SCOTUS Update

It being a Monday in June, we have Supreme Court decisions.  Four decently big ones came down today, Bank of America vs Caulkett, EEOC v Abercrombie & FitchElonis v US, and Mellouli v Lynch.

The first case (Caulkett) involved whether or not Chapter 7 bankruptcy could wipe out a second mortgage as well as the first when it came to underwater mortgages. In a 9-0 decision, SCOTUS said no dice.

The U.S. Supreme Court on Monday handed a win to Bank of America Corp by ruling that a second mortgage on an “underwater” home – one with a mortgage balance exceeding its current value – cannot by voided during bankruptcy.

On a unanimous vote, the court ruled against two homeowners, David Caulkett and Edelmiro Toledo-Cardona, in Florida, where many homeowners have struggled to pay their mortgages following the recent housing crisis.

Caulkett and Toledo-Cardona had both won before the regional appeals court that oversees Florida. The 11th U.S. Circuit Court of Appeals had ruled that homeowners in Chapter 7 bankruptcy can void – or in bankruptcy terms “strip off” – a second mortgage when the debt owed to the holder of the first mortgage is more than the property’s current value.

SCOTUS didn’t buy that argument in the least, with Clarence Thomas writing the opinion.  Things went a little better in the EEOC case:

The US Supreme Court on Monday ruled against Abercrombie & Fitch in a dispute over its decision not to hire a 17-year-old Muslim girl who wore a headscarf that would have violated the store’s notorious “look policy.”

The dispute centered on a federal law that requires employers to “reasonably accommodate” workers’ religions or disabilities. The Equal Employment Opportunity Commission (EEOC) had sued on behalf of Samantha Elauf, who wore the offending head scarf to her Abercrombie interview.

In an opinion written by Justice Antonin Scalia, the high court ruled that job applicants don’t need to show that an employer knew that a job applicant needed special accommodation for their religious beliefs in order to claim they were treated differently because of those beliefs.

“Abercrombie’s primary argument is that an applicant cannot show disparate treatment without first showing an employer had ‘actual knowledge’ of the applicant’s need for accomodation. We disagree,” Scalia wrote.

That one was 8-1 with Thomas a partial dissent.  Then there was Elonis v US, the so-called “Facebook threats case“:

The Supreme Court has reversed the conviction of a Pennsylvania man who said violent messages he posted on Facebook were therapeutic, not true threats. Anthony Elonis was arrested by the FBI, which had been monitoring his posts.

At issue is the standard by which a lower court viewed rap lyrics and messages from Elonis, who often posted graphically violent language along with disclaimers that he was merely asserting his First Amendment rights.

As we reported last year, Elonis began posting violent messages after his wife of seven years left him in 2010. The messages he posted to Facebook prompted Elonis’ now ex-wife to get a state protection order against him, and led his bosses to fire him from his job at an amusement park.

Elonis was charged with threatening his wife, a kindergarten class, and law enforcement officers — including a female agent who visited his house to question him. All were subjects of rap-style lyrics he posted to Facebook, under the pseudonym Tone Dougie.

A jury convicted him on those counts, and Elonis was sentenced to more than three years in prison.

SCOTUS tossed that conviction 7-2, Chief Justice Roberts on the opinion there, with dissents from Alito and Thomas.  Finally in Mellouli, the Supremes overturned a drug conviction case for a Tunisian man that led to deportation:

The Supreme Court has overturned the deportation of a Tunisian man whose crime was possessing drug paraphernalia.

Mones Mellouli was deported after he pleaded guilty to the minor drug crime in Kansas state court. The item in question was a sock that contained four pills of the stimulant Adderall.

Justice Ruth Bader Ginsburg wrote for the court Monday that federal law does not authorize deportation for such a minor offense.

That one went 7-2 with RBG on the opinion, Thomas and Alito dissenting.

Hash it out in the comments and all that.






