HAWAII – In a precedent setting move today, a bankruptcy Chapter 7 Trustee filed a Supplemental Objection under a hypothetical lien theory to the Debtor’s Motion to Compel the Trustee to Abandon the underwater property – the day before the hearing.

The Trustee’s pleading states that the lender, American Savings Bank FSB in Hawaii, had not properly perfected the mortgage at the time of the Debtor filing a petition for bankruptcy, the “Mortgage was in fact in favor of MERS as nominee for ASB at the time of the filing of the petition.”  This move essentially strangles the lender. Continue reading →