Shelly Jones and Warren Gregory Jones, Appellants v. PennyMac Loan Services, LLC, Appellee1 ADDITIONAL CASES In re Shelly Jones and Warren Gregory Jones, Debtors OPINION & ORDER Before the Court is the appeal of Debtors/Appellants Shelly Jones and Warren Gregory Jones (“Debtors”) from an April 26, 2023 Order, (ECF No. 1 at 6-7 (the “April 26 Order”)),2 entered by Judge Cecelia G. Morris of the United States Bankruptcy Court for the Southern District of New York, in the Chapter 13 bankruptcy proceeding captioned In re Jones, No. 23-BK-35048 (Bankr. S.D.N.Y.). The April 26 Order, upon the motion of Appellee PennyMac Loan Services, LLC (“PennyMac”), vacated the automatic stay imposed by 11 U.S.C. §362(a) as to PennyMac’s interest in the Debtors’ property at 32 North Clover Street, Poughkeepsie, NY 12601 (“the Property”).3 For the following reasons, the Bankruptcy Court’s Order is affirmed. I. BACKGROUND On January 20, 2023, Debtors filed a voluntary Chapter 13 bankruptcy petition. (Bankr. Dkt. No. 1.) In the petition, the Debtors valued their assets at $262,484.04 and indicated that they owed $0 to secured creditors and $248,500.19 to unsecured creditors. (Id. at 9.) The Debtors listed PennyMac as a creditor having a priority unsecured claim against them for $222,315. (Id. at 23.) On February 2, 2023, the Debtors filed a Chapter 13 plan (the “Plan”) that provided for payments to the Trustee of $250 a month for 60 months from February 20, 2023 to February 28, 2028. (Bankr. Dkt. No. 15 at 2.) On February 14, 2023, PennyMac objected to confirmation of the Plan, asserting that it was a secured creditor holding a mortgage on the Property; that, at the time of the bankruptcy filing, the loan was in default with total arrears of about $87,089.93; and that the Plan did not provide for the payment of arrears or post-petition payments to PennyMac and therefore could not be confirmed. (Bankr. Dkt. No. 16.) On March 28, 2023, PennyMac filed a motion pursuant to 11 U.S.C. §§362(d)(1), (2) for relief from the automatic stay so that it could pursue foreclosure of the mortgage on the Property in state court. (Bankr. Dkt. Nos. 18, 18-1.) The Debtors opposed PennyMac’s motion on April 21, 2023, and filed a “supplemental opposition” on April 24, 2023. (Bankr. Dkt. Nos. 27, 28).4 The Bankruptcy Court held a hearing on April 25, 2023. (See ECF No. 17-1 (“Tr.”); Bankr. Dkt. Minute Entry dated Apr. 25, 2023.) At the hearing, in response to the allegation that the Debtors had not made the required post-petition mortgage payments, the Debtors did not dispute that fact, but argued that they were still gathering paperwork, that they had complied with the guidelines they had received, that they were working on plan confirmation, and that they disputed that PennyMac was a secured creditor. (Tr. at 4:23-6:23.) The Court explained that because the Debtors had neither made the required post-petition payments or obtained relief from that requirement, she was lifting the automatic stay to allow the state court proceedings to continue, indicating that the Debtors could pursue their dispute about PennyMac’s status as a secured creditor in that court. (Id. at 5:23-7:6.) The next day, the Bankruptcy Court entered a written order granting PennyMac’s motion and vacating the automatic stay. See April 26 Order.5 The record reflects that on May 4, 2015, Shelly Jones executed a note promising to pay $165,487 plus interest to lender Plaza Home Mortgage Inc., in return for a loan. (ECF No. 12-1 (the “Note”).)6 The Note was secured by a mortgage on the Property that was recorded in the Dutchess County Clerk’s Office on May 19, 2015. (ECF No. 12-2.) On April 17, 2019, Plaza Home Mortgage Inc. assigned the mortgage to PennyMac Corp., and PennyMac Corp. assigned it to PennyMac, which assignments were recorded in the Dutchess County Clerk’s Office on May 6, 2019. (ECF No. 12-3.)7 PennyMac is the current holder of the Note as well as the mortgage servicer, (ECF No. 12-4
