J. James Rogan, the trustee in this chapter 7 case, appeals an opinion and order of the bankruptcy court dismissing his complaint. The complaint sought a declaratory judgment to determine the validity, extent, and priority of liens on the real property of the debtor, Elizabeth Collins, held by defendants Litton Loan Servicing, Bank of New York, GMAC Mortgage, and Wilmington Finance. The trustee also appeals an opinion and order of the bankruptcy court granting a motion to vacate the default judgment entered against Wilmington Finance.
The issues raised by this appeal are: (1) whether the bankruptcy court erred in dismissing the trustee’s complaint against GMAC Mortgage pursuant to Federal Rule of Civil Procedure 12(b)(6); (2) whether the bankruptcy court erred in dismissing the trustee’s complaint against Litton Loan Servicing and Bank of New York pursuant to Federal Rule of Civil Procedure 12(c); and, (3) whether the bankruptcy court abused its discretion in vacating the default judgment against Wilmington Finance.
For the reasons set forth, as to defendants Litton Loan Servicing and Bank of New York, the Panel vacates the dismissal and remands the matter for further proceedings to determine who was the holder of the first mortgage on the date of filing, and if it was either Litton Loan Servicing or Bank of New York, then whether either was the holder of a fully and properly indorsed note.
As to defendant GMAC Mortgage, the Panel vacates the dismissal and remands the matter to the bankruptcy court for a determination of the validity and priority of GMAC Mortgage’s lien. As to Wilmington Finance, the Panel affirms the bankruptcy court’s opinion and order vacating the default judgment against Wilmington Finance and dismissing the complaint, because it is clear from the record that when the debtor filed bankruptcy, Wilmington no longer had an interest in that mortgage.