BK 7 complete; Schedule A, Schedule D and a very confused ME.....

[Bill B.]

Hi, 

I'm doing DD on a note.  The borrower filed BK 7.  The court relieved the borrower from the obligation to pay the mortgage.  However, I've read that this action by the court does not remove the lien that I may purchase.  (I do NOT own the note yet.)

I found the case on Pacer.gov.  The borrower does NOT live in the property that is the subject of the note.  To say it another way, the borrower lives in Georgia and the property is in Michigan.  

Schedule A states that the Debtor's interest in the Property is Fee Simple; Current Value of Debtor's interest in the property is $0; and the Amount of Secured Claim is more than $50k.  So far, so good.  I'm comfortable with Schedule A......unless someone can point out what I've missed.  

Schedule D states describes the property and the "Value of Property Subject to Lien" as $0; Amount of Claim Without Deducting Value of Collateral $50k; UNSECURED PORTION, IF ANY $50K.

So, is the lien in place, or not?

I don't want to buy a note where the lien is invalid.

I appreciate everyone's time and effort.

[Joshua Andrews]

From what you've described it's likely the lien is still in place. If you are serious about buying (preferably after you have reached an agreement with the seller, but before you wire funds), pull title on the property to verify the lien is intact.

My understanding without seeing the actual documents, is what you described is saying there is no equity for the secured lien based on FMV. This does not mean the lien is not in force or un-collectable. Let me know if questions.

Josh