Edwin Rigoberto Hernandez

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
RALEIGH DIVISION
IN RE:
EDWIN RIGOBERTO HERNANDEZ,
DEBTOR.
CASE NO. 11-03788-8-JRL
CHAPTER 7
ORDER
This matter came before the court on PHH Mortgage Corporation’s (“PHH Mortgage”)
motion for relief from stay. A hearing was held on August 25, 2011 in Raleigh, North Carolina.
On May 16, 2011 Edwin R. Hernandez (“debtor”) filed a voluntary petition under chapter
13 of the Bankruptcy Code. The debtor’s case was later converted to chapter 7. PHH Mortgage
filed a motion for relief from automatic stay on August 3, 2011. The debtor holds title to real
property located in Wake County, Raleigh, North Carolina (“the property”). PHH Mortgage
contends the debtor executed a promissory note secured by a deed of trust on the property in
favor of PHH Mortgage. In addition, PHH Mortgage contends that insignificant equity exists in
the property and the debtor has defaulted on his mortgage payments pursuant to the terms of the
note. The promissory note and deed of trust attached to PHH Mortgage’s motion state the lender
is ERA Mortgage. Deborah C. Johnson, senior complex specialist for PHH Mortgage, testified
SO ORDERED.
SIGNED this 30 day of August, 2011.
________________________________________
J. Rich Leonard
United States Bankruptcy Judge
____________________________________________________________
Case 11-03788-8-JRL Doc 40 Filed 08/30/11 Entered 08/30/11 15:12:14 Page 1 of 2

2
by affidavit that the promissory note concerning the debtor was assigned to Bishops Gate
Residential Mortgage Trust.
The debtor argues PHH Mortgage lacks standing to seek relief from the automatic stay
when PHH Mortgage is not a real party in interest. Pursuant to 11 U.S.C. § 362(d) “[o]n request
of a party in interest and after notice and a hearing, the court shall grant relief from the stay[.]”
The term “party in interest” is not defined in the Code. “When interpreting the meaning of Code
terms such as ‘party in interest’, [the court is] governed by the Code’s purposes.” In re
Comcoach Corp., 698 F.2d 571, 573 (2d. Cir. 1983) (citing Kokoszka v. Belford, 417 U.S. 642,
645-46, 94 S.Ct. 2431, 2433-34 (1974)). Bankruptcy courts provide a forum for creditors and
debtors to settle their disputes. Id. Therefore, PHH Mortgage “must be either a creditor or a
debtor to invoke the court’s jurisdiction.” Id. The Code defines “creditor” as an “entity that has
a claim against the debtor that arose at the time of or before the order for relief concerning the
debtor.” 11 U.S.C. § 101(10)(A).
PHH Mortgage is not a party in interest since PHH Mortgage is neither a debtor nor
creditor in this case. Edwin Hernandez, not PHH Mortgage, is the debtor in this case. PHH
Mortgage is also not a creditor of the debtor because the promissory note and deed of trust at
issue name ERA Mortgage, not PHH Mortgage, as the lender. In addition, PHH Mortgage’s
interest in the note and deed of trust were assigned to Bishops Gate Residential Mortgage Trust.
PHH Mortgage has failed to prove it is the debtor’s creditor. Therefore it is not a party in
interest and lacks standing to seek relief from the automatic stay.
Based on the foregoing, the motion for relief from stay is DENIED.
END OF DOCUMENT
Case 11-03788-8-JRL Doc 40 Filed 08/30/11 Entered 08/30/11 15:12:14 Page 2 of 2