The 8th Circuit of Appeals heard arguments on Wednesday March 12 in a case involving whether wholly unsecured junior second mortgages can be stripped in chapter 13 bankruptcy. A ruling will be issued “in due course,” which will likely be 1-3 months.
The case is Minnesota Housing Finance Agency v. Schmidt, Case No. 13-2447. The Schmidts have a $140,000 house, subject to a first mortgage of $154,000, and we proposed a chapter 13 plan whereby the second and third mortgages would be stripped of their secured status, and paid a nominal dividend as unsecured creditors. The bankruptcy court and federal district court had found in my favor. All other circuit appellate courts have ruled on our side as well.
Thanks to all my lawyer friends and colleagues who showed up to watch the oral arguments, and thanks for all your supportive comments. Here is what they had to say:
“Tim, you did a great job arguing on behalf of all Americans living in this circuit who have junior mortgages with no real secured status. Bravo!”
“Tim, I just listened to your argument. It was fantastic. Great job! “
“You did a nice job, Tim. Well done.”
“Tim rocked the house today. I don’t think we have anything to worry about with the 8th Circuit going rogue with their ruling. “
“I concur: Tim hit a home run. The Judges seemed very receptive to his presentation, particularly Judge Kelly. They asked Tim a whopping zero questions, probably because Tim’s presentation was so good.”
“Excellent job today, Tim! Very well done!”
“Tim did the good presentation, and coverage. He clearly should win.”
Click below for my oral arguments (it’s a bit over 5 minutes long; they allowed me 15 minutes, and didn’t ask me any questions). Not asking me any questions will hopefully tip their hat that they agreed with me.