Melo v. GMAC Mortgage LLC

Summarized by Samuel Mushell , Americans United for Government Reform
12 years 6 months ago

Citation:

BP No. MW 12-086

Tag(s):

Ruling:

Bankrupt debtors' adversary complaint against mortgagor is dismissed as moot.

Procedural context:

Debtors filed for Chapter 7 to avoid foreclosure. Debtors later filed for Chapter 13 together with 2 complaints against Creditor. Bankruptcy Court ruled in favor of creditor. Debtors appealed.

Facts:

The Melos, the debtors, received a loan modification from GMAC in 2010. They have not made mortgage payments since October 2010. They filed for Chapter 7 in 2011. After the case closed, GMAC sought to foreclose on the property. Debtors filed for Chapter 13 and alleged 2 complaints against GMAC: (1) it had agreed to forbear; and (2) the foreclosure was not in good faith. GMAC moved for summary judgment because it had denied loan modification requests and (a) had no obligation to consider one under HAMP; and (2) if such an obligation exists, there can be no private action. The Bankruptcy Court ruled in favor of GMAC because debtors' application for a loan modification does not preclude GMAC from foreclosure action. The 1st circuit dismissed this case as moot because the adversary proceeding is not connected to the underlying bankruptcy. Regardless of the bankruptcy court's ruling in the Chapter 13 case, GMAC is not precluded from state court foreclosure action.

Judge(s):

Haines, Deasy, Gody

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