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residence," does not apply if the debtor's principal residence only encroaches on the mortgaged property. Debtor mistakenly built a house that straddled the property line between a lot the debtor owned and a lot her did not own. Debtor mortgaged the property he owned to bank, and the bank's title work did not disclose that the majority of the house was not on the mortgaged property. Debtor's Chapter 13 plan sought to bifurcate bank's claim into secured and unsecured portions, with the secured portion, based on the appraised value of the lot on which a small portion of the house sat, worth only a fraction of the amount loaned. Although a portion of debtor's principal residence encroached on property in which the bank held a security interest, the property was not the debtor's principal residence. The policy behind the anti-modification provision of § 1322(b)(2) was to benefit the residential mortgage market, but here the lender had failed to exercise reasonable due diligence before making the loan.)
Scarborough v. Chase Manhattan Mort. Corp. (In re Scarborough), 461 F.3d 406 (3d Cir. Aug. 28, 2006) (Bifurcation of claim secured by multi-unit dwelling does not violate anti-modification provision of § 1322(b)(2). The collateral was a two apartment property. The debtor lived in one unit and rented the other. Section 1322(b)(2) only protects claims secured by real property that is the debtor's principal residence. Since the claim was secured in part by real property that was not the debtor's principal residence, the claim could be bifurcated.)
Internal Revenue Svc. v. White (In re White), ---F.3d ----, 2007 WL 1176232 (4th Cir. Apr. 23, 2007) (Surrender of collateral under § 1325(a)(5)(C) occurs when the debtor relinquishes all rights in property, including the right to possession. Internal Revenue Service filed a pre-petition tax lien against Chapter 13 debtor's assets. Debtor proposed to partially satisfy lien by surrendering certain apparel and household goods that were exempt from administrative levy under the Internal Revenue Code. In the absence of actual physical turnover of the property, this did not constitute "surrender" because the IRS would have to engage in additional litigation before it could execute on the property offered by the debtor.)
In re Layo, 460 F.3d 289 (2nd Cir. Aug 15, 2006) (Trustee precluded to challenge mortgage due to res judicata effect of confirmation of Chapter 13 plan affirming validity of mortgage. Plan determined parties' interests pursuant to § 1327(a), notwithstanding separate procedures for determining validity of lien pursuant to Bankruptcy Rule 7001(2) and regardless of delay of discharge in Chapter 13 case until all plan payments are made.)
Ajaka v. BrooksAmerica Mort. Corp., 453 F.3d 1339 (11th Cir. June 29, 2006)
