Reed v. New York Community Bank (In re Reed)

Case Type:
Consumer
Case Status:
Affirmed
Citation:
CC-16-1028-DKiF (9th Circuit, Dec 02,2016) Not Published
Tag(s):
Ruling:

In rem relief from stay was properly granted by the bankruptcy court where debtor had filed multiple cases and transferred fractional interests in residence.

Procedural context:

Pro Per Debtor appealed bankruptcy court order, and the 9th Cir. BAP affirmed.

Facts:

Debtor disputed validity of Bank's note and deed of trust on his residence.  He filed a series of Chapter 7 and Chapter 13 cases, and also transferred a 10% interest in the property to a Trust, and then to an entity which had no knowledge of the transfer.  The Bank sought in re relief from stay under Section 362(d)(4).  The Debtor argued that the loan documents were invalid, and the bankrutpcy court that the Bank had shown it had a "colorable claim" to allow relief from stay.  As the Ninth Circuit has explained, “hearings on relief from the automatic stay are . . . handled in a summary fashion. . . . The validity of the claim or contract underlying the claim [here, the Loan Documents] is not litigated during the hearing.” Johnson v. Righetti (In re Johnson), 756 F.2d 738, 740 (9th Cir. 1985).  The Bank argued that the appeal was moot, but the BAP held that it was not moot because the court had entered in rem relief and because the Bank had not forelclosed yet. 

Judge(s):
DUNN, KIRSCHER and FARIS

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