DeGiacomo v. First Call Mortgage Company (In re Reznikov), 548 B.R. 606 (Bankr. D. Mass. 2016) –
A chapter 7 trustee sought to avoid a recorded mortgage based on a defective acknowledgment and then to preserve the lien of the mortgage for the benefit of the bankruptcy estate. The mortgagee objected – arguing that the acknowledgment was sufficient, and the debtor objected – claiming a homestead exemption in the property.
The chapter 7 trustee proposed to use the “strong-arm” powers in section 544 of the Bankruptcy Code to avoid the mortgage. Specifically he relied on section 544(a)(3), which allows the trustee to avoid any transfer that would be voidable by a hypothetical bona fide purchaser of real property.
[BANKRUPTCY REALESTATE INSIGHT]
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