The Intersection and Overlap of Foreclosure, Sales, Mediation and Bankruptcy and Their Impact on Title

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Domenic Brooks
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1 The Intersection and Overlap of Foreclosure, Sales, Mediation and Bankruptcy and Their Impact on Title Introductions and Articulation of Goals of Program and Way to Handle Q&A Jim Knapp and Robert DiPalma (chairs of 2 sponsoring sections) Fact Pattern: A couple who owns a home falls upon hard times and the lender commences foreclosure and Def defends w/o counsel couple obtains counsel and files bankruptcy. We provide a package of materials tailored to the situation including the court documents, etc. - Hubert Homeowner and Hilda Homeowner own a 3-acre parcel of land with a house and barn, plus an adjoining 10-acre parcel of open land in Tinmouth. - The property is generally known as MudPit. - The 2 properties together appear to be worth about $311, based on the current tax assessment adjusted for the current common level of appraisal. - 1 st mtge is in the original principal amount of $260,000 at an interest rate of 5.35% and was dated February 1, 2007 and is recorded in Book 23 at Page 87 of the Tinmouth Land Records. o was granted to BigMortgageCompany, LLC, o was then assigned to Mortgage Warehousing Services Corp. (no longer exists), o and subsequently assigned to MTGServices, LLC, trustee for Mortgage Conduit Investment Trust #2791C, March 27, o mortgage is being serviced by Large Bank Servicing Corp. (LBSC). - There is also a Home Equity Credit Line payable to Local Credit Union with a current balance of $14, which is accruing interest at 7.5%. The HELOC is dated as of September 6, 2007, has a principal balance cap of $14, and is recorded in Book 24 at Page 273 of the Tinmouth Land Records. The Homeowners apparently had not made a payment on the First Mortgage since May of 2010 and now owe approximately $276, and they have not made any payments on the Home Equity Credit Line for at least 11 months. MTGServices, LLC filed a foreclosure complaint on July 15, The Homeowners filed a pro se answer on August 8, foreclosure has proceeded to the point where a judgment was issued on October 1, The period of redemption expired on March 31, 2013 with no redemption completed by any party. - A sale of the property was scheduled to occur on April 21, The Homeowners filed a chapter 13 bankruptcy petition on April 2, I. The Nuts and Bolts of Vermont Foreclosure Law and Procedure J. Mary Teachout, Josh Lobe (C perspective), Mary Ashcroft (D perspective) - walk through of a foreclosure proceeding from complaint to confirmation of sale - best practices tips from the bench - the future of strict foreclosure in Vermont - an overview of the 2012 amendments to the Vermont foreclosure statute Materials will include Rule 80.1 and a summary of new Vt f/c statute and case flow charts BREAK (midway thru I)

files bankruptcy. We provide a package of materials tailored to the situation including the court documents, etc.

2 II. Standing Issues: A Review of Controlling Case Law J. Lobe, Heather Cooper, Hal Miller, Andre Bouffard - UCC requirements for enforcing a note - allonges, assignments, and servicer issues - who has standing to commence / prosecute a foreclosure action in state court - who has standing to obtain relief from stay in bankruptcy court in order to enforce a note or mortgage * Local Bankruptcy Rule (g) allows subordinate lien holders to piggyback on relief from stay orders obtained by superior lien holder - practice tips from title insurer Materials include bankruptcy and state court cases re standing plus permanent editorial rept from UCC, other cases re standing, and copy of Vt LBR (g). LUNCH III. The Nuts and Bolts of Filing a Chapter 13 Case when Foreclosure Action is Pending J. Colleen Brown, Rebecca Rice (D perspective), A. Bouffard (C perspective), J. Sensenich - by when the chapter 13 case must be filed to give debtor relief from foreclosure - before final redemption (sale) per Willette case - ability to reinstate mortgage and cure default over time, and import of redemption date(s) on that - how and when to file a motion for relief from stay in bankruptcy court - best practices tips from the bench / J Teachout will discuss what state ct does when bk filed - an overview of the relief available to bankruptcy debtors who have foreclosure actions pending - impact of filing a ch 13 case at various stages of the foreclosure proceeding (contrast w/ ch 7?) - Materials include a ch 13 petition, sch and plan, C obj to plan, and debtors response to creditor s obj, Taylor case, comments from Max Gardner re CMP plans IV. Overview of the State Court and Bankruptcy Court Mediation Processes J. Brown, J. Teachout, Tavian Mayer & Heather Cooper (mediators) - compare and contrast the two mediation processes available - strategy considerations when deciding in which court to seek relief (or whether relief from both courts is needed) in various fact patterns. - practice tips from mediators - Materials include a summary of Vt s proposed new mediation statute and perhaps statistics from state court and VTB re their respective mediation processes V. Selling Real Property through a Foreclosure Sale Rebecca Rice, Andre Bouffard, Hal Miller - mechanics of the options for conveying title to real property in foreclosure: * judicial foreclosure sale, * non judicial foreclosure sale, and * strict foreclosure - pros and cons of each option in terms of procedural requirements, cost, timing and title risk - practice tips from title insurer - Materials include sample notices of sale (judicial sale, non-judicial sale) & order confirming sale, as well as sample contracts of sale and a sample title insurance commitment BREAK 2

