Castaneda v. Beneficial Fin. I, Inc.

Schmetterer

The Court has jurisdiction over this adversary pursuant to 28 U.S.C. sec. 151 et seq and 28 U.S.C. sec 1334 and Local Rule 2.33 of the United States District Court for the Northern District of Illinois. This is a core proceeding. The above referenced adversary case was filed on February 3, 2012. The return date for the Summons was March 12, 2012. The Debtors served Beneficial Financial I, Inc., by regular US mail c/o CT Corporation System, 208 S. LaSalle, Ste 814, Chicago, IL 60604. This Court required certified mail service, so an alias summons was issued with a return date of May 10. 2012. The Debtors served Beneficial Financial I, Inc., with the alias summons by Cerified US mail c/o CT Corporation System, 208 S. LaSalle, Ste 814, Chicago, IL 60604.Beneficial Fimnancial I, Inc., has failed to answer or otherwise plead in this case. The Debtors Chapter 13 case was filed on October 18, 2011. It has not been confirmed.

Among Debtors scheduled assets is the Debtors' residence, commonly known as 14721 S. St Louis Ave., Midlothian, IL 60445, PIN #28-11 -402-039-0000. The appraised value of said real estate is $ 115,000.00 as demonstrated by the Uniform Residential Appraisal Report of record. Beneficial Financial I, Inc., holds a second mortgage on the subject premises. The lien of the first mortgage held by Citimortgage is $ 127,800.00, and lien of the second mortgage held by Beneficial Financial I, Inc., is $46,141.00 at this time. Under sections 506(a) and 506(d), Beneficial Financial I, Inc.'s second mortgage would be an allowed secured claim to the extent of the value of the estates interest in the property securing the claim, and would be void to the extent it is not an allowed secured claim. Under sections 506(a) and 506(d), Beneficial Financial I, Inc.'s second mortgage would be an allowed secured claim to the extent of the value of the estates interest in the property securing the claim, and would be void to the extent it is not an allowed secured claim. The amount owed on the first mortgage, $127,800.00, exceeds the value of the real estate, $115,000.00, Beneficial Financial I, Inc.'s second mortgage is wholly unsecured and may be stripped off. (See In re; Pence, 905 F.2d 1107 (7th Cir. 1990), In Re: King, 290 B.R. 642(C.D. 111.2003), and this Court's opinion in In re Forrest, 09 B 20874 (N.D. 111. 9/16/2009) Slip Op

WHEREFORE, for the foregoing reasons, a judgment by default will be entered in favor of the Plaintiffs and against Defendant RBS Citizens, NA, stripping the Defendant's second mortgage on the Plaintiffs residential real estate.

ENTERED:

____________________________

U.S. Bankruptcy Judge

William J. Moroney

AttyNo.: 6186591

Edwin L, Feld & Associates, LLC

29 S. LaSalle, Suite 328

Chicago, IL 60603

(312)263-2100