Case No. 10-36754, Adv No. 10 A 01860.United States Bankruptcy Court, N.D. Illinois, Eastern Division.
November 23, 2010
FINDINGS OF FACT AND CONCLUSIONS OF LAW
JACK SCHMETTERER, Bankruptcy Judge
Pursuant to a Default Order and because the allegations in the Complaint have been taken as confessed against Resurgent Capital Services L.P., the following findings of fact and conclusions of law are made and will be entered:
1. Plaintiff is an individual residing at 4533 W. Montana, Chicago, IL 60639.
2. Resurgent Capital Services L.P. is a lender and/or servicer of mortgages.
3. Plaintiffs filed for relief under chapter 13 of the United States Bankruptcy Code on 08/17/2010 in the Northern District of Illinois, case number 10-36754.
4. This adversary proceeding arises under sections 502 and 506 of the United States Bankruptcy Code.
5. This Court has jurisdiction over this proceeding pursuant to 28 U.S.C. §§ 151, 157 and 1334 and this is a core proceeding under 28. U.S.C. § 157.
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6. Plaintiff is the owner of real estate located at 4533 W. Montana, Chicago, IL 60639 described as follows:
Section-Township: 27-40-13; SubDiv-Condo: whiteswht/B/15B/26; Lot #34;
Block #26
Common Address: 4533 W. Montana, Chicago, IL 60639
Parcel ID #: 13-27-326-010-0000
7. The fair market value of the real estate is $210,000 pursuant to Exhibit A to the original adversary complaint.
8. A first mortgage lien is currently held by Saxon in the amount of $284,607.67 pursuant to the claim that Saxon filed in the underlying bankruptcy — claim number 7.
9. Under 11 U.S.C. §§ 506(a) and 506(d), Defendant’s junior mortgage would be allowed a secured claim to the extent of the value of the estate’s interest in the property securing the claim, and Defendant’s lien is void to the extent it is not allowed a secured claim.
10. The amount owed on the first mortgage, $284,607.67, exceeds the value of the above real estate, $210,000.
11. Due to the junior mortgage lien, which is held by Defendant, being wholly unsecured, it should not be allowed as a secured claim, and the mortgage may be stripped off. See,Holloway v. U.S., 2001 WL 1249053 (N.D. Ill. Oct. 16, 2001); Inre Waters, 276 B.R. 879 (N.D. Ill 2002); In re Pond, 252 F.3d 122
(2nd Cir. 2001); In re McDonald, 205 F.3d 606 (3rd Cir. 2000); InRe Bartee, 212 F.3d 277 (5th Cir. 2000); In Re Lane,
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280 F.3d 663 (6th Cir. 2002); In re Zimmer, 313 F.3d 1220 (9th Cir. 2002); In re Tannter, 217 F.3d 1357 (11th Cir. 2000).
Jonathan D. Parker, Attorneys for Plaintiffs, Geraci Law LLC, Chicago, IL.