Lien Stripping a Junior Mortgage: Have Your Expert Ready

When stripping a junior mortgage, make sure that you have an expert witness available to testify. In a recent case before Judge Cox, a junior lien was stripped, despite the fact that the evidence showed that most comparable properties values would have prevented the stripping. The debtor was able to convince the court because of the expert testimony of one witness. The creditor attorney was able to effectively cross examine the expert; however, without an expert of its own, the creditor was at a tremendous disadvantage.

The court relied upon the debtor’s expert and found the home value to be less than the surrounding properties. It only took one property out of ten to fall within that low value. That one property was enough to convince the court. Thus, creditors must be prepared to provide an expert when significant dollars are at stake. A four or five hundred dollar expert fee may save forty or fifty thousand dollars in the long run…

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