in state court - who has standing to obtain relief from stay in bankruptcy court in order to enforce a note or mortgage * Local Bankruptcy Rule 4001-2(g) allows subordinate lien holders to piggyback

3 VI. Selling Real Property through a Bankruptcy Proceeding Douglas Wolinsky, Jan Sensenich, Hal Miller - mechanics of the options for conveying title to real property in bankruptcy: * 363(b) or 363(f) bankruptcy sales, and * sales through plans - pros and cons of each option in terms of procedural requirements, cost, timing and title risk - avoiding liens and stripping mortgages in anticipation of sale when is each available? - practice tips from bankruptcy trustees - Materials include samples of 363(b) motion and order, sample 363(f) motion and order, ch 7 trustee s deed, Vt LBR requiring sep motion for sale in chapter 13, copy of Ch 13 T s proposed order to get good title post-ch 13, summary of various types of liens and avoidance in bankruptcy [under 522, 547, 548, and 506 (latter called a Pond order)] MATERIALS DUE 4/26/13 3

4 VT Bar Association Continuing Legal Education Registration Form Please complete all of the requested information, print this application, and fax with credit info or mail it with payment to: Vermont Bar Association, PO Box 100, Montpelier, VT Fax: (802) PLEASE USE ONE REGISTRATION FORM PER PERSON. First Name Middle Initial Last Name Firm/Organization Address City State ZIP Code Phone # Fax # Address The Intersection & Overlap of Foreclosure, Sales, Mediation & Bankruptcy & Their Impact on Title May 2, 2013 Capitol Plaza, Montpelier 9:00AM 4:00PM 6.25 MCLE GENERAL CREDITS Early Registration Discount by 4/25/13 Registration Received After 4/25/13 VBA Attorney Members: $165 Non VBA Member Attorneys: $440 Paralegal & Clerk/Student Members: $125 Associate Members Licensed in another State/Jurisdiction: $165 All Others: $130 VBA Attorney Members: $185 Non VBA Member Attorneys: $460 Paralegal & Clerk/Student Members: $145 Associate Members Licensed in another State/Jurisdiction: $185 All Others: $150 NO REFUNDS AFTER April 25, 2013 PAYMENT METHOD: Check enclosed (made payable to Vermont Bar Association) Amount: Credit Card (American Express, Discover, Visa or Mastercard) Credit Card # Exp. Date Cardholder:

First Name Middle Initial Last Name Firm/Organization Address City State ZIP Code Phone # Fax # E-Mail Address The Intersection & Overlap of Foreclosure, Sales, Mediation & Bankruptcy & Their Impact

5 Vermont Bar Association CERTIFICATE OF ATTENDANCE Please note: This form is for your records in the event you are audited Sponsor: Vermont Bar Association Date: May 2, 2013 Seminar Title: Location: Credits: The Intersection & Overlap of Foreclosure, Sales, Mediation & Bankruptcy & Their Impact on Title Capitol Plaza, Montpelier 6.25 General MCLE Luncheon addresses, business meetings, receptions are not to be included in the computation of credit. This form denotes full attendance. If you arrive late or leave prior to the program ending time, it is your responsibility to adjust CLE hours accordingly.

MULTIDISCIPLINARY COLLABORATIVE PRACTICE TRAINING Co-Sponsored by: Networks, Inc., Burlington, VT (http://networksvt.org/)

MULTIDISCIPLINARY COLLABORATIVE PRACTICE TRAINING Co-Sponsored by: Networks, Inc., Burlington, VT (http://networksvt.org/) When: Where: Credits: April 20 & 21, 2012 (Friday and Saturday) 12.0 MCLE Credits