By: Samuel Q. Pittman
Adding to our record of appellate success, the Ninth Circuit Bankruptcy Appellate Panel recently ruled in favor of our client regarding his standing to pursue a claim of equitable mortgage against a predatory lender. Our client brought an adversary case in the Bankruptcy Court against a predatory lender, seeking to have a purported sale of the client’s home declared an equitable mortgage. This case presented the unusual situation where our client held only a beneficial interest in the home, with legal title being held by a family trust. The Bankruptcy Court ruled that because our client did not hold legal title, he lacked standing to pursue a claim of equitable mortgage against the predatory lender. The case law on such situations is limited at best. Nevertheless, our excellent research team located cases in multiple jurisdictions which uniformly hold that the owner of a beneficial interest has standing to assert a claim of equitable mortgage. After consideration of our arguments and the supporting case law, the Bankruptcy Appellate Panel reversed the Bankruptcy Court, ruling that our client had standing and could pursue his claim of equitable mortgage in the Bankruptcy Court. The case is Thorpe v. TJ 12, LLC, BAP No. AZ-18-1330-LBF.
If you, or someone you know, has sought funds to prevent a foreclosure only to be told that you would have to sell your home and take a lease with a repurchase option, you may still have an ownership interest in your home. Contact Ellett Law Offices for a free consultation with one of our experienced Bankruptcy Attorneys. At Ellett Law, we are committed to fight for our clients’ rights, both in and out of the Bankruptcy Law arena.