CNBC
AP reports the Supreme Court said Monday it will decide whether homeowners who declare bankruptcy can void a second mortgage if the home’s market value has dropped below the amount they owe on the first mortgage.
The justices will consider two appeals from Bank of America, which asserts that bankrupt homeowners should not be able to “strip off” a second loan even if they are underwater on primary loans.
Both cases involve Florida homeowners who were allowed to nullify second loans held by Bank of America. The Atlanta-based 11th U.S. Circuit Court of Appeals affirmed both cases, but Bank of America says the rulings conflict with Supreme Court precedent and every other appeals court to consider the issue.
