I have been “Stripped Off” before
The Supreme Court got this one right and it is about damn time. I hate to think about how much money I have been screwed out of over the years. Here is one example:
In 1987 I personally did a second mortgage for someone in order to save their home from foreclosure. No point of debating why I did it, but I did.
Everything was going along just fine for two years and then these people stopped paying and I never pursued starting a foreclosure. I just figured at some point I would get paid whenever these folks sold the property. In 1992 the people filed a chapter 7 bankruptcy. Even though I filed a claim with the court, my second mortgage was stripped away by the BK court as there was no equity in the property. In 1996 the property was sold, sold for a lot more than the first mortgage balance. I got nothing and would have been paid in full.
I can understand that the bankruptcy lets the borrower off the hook from paying, but when they grant the right to eliminate a second mortgage this authority went much too far. That is why the Supreme Court finally got this one right. Below is an article on the topic.
Image courtesy of stuartmiles/freedigitalphotos.net
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Joe Petrowsky, NMLS #6869
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