Jack B. Schmetterer
NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
Chapter 13
Judge
FINDINGS OF FACTS AND CONCLUSION OF LAW
Following entry of default and taking all allegations of the Complaint to Determine the Nature and Extent of Lien and Avoid Junior Mortgage confessed against Chase Home Finance, f/k/a/ Washington Mutual Bank ("Defendant"), the following Findings of Fact and Conclusions of Law are made and will be entered.
FINDINGS OF FACT
1. The Plaintiffs, Raja and Shaheen Hussain ("Plaintiffs"), are individuals residing at 1956 Angelica Lane, Bartlett, Illinois 60103.
2. The Defendant is a mortgage lender.
3. The Plaintiffs filed for relief under Chapter 7 of the United States Bankruptcy Code on June 30, 2010, and assigned to case number 10 B 29456. The Plaintiffs' case later converted to Chapter 13 on February 24, 2011.
4. Plaintiffs are the owners of real estate (hereafter referred to as the ("Property") for the real estate commonly known as 1956 Angelica Lane, Bartlett, Illinois 60103, and legally described as follows:
LOT 121 IN HERONS LANDING UNIT TWO, BEING A SUBDIVISION OF PART OF THE SOUTH HALF OF SECTION 30 AND PART OF THE NORTH HALF OF SECTION 31, ALL IN TOWNSHIP 41 NORTH, RANGE 9, EAST OF THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT THEREOF RECORDED NOVEMBER 17, 2001 AS DOCUMENT NO. 0432227018 IN COOK COUNTY, ILLINOIS. PIN: 06-30-403-016-0000
5. The fair market value of the property at the time Bankruptcy Case 10 B 29456 was converted to Chapter 13 was $398,000.00.
6. The Defendant, Chase Home Finance, f/k/a Washington Mutual Bank, holds a first mortgage against the Property in the amount of $517,142.00.
7. The Defendant, Chase Home Finance, f/k/a Washington Mutual Bank, holds a junior mortgage against the Property in the amount of $48,754.00.
8. The Plaintiffs seek through their Chapter l3 Plan to determine the nature and extent of the junior mortgage of Chase Home Finance, f/k/a Washington Mutual Bank, and to void its junior mortgage lien.
9. The estate's secured interest in the Property is valued at $398,000.00, and is more than fully encumbered by the Defendant's first mortgage of $517,142.00.
10. The estate has no equity in the Property to secure the Defendant's junior mortgage of $48,754.00.
CONCLUSIONS OF LAW
1. This Adversary Proceeding is brought pursuant to the Federal Rules of Bankruptcy Proceedure 7001 and 11 U.S.C. §§506 and 1327.
2. This Court has jurisdiction over this proceeding pursuant to 28 U.S.C. §§1334 and 157, and this action relates to the Bankruptcy Case 10 B 29456.
3. Venue is proper pursuant to 28 U.S.C. § 1409. This is a core proceeding as defined by 28 U.S.C. §157.
4. Under 11 U.S.C. §506, the junior mortgage of Chase Home Finance, f/k/a Washington Mutual Bank would be an allowed secured claim to the extent of the value of the estates's interest in the property securing the claim, but it is void to the extent it is not a secured claim.
5. Because the junior mortgage held by Chase Home Finance, f/k/a Washington Mutual Bank is wholly unsecured, it should not be allowed as a secured claim and it may be stripped off.
6. Upon confirmation and completion of the Debtors' Chapter 13 Plan, and entry of discharge in Bankruptcy Case 10 B 29456, the junior mortgage by Chase Home Finance, f/k/a Washington Mutual Bank will be null as being wholly unsecured.
7. Chase Home Finance, f/k/a Washington Mutual Bank, will file a release of the junior mortgage within 21 days after entry of discharge in Bankruptcy Case 10 B 29456. Jurisdiction is reserved to enter supplemental orders quieting title to, real estate as to the Junior Lien.
ENTER:
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United States Bankruptcy Judge