52 replies
  1. 1
    patrick II says:

    If I was a lawyer who won a 7-2 decision “with Thomas and Alito” dissenting, I would be proud.

  2. 2
    Valdivia says:

    I was wondering about the Facebook threats case, since it seemed to give a pass to all the threats women suffer on FB, Twitter, etc. But this article in the New Yorker made it sound more like a threat against free speech if it had gone the other way.

  3. 3
    CONGRATULATIONS! says:

    I was wondering about the Facebook threats case, since it seemed to give a pass to all the threats women suffer on FB, Twitter, etc. But this article in the New Yorker made it sound more like a threat against free speech if it had gone the other way.

    @Valdivia: Freedom of speech sometimes involves some rather nasty compromises. You are exactly right: the decision gives a pass to anyone and everyone who uses the internet to threaten people (note: companies can still ban users who do this evil shit, a lot more will do precisely that, and that can’t be touched by the courts). Had it gone the other way, it would have given carte blanche for the government to regulate internet speech, period.

  4. 4
    sparrow says:

    @CONGRATULATIONS!: Yeah, I mean, this guy still lost his job, and the wife still got her restraining order. Those things haven’t changed, right? And Facebook could also suspend this guy. You just can’t throw him in jail. Sounds about right, I guess.

  5. 5
    Bobby B. says:

    The Bank of America Corp saved by the Supreme Court Corp.

  6. 6
    Calouste says:

    Good to see decisions go 9-0, 8-1, and 7-2 instead of 5-4.

  7. 7
    Valdivia says:

    @CONGRATULATIONS!: when I first read about the decision it was from a women’s organization deploring it so I assumed it was the usual conservative wing of the court messing up, but after seeing a few more articles I can see that it’s exactly as you say. Seems also they went rather narrow on the decision.

  8. 8
    a hip hop artist from Idaho (fka Bella Q) says:

    @patrick II: I concur.

    @Valdivia: I wasn’t too worried as it just got sent back for further consideration. And I believe upholding the conviction would have been a severe blow to 1st Amendment rights.

    Please shoot me now; I just agreed with Roberts, Scalia and Alito (in part).

  9. 9
    Valdivia says:

    @a hip hop artist from Idaho (fka Bella Q): yes, on closer examination it looks like the right decision.

  10. 10
    a hip hop artist from Idaho (fka Bella Q) says:

    @a hip hop artist from Idaho (fka Bella Q): @Valdivia: And by blow I mean injury. Just in case that wasn’t clear.

  11. 11
    I'mNotSureWhoIWantToBeYet says:

    @Bobby B.: On the bankruptcy thing: IANAL, but it seems to me that if we want bankruptcy to be able to discharge things like first and second mortgages, then we need to write the laws so that that is possible. It’s comforting to think that the USSC can “do the right thing” when it comes to blatantly unfair rules (the whole point of bankruptcy is to give people a chance to start over with a clean slate, after all), but Congress has written the rules the way they are and they’re the people to change them.

    My $0.02.

    Cheers,
    Scott.

  12. 12
    satby says:

    Anyone get the reasoning behind the Bank of America case? If the mortgage is underwater, why can a first be wiped out but not a second? There’s no equity at all.

  13. 13
  14. 14
    I'mNotSureWhoIWantToBeYet says:

    @satby: The decision is here (9 page .PDF). It seems to be based on the reasoning used in previous bankruptcy decisions. They apparently weren’t willing to change the interpretation of some important terms due to the possible consequences.

    Congress needs to fix it, but I doubt that they will for a long time (if ever).

    Cheers,
    Scott.

  15. 15
    Jamey says:

    A “partial dissent” from Justice Thomas goes like this: “I have no idea what you’re talking about, but I don’t like it.”

  16. 16
    Woodrowfan says:

    The Facebook one made me uncomfortable, but I trust the judgement of RBG and Sotomayor.

  17. 17
    Alex S. says:

    I like how they give the easy ones to Clarence Thomas.

