In Re Moore v. BAC Home Loans, the Chapter 13 debtor’s confirmed plan called for the surrender of his home to Bank of America, which held the mortgage. The bank did not object to the debtor’s plan, and subsequently was granted stay relief. Ten months after the plan was confirmed, and nine months after relief from the automatic stay was granted, Bank of America had yet to foreclose. The debtor filed an adversary proceeding alleging that Bank of America was in contempt of the confirmation order. The debtor sought actual damages for expenses related to a citation for violation of the local housing code as well as punitive damages of $250,000, attorney fees and expenses. In addition, the debtor asked the bankruptcy court to transfer the property out of his name. The court granted Bank of America’s motion for summary judgment, finding that the confirmation order did not compel the bank to foreclose upon the surrendered property. “Under the terms of a traditional security deed, the grantee holds title only for the collection of his debt,…Because the debtor remains the equitable owner of the property, I find, he is not divested of his ownership obligations until the actual foreclosure occurs or until the lender takes affirmative steps of ownership.” the court said.

Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years. He specializes in bankruptcy, business and civil litigation and has handled more than five thousand successful bankruptcy cases in California. He speaks Mandarin and Fujien and looks forward to discussing your case with you personally. Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803.