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In Re: Patricia Nieto, Debtor. v. Patricia Nieto

November 28, 2012

IN RE: PATRICIA NIETO, DEBTOR. BAC HOME LOANS SERVICING, LP F/K/A COUNTRYWIDE HOME LOANS SERVICING, LP, APPELLANT,
v.
PATRICIA NIETO, APPELLEE.



Appeal from the United States Bankruptcy Court for the District of Nevada Honorable Bruce A. Markell, Bankruptcy Judge, Presiding Bk. No. 09-26688

SUSAN M SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT

MEMORANDUM*fn1

Submitted Without Oral Argument on November 15, 2012*fn2

Filed - November 28, 2012

1 Before: JURY, PAPPAS, and DUNN Bankruptcy Judges.

3 BAC Home Loans Servicing, LP ("BAC") appeals the bankruptcy 4 court's determination of Debtor Patricia Nieto's ("debtor") 5 principal residence pursuant to 11 U.S.C. § 1322(b)(2)*fn3 , arguing 6 that the pertinent date for determining principal residence is 7 the loan origination date. The bankruptcy court held that plan 8 confirmation was the proper date for determination of a debtor's 9 principal residence. While this appeal was pending, this Panel 10 decided that the petition date was the correct date for 11 determination of a debtor's principal residence. Benafel v. One 12 West Bank, FSB (In re Benafel), 461 B.R. 581 (9th Cir. BAP 13 2011). While the bankruptcy court applied an incorrect legal 14 rule to resolve the issues in this appeal, because we agree with 15 the outcome, we AFFIRM.

I. FACTS

17 Debtor's ex-husband purchased the residence at 816 Orr 18 Avenue, North Las Vegas, Nevada in February 1990. Debtor began 19 to occupy the residence at that time. In June 2000, as a result 20 of her divorce, debtor's ex-husband transferred title of the 21 residence to debtor as her sole and separate property. In April 22 2006, debtor refinanced the residence with SFG Mortgage. BAC is 23 successor in interest to SFG Mortgage.

On June 1, 2006, debtor purchased a second residence at 25 5308 Coleman Street, North Las Vegas, Nevada ("Coleman 1 Property"). Shortly thereafter, debtor moved into the Coleman 2 Property and began to rent out the residence. On September 6, 3 2009, debtor filed for bankruptcy. On the petition date, debtor 4 resided in the Coleman Property.

5 On September 9, 2009, debtor filed her Chapter 13 plan. 6 BAC objected to debtor's plan on grounds that the value of the 7 residence stated in the plan was too low and that the plan 8 failed to provide any evidence of value. On December 31, 2009, 9 debtor filed a Motion to Value Collateral for the residence.

10 Debtor sought to reduce BAC's secured claim to the appraised 11 value of the residence. BAC opposed the motion, contending the 12 residence was debtor's principal residence exempt from 13 modification pursuant to § 1322(b)(5). BAC argued that a 14 debtor's principal residence is determined on the date the 15 creditor takes an interest in the property, and because debtor 16 listed the residence as her principal residence when she filled 17 out her loan application in 2006, BAC's contractual rights were 18 exempt from modification pursuant to § 1322(b)(5).

19 On October 25, 2010, the bankruptcy court granted debtor's 20 Motion to Value Collateral, holding the critical date for 21 determining a debtor's principal residence under § 1322(b)(5) is 22 the plan confirmation date. On March 1, 2011, the bankruptcy 23 court issued an order confirming debtor's Chapter 13 plan, which 24 relied in part on the valuation order. BAC timely appealed the 25 bankruptcy court's confirmation order.

26 After BAC and debtor submitted their briefs on appeal, this 27 Panel held in a different appeal that the petition date was the 28 correct date for determination of a debtor's principal 1 residence. Benafel, 461 B.R. 581. BAC and debtor ...


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