Pena v. Bank of Am., NA (In re Pena)

Jack B. Schmetterer

Pursuant to a Default Order and because the allegations in the Complaint have been taken as confessed against Bank of America, NA, the following findings of fact and conclusions of law are made and will be entered:

1. Plaintiffs filed a petition for relief under Chapter 13 of the United States Code (the "Bankruptcy Code") on January 14, 2013,

2. Bank of America, NA (hereinafter, "BOA") is a lending institution having a mailing address of P.O. Box 26012, NC4-105-02-99, Greensboro, North Carolina 27420, for matters related to Bankruptcy Real Estate.

3. This adversary proceeding arises under sections 502 and 506 of the Bankruptcy Code.

4. This Court has jurisdiction under 28 U.S.C. 1334.

5. Plaintiffs reside at 2530 West Lyndale Street, located in the City of Chicago, State of Illinois, County of Cook having a parcel identification number of 13-36-212-019-0000 (hereinafter referred to as the "Subject Property").

6. The Subject Property is Plaintiffs' principal residence.

7. The fair market value of the Subject Property is $293,000.00.

8. A first mortgage lien is currently held by PNC Bank, NA, in the amount of $338,856.89, according to their proof of claim.

9. Defendant's second mortgage is in the amount of $42,305.37, according to their proof of claim.

10. 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.

11. The amount owed on the first mortgage, $338,856.89, exceeds the value of the above real estate, $293,000.00.

12. 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 avoided and stripped off the Subject Property upon completion of the underlying Chapter 13 Plan. See In re Pence, 905 F.2d 1107 (7th Cir. 1990); Holloway v. U.S., 2001 WL 1249053 (N.D.Ill. Oct. 16, 2001); In re Waters, 276 B.R. 879 (N.D.Ill. 2002); In Re McDonald, 205 F.3d 606 (3rd Cir. 2000); In re Bartee, 212 F.3d 277 (5th Cir. 2000); In re Lane, 280 F.3d 663 (6th Cir. 2002); hire Zimmer, 313 F.3d 1220 (9th Cir. 2002); In re Tannter, 217 F.3d 1357 (11th Cir. 2000); In re Mann, 249 B.R. 831 (1st Cir. BAP 2000); In re Pond, 252 F.3d 1222 (2nd Cir. 2001).

WHEREFORE, for the foregoing reasons, a judgment of default shall be entered in favor of Plaintiff and against Defendant Bank of America, NA, stripping the Defendant's second mortgage on the Plaintiffs' residential real estate.

ENTER

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U.S. Bankruptcy Judge
Veronica D. Joyner #6239246
Joyner Law Office
120 South State Street
Suite 200
Chicago, IL 60603
312-332-9001