IN RE POPP, (Bankr.M.D.Pa. 2003)

MARY D. FRANCE, Bankruptcy Judge

The background for this Order is as follows. Mortgage Electronic Registration Systems, Inc. (MERS) held the residential mortgage of the Debtors, Gary Lee and Marlene W. Popp. When the Debtors defaulted on their mortgage pre-petition, MERS instituted foreclosure proceedings. A sheriff's sale was noticed and duly held, in accordance with state law, on December 2, 2002. The sheriff's sale was concluded, and MERS bought in the property. On January 22, 2003, Debtors filed the instant Chapter 13 case in order to avoid eviction. As of January 22, 2003, MERS had not yet recorded its deed from the sheriff's sale. On January 30, 2003, MERS filed the instant Motion for relief from the automatic stay in order to allow it to proceed with eviction. A hearing was held on this Motion on March 25, 2003, and the matter was taken under advisement. Briefs have been filed, and the matter is ripe for decision.

The sole issue before me is whether the Bankruptcy Code enables the Debtors to cure the defaults on their mortgage through a Chapter 13 Plan after the property has been sold at sheriff's sale. At the hearing, Debtors' counsel argued that he could provide the Court with case law showing that legal title had not yet passed to MERS as of the date of the Petition, because MERS had not yet recorded a deed. However, as the Debtors' brief essentially concedes, the Bankruptcy Courts have not interpreted the Code as providing a debtor with any rights beyond those of state law, and under state law, any right of redemption of a mortgage obligation is extinguished at the sheriff's sale. While Debtors' brief cites state cases which stand for the proposition that only equitable title passes to a purchaser at sheriff's sale, and that legal title remains in the mortgagor, such cases do not compel the conclusion that such mortgagor may still redeem his original mortgage with the mortgagee after the sheriff's hammer has fallen. As this and many other courts have long held, "all [d]ebtors' rights cognizable in bankruptcy [are] extinguished by the fall of the sheriff's hammer". In re Yocum, Case No. 1-96-02304 (Bankr.M.D.Pa. Slip. Op. September 29, 1997), citing, In re Donovan, 183 B.R. 701 (Bankr.W.D.Pa. 1995); see also, In re Moore, 211 B.R. 111 (Bankr.E.D.Pa. 2001); In re Townsville, 268 B.R. 95 (Bankr.E.D.Pa. 2001). Therefore, the instant Debtors have no rights to the property which they may redeem through the Chapter 13 Plan.

The Motion for Relief from stay shall be and hereby is GRANTED.