Legal Question in Real Estate Law in District of Columbia

Four years ago I loaned nephew $40K to remodel his home in Washington D.C. At the suggestion of his attorney, a SECURED NOTE was drawn up and signed.

Since then, my nephew moved to Maryland, filed for divorced and subsequently filed for bankruptcy. He was granted the house in the divorce settlement but has failed to pay either the primary mortgage or the above mentioned note.

The trustee has petitioned the bankruptcy court to sale my nephew's home in DC despite it being occupied by his ex-wife (who�s was also a signor on the existing primary mortgage but who has not filed bankruptcy) and children.

There is more than enough equity in to payoff both the primary mortgage and the nearly 40k owed to me. The lender for the primary mortgage is listed as a creditor on my nephew's bankruptcy petition. But for reasons unknown to me, I am not listed as a creditor on the petition.

Question:

The note signed by my nephew states upon noticde of default ...�the borrower shall immediately convey full title of said proprety to the lender and grant to lender the irrevocable power to sell said property without further notice or consent of borrower for the satisfaction of all secured by said property �.

If the property is conveyed to me upon default, can I claim ownershipt?

If I have the right to sell the property as stated, do I have to notify or seek approval of the court?

Who should I hire to best to address this issue a ... bankruptcy attorney or real estate attorney familiar with defaults?


Asked on 7/12/11, 6:46 pm

2 Answers from Attorneys
Phillip M. Cook Cook Legal Services, LLC

You need to hire a bankruptcy attorney ASAP. Most bankruptcy attorneys have real estate experience.

Best of luck.*****The above is for informational purposes and does not create an attorney-client privilege.******

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Answered on 7/12/11, 6:56 pm
Daniel Press Chung & Press, P.C.

You need a bankruptcy lawyer, such as ourselves, who practices in DC (and Maryland if that's where the case is pending). The question here is whether there was anything recorded in land records to perfect your security interest, or whether there might be a claim to equitable title that would trump the trustee's claim (which is unlikely). You also need to make sure that you have a proper proof of claim filed in the bankruptcy case.

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Answered on 7/13/11, 9:09 am


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