The nation’s high court has agreed to hear a pair of cases involving junior liens that were voided by bankruptcy courts because of negative equity.
A bankruptcy court stripped off a second lien owned by Bank of America, N.A., because the first mortgage exceeded the value of the property.
So BofA challenged the bankruptcy court’s order voiding the second lien on the Chapter 7 debtor’s residential property.
But the U.S. District Court for the Middle District of Florida affirmed the bankruptcy court decision.
So the bank then appealed the affirmation with the U.S. Court of Appeals for the Eleventh Circuit. But in May, the appeals court also affirmed the decision.
BofA then asked the U.S. Supreme Court to consider the case as well as a second case.
On Monday, the Supreme Court granted BofA’s petitions for writs of certiorari.
“The cases are consolidated and a total of one hour is allotted for oral argument,” according to the publication of orders in pending cases.