  18. 18
    shell says:

    @Jamey: “Whatever it is, I’m against it!”
    Groucho Marx

  19. 19
    Bobby Thomson says:

    Again showing that Alito never met a conviction he didn’t like and that people who criticize Thomas as a lackey have no idea what they’re talking about. Say what you will about Thomas’ approach to statutory interpretation, at least it’s an ethos.

  20. 20
    Nylund says:

    @patrick II: When a ruling goes 7-2 with Thomas and Alito dissenting I tend to believe it’s even a more correct ruling than one that went 9-0.

  21. 21
    shortstop says:

    @Bobby Thomson:

    Again showing that Alito never met a conviction he didn’t like

    This should frighten people more than it seems to.

  22. 22
    Felonius Monk says:

    @Jamey:

    A “partial dissent” from Justice Thomas goes like this: “I have no idea what you’re talking about, but I don’t like it.”

    A full dissent by Justice Thomas goes like this: “I have no idea what you’re talking about, but I really don’t like it.”

  23. 23
    yet another jeff says:

    Also good to see that SCOTUS doesn’t believe that socks are drug paraphernalia..although I’m not sure it’s safe yet to have socks, water bottles, and glowsticks at the same time…

  24. 24
    rikyrah says:

    Thanks for the recap, Zandar.

  25. 25
    Marcelo says:

    @Woodrowfan: At issue in the FB one is the assertion that the violent words he posted were rap lyrics. They weren’t just the basic Twitter threat “I’m gonna kill you bitch” coming direct from the mouth. This guy would go home after the day and use it as a form of creative journaling, turning his inner thoughts into rap lyrics as part of an alter ego, and the argument is that that kind of expression is not intended as a serious threat, which I think has merit. It should be more protected than the random things I say as myself directly through Twitter or whatever.

    To rule against the guy would be to put people who post paintings, films, poems, risque jokes, provocative statements, etc. online at risk for all sorts of legal issues, as it destroys the line between what you say as yourself and what you say as part of your art, which may not be from the POV of you.

    So if you’re on twitter threatening female gamers, you’re still liable for that shit, because it’s just you saying it, as opposed to part of an art project or rap album or whatever.

    IANAL, of course.

  26. 26
    jonas says:

    @satby: That was precisely where the hang-up was. If the debtors are underwater with regard to the first mortgage, but not necessarily the second, can a bankruptcy judge also write off the second? (e.g. you owe $100,000 on a first, $25,000 on a second, but the house is only worth $90,000 — that’s less than the first, but more than the second). Based on a very narrow parsing of the word “secured” and some case precedent, they court said no.

  27. 27
    Valdivia says:

    Scalia, being Scalia. A classic:

    RBG always uses the generic female pronoun. Today, Scalia uses generic male pronoun in case where plaintiff is female pic.twitter.com/nNtyetWKIe— Irin Carmon (@irin) June 1, 2015

  28. 28

    @Bobby B.: I was just thinking, what happens now? If I was bloody stupid enough to let BofA into my financial life, and I lose everything in bankruptcy, does BofA come and tatoo my face with the appropriate bar code? Clap me in chains and drag me off to the work farm? Harvest my kidney(s) and other useful organs until the balance is paid?

    With BofA’s history, it’s likely all three.

  29. 29
    Starfish says:

    If they dismiss the second mortgage, then it is going to be harder for people to get second mortgages because it is going to be easier for people to double mortgage their house to the max. And banks would not be up for that risk.

    I am not sure if the The New Yorker argument sways me on the case of the threatening lyrics. “Think of all the horrible things that PETA won’t be able to say” is just not that compelling.

  30. 30
    KG says:

    @BruceFromOhio: nah, they just assign you to customer service… first you have to deal with customer service, then you become customer service…

  31. 31
    fuckwit says:

    @Nylund: 6-3. You forgot Scalia.

  32. 32
    KG says:

    @jonas: part of the problem is the way second mortgages were used during the bubble. traditionally, seconds were HELOC’s (Home Equity Lines of Credit), essentially a credit card/bank account using equity in your home as collateral. during the bubble, the way we ended up with “zero down” home purchases is that mortgage brokers (who deserve a great deal of the blame for the bubble, based on my experience litigating a lot of these cases) got creative and would broker a traditional mortgage as the first for, say 80% of the value of the home, they would then do a HELOC as a second mortgage for the remaining 20% and cash it out completely to cover the cost of the original transaction. the other way they would structure the seconds was as balloon payment mortgages – traditionally used by contractors and/or flippers for short term projects (as an example, I buy the house with a mortgage that has a balloon payment in 5 years, but I’m rehabbing the house and plan to sell in less than a year, so the balloon payment doesn’t matter because I’ll be out before then). the second element of the balloon payment scheme was “well, real estate always goes up, and based on the way the market is, we can refi you in 4 years and even get you a lower interest rate.” in either case, because buyers had zero equity in their new homes, they had no cushion should the market turn – which it does, about once a decade or so. and this time it happened to be even worse because the mortgage shenanigans drove up home prices well beyond what they should have been and the banks didn’t want to admit they made mistakes (or that the market was irrational), so they were refusing to take the losses they should have (probably doesn’t help that most of the big ones were publicly traded, meaning shareholder revolts).

  33. 33
    Omnes Omnibus says:

    @Calouste: The majority of cases heard by the Court are decided by lopsided numbers. It is only a few cases that end up as 5-4 – they just tend to be the ones that get attention.

  34. 34
    Marcelo says:

    Three examples of online speech that probably would not fall under this protection, using a generic Gamergate-style threat as an example:

    1) @mentioning someone on Twitter/FB before you say your threatening language – “@feministperson I’m gonna kill you”

    2) Writing on someone else’s wall instead of your own – “Hey Feminist Person I know where you and your family live”

    3) Mentioning specific names “Hey Jane Q Feminist, I’ll kill you”

    In addition to not doing any of these things, Elonis also disclaimed his posts as poetry/rap/stream of consciousness/not realistic when he wrote them. He wrote them on his own page, disclaimed them as not reflective of his true intentions, and didn’t go harass other people in a public forum like Twitter or whatever – it was on his own page.

    If this isn’t protected as some form of semi-public journaling, what is?

  35. 35
    shortstop says:

    @Valdivia: Under all the pomp and prestige, his emotional age is 14.

  36. 36
    Bruce Webb says:

    I don’t think this is right:
    “The first case (Caulkett) involved whether or not Chapter 7 bankruptcy could wipe out a second mortgage as well as the first when it came to underwater mortgages.”

    I don’t think bankruptcy actually wipes out a first mortgage. In some States there are Homestead provisions that might protect you from involuntary foreclosure but I don’t think they just give you full title unencumbered by that mortgage. On the other hand it might well be worth your while to just let the house go to the first lender knowing that they have no further security interest beyond that. As to second mortgages a lot would depend on whether or not you were living in a “no recourse” State. Under “no recourse” a second mortgage holder cannot pursue you beyond the equity in your house. That is bankruptcy or not if you are under water to the holder of your first mortgage and they take your house in foreclosure you have no further obligation under the second mortgage, instead they can try to pursue a claim against the first bank.

    As someone who lost a house and stiffed a second bank for $50,000 I can’t say that this result is unfair. Because you don’t want to allow people to game the system by taking out a second and paying down the first to the level that they have a homestead exemption and THEN declaring bankruptcy to wipe out the second. From what I see in this case the Court is simply saying that the holder of the second mortgage retains a security interest in your house and any equity. Something that in “no recourse” States you can dodge simply by giving up the house. Now I would have to think about how this would work in States that are NOT “no recourse”. The moral judgement might work in a different way. On the other hand it would make people think twice about just taking out a second because they can and because they want a boat or a trip to Vegas. While the majority of the responsibility for the housing crash of 2007-08 belongs to the banks we shouldn’t just give a free pass to the people who confused ‘equity’ for ‘income’ and financed consumption not actually supported by month to month earnings.

  37. 37
    Botsplainer says:

    @Bruce Webb:

    I’m an occasional bankruptcy practitioner.

    In bankruptcy law, you can “strip” a non-purchase money second mortgage if it impairs the exemption that the debtor would otherwise be able to take if the debtor has equity and and above the value of the first mortgage, on the theory that refusal would deprive that debtor of a fresh start. There was a catch in this case, as there was no equity to impair, which the statute is not written to cover.

  38. 38

    @Marcelo:

    As long as the person or people who feel threatened are still allowed to get a restraining order against any direct contact, I’m okay with the court decision. If someone is able to use this decision to argue that their target isn’t allowed to get a restraining order that prevents the person from contacting them directly because of free speech, then that becomes a problem.

  39. 39

    According to Wonkette, the guy who won his free speech case has been convicted of domestic violence for punching his new girlfriend’s mother:

    http://wonkette.com/587119/sco.....ust-a-dick

    He seems nice.

  40. 40
    Brachiator says:

    @CONGRATULATIONS!: I will have to read the full opinion in the Facebook case. The idea that violent messages focusing on a particular person could be therapeutic but not violent does not pass the smell test.

  41. 41
    Brachiator says:

    @Calouste:A 2014 article about the Court noted the following:

    In their public appearances, the justices often complain that the press focuses on closely divided cases and not on the many unanimous ones. The court is indeed often united, and it will end this term with unanimous decisions in more than half of its cases. Over the past four terms, even the members of the court least likely to agree voted together 66 percent of the time.

    But this was a little surprising, about the rulings of specific justices:

    Justice Breyer is by many measures more conservative than the court’s three other liberals. He was more likely to vote with Chief Justice Roberts, Justice Kennedy, Justice Thomas or Justice Alito than any of the other liberals. But there was one stark and telling exception: Justice Breyer was less likely than any of the other liberals to vote with Justice Scalia. Those two justices often tangle at oral arguments and often have differing views of privacy rights, with Justice Scalia joining the court’s liberals in Fourth Amendment cases and Justice Breyer voting the other way.

  42. 42
    Keith G says:

    Doing a deeper read into the SCOTUS Blog coverage, I notice that in opposing the drug paraphernalia majority decision, Clarence Thomas is using a version of the Chevron deference in reference to statutory interpretation. The immigration court and Board of Immigration Appeals ordered the petitioner deported based on its reading of statute and Thomas thinks that deference should be paid to the agency interpretation.

    Hmmm……In King v Burwell, SCOTUS is reviewing a Fourth Circuit decision which had at its root a Chevron defense which was used to reject a challenge to the Affordable Care Act.

    I have a feeling that I will soon be reading that Associate Justice Thomas has lost his love for “Chevron”.

  43. 43
    someguy says:

    Honest to fuck.

    You keep your first mortgage in Chapter 7 bankruptcy. It is secured by the house you live in. Now they’re making it clear you keep your second mortgage too, it is also secured by the house you live in.

    This isn’t screwing the consumer so much as it is scewing the bank that holds your first mortgage. It is now forced to negotiate the workout with the bank holding the second mortgage, because there’s not enough equity in the home to work out an appropriate, pro-rated pair of payments to the two banks.

    As a Title 7 filer, you probably aren’t going to have any more, or any less money to play with, the court will have a percentage figure of your income that can go to housing, and it goes to the mortgage holder. It’s just that the money the court has decided you can afford to pay the bank, and the overall amount that is going to get written down (the loss borne by the banks between them) is going to be prorated between Bank 1 and Bank 2 rather than Bank 2 bearing a 100% loss, and Bank 1 bearing a much lower percentage of the loss. This is kind of a routine decision about the seniority – the collection rights – of secured creditors. If the decision goes the other way it doesn’t do much for consumers but does screw one set of banks over to the advantage of another set (sometimes the same banks…) and it probably raises the cost of getting a second mortgage, making them less available, particularly for marginal borrowers who might not be to land an unsecured loan in the same amount.

