Law Office of Allan E. Dunaway, PLC

Supreme Court case causes re-examination of older mortgage case

Kentucky borrowers and those who have had difficult times with their mortgages in an extremely fluid market may be interested in recent developments in a case before the Supreme Court. The case of Bank of America vs. Caulkett appears to have larger ramifications than the specific suit, which concerns whether or not a court of appeals should have allowed Caulkett and one other individual to use bankruptcy to modify of their second mortgages. The Supreme Court appears to be considering the use of this case to overturn a decision from 1992 that now seems deficient.

A reading of 1992's Dewsnup v. Timm shows that it prevents any lower court from stripping the value of an underwater mortgage, or a mortgage that uses a home for security when the home in question cannot be sold for the amount left on the mortgage. Dewsnup does not allow the court to adjust the mortgage to market level, but instead holds the mortgagee to the original value.

When examining the case before it now, the court has shown a strong preference to re-examine Dewsnup and change the rule so that any mortgage that goes through bankruptcy can be brought down to the market cost. This case has many veteran observers of the Supreme Court hesitant, inciting arguments between justices on both sides of the issue.

The assistance of a lawyer may make a difference when attempting to navigate complex bankruptcy filings. Whether the issue is with unusual assets, special circumstances such as second mortgages on underwater properties or other difficult questions, the lawyer may be able to provide useful advice and legal representation when necessary.

Source: Forbes Magazine, "Second-Mortgage Case Has Justices Second-Guessing An Old Decision," Daniel Fisher, March 24, 2015

No Comments

Leave a comment
Comment Information
Contact the Firm

Get Sound Advice In A Free Consultation

For sound bankruptcy advice you can count on, from a skilled lawyer who truly cares about your future, contact the Louisville Law Office of Allan E. Dunaway, PLC. We have two convenient locations: Louisville, Kentucky, and Jeffersonville, Indiana. Our main office in Louisville is located off the beaten path so you won't have to deal with downtown traffic and can pull right up to our door and walk right in.

Call us at 502-785-1005, or send an email message. Our law firm welcomes the opportunity to serve you in any way we can.

If for some reason personal bankruptcy is not for you, if you do not qualify for the Chapter 7 approach via the "means test" and Chapter 13 reorganization is not the answer, Allan E. Dunaway works hard to inform you of other appropriate means of debt settlement that suits your unique needs.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Kentucky Office

Indiana Office

714 Lyndon Lane
Suite 4
Louisville, KY 40222

Phone: 502-785-1005
Fax: 502-412-2258
Louisville Law Office Map

530 East Court Avenue
Jeffersonville, IN 47130

Phone: 502-785-1005
Fax: 502-412-2258
Jeffersonville Law Office Map