daniel Shay
It is up to the 2nd mortgage to object and request an evidentiary hearing.
Answer Applies to: California
Replied: 7/28/2011
Law Office of Harry L Styron | Harry L Styron
As long as the appraised value of the property is less than the total amount of the first you are unlikely to be turned down. The ground would be that the creditor contests the valuation. If you have a formal appraisal then such a contest is very unlikely. The reason that the appraisal must be less than the total amount of the first is that, if there is any security interest in the 2nd at all the only way the lien strip will be granted is if you pay in cash at the time of confirmation of the plan the total secured interest of the 2nd lien holder.
Answer Applies to: California
Replied: 7/28/2011
Harkess and Salter, LLC | Stephen Harkess
The creditor will do their own appraisal and if their value is higher they can challenge your right to strip the lien. If the judge believes your appraisal is more accurate - you win. If the creditor's appraisal is found to be more accurate - you lose.
Answer Applies to: Colorado
Replied: 7/28/2011
Law Offices of Alexzander C. J. Adams, P.C. | Alexzander Adams
You may need to have an evidentiary hearing where you present expert testimony of valuation and the lender provides their testimony. The judge then makes a final decision.
Answer Applies to: Oregon
Replied: 7/28/2011
Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
If you owe a penny more than the fair market value, then the junior lien can be stripped and treated as unsecured. The only issue is that when it is that close, you want to make sure that you have a solid, unquestionable appraisal because if the bank gets an appraisal that shows equity, then you're looking at the judge deciding who to believe.
Answer Applies to: Indiana
Replied: 7/28/2011