    Or we can just say it’s a conservative court helping the Banksters screw us over yet again, if that helps us sleep at night.

  44. 44
    jonas says:

    @Botsplainer: I think this is right — when the statute was drafted, they weren’t imagining a situation in which all the owner’s equity had been wiped out in a huge real estate crash.

  45. 45
    burnspbesq says:

    @I’mNotSureWhoIWantToBeYet:

    On the bankruptcy thing: IANAL, but it seems to me that if we want bankruptcy to be able to discharge things like first and second mortgages, then we need to write the laws so that that is possible.

    I don’t do bankruptcy law on anything approaching a regular basis, but I know just enough to be dangerous, and you raise a very interesting point that has me wondering whether the debtors made a really bad strategic decision that put them in this mess.

    The theory of the opinion appears to be that the holder of the second doesn’t get its lien wiped out because it holds an “allowed secured claim.” In order to be an allowed secured claim, a claim must be allowed. Bankruptcy Code Section 502 provides a process for the Bankruptcy Court to adjudicate and either allow or disallow claims; a claim is deemed allowed if it isn’t objected to. Did the debtors drop the ball and not object to BofA’s claim? I can’t tell from what I’ve read so far, but if they did, then this is a self-inflicted wound.

  46. 46
    Mathguy says:

    Alito and Thomas….Dumb and Dumber.

  47. 47
    Botsplainer says:

    @burnspbesq:

    Things tend to get stupid in the margins on no-asset cases. In my mind, an alternative decision would lead to a whole lot of opportunity for abuse on bogus 1st money liens.

  48. 48
    dmbeaster says:

    The bankruptcy decision seems to make legal sense. The issue is somewhat arcane and is not some unwarranted gift to banks. Secured loans on residences are never discharged in bankruptcy, but personal liability for the loans is discharged. What that means is that the creditor retains all rights to take value from the property, but loses the right to pursue a deficiency judgment against the debtor post bankruptcy. That means that the debtor cannot improve his situation concerning secured liens by voiding the second lien because there is currently no value to the security interest of the second lienholder. Bank of America will only ever see money if the debtor decides to hold onto the property and service the liens for such a period of time that some value is restored to the second lien.

    Bankruptcy law has never given the debtor a fresh start with regard to assets that are subject to secured debts (with exceptions in commercial cases — “cram down”). This is an old rule. This decision holds that second lienholders with no equity in their collateral are still secured creditors even though as a practical matter, their interest is secured by nothing. It means the debtor cannot use bankruptcy to improve the possible future equity position in his property by voiding junior liens that currently have no value, but once voided would permit the debtor to receive the benefit of future appreciation free and clear of junior liens. The rules dont give the debtor that option, and the decision is what you would expect from traditional policy concerning bankruptcy law.

    The question of allowing some removal of secured liens from residences in bankruptcy was a hot topic during the crisis in 2009, which the banks fought tooth and nail. The Helping Families Save Their Homes Act of 2009 as passed by the Democratic House had such a “cram down” provision for residences, but was stalled in the Senate and ultimately stripped from the bill that passed.

  49. 49
    I'mNotSureWhoIWantToBeYet says:

    @dmbeaster: Thanks for the clear and comprehensive explanation. Much appreciated.

    Cheers,
    Scott.

  50. 50
    A guy says:

    In a chapter 11 a secured creditor only has a lien to the extent on the value of the property. The excess is unsecured for the purposes of a plan of reorganization. Consumer debt is different. You can’t cram down a mortgage lender in a consumer bankruptcy. As a person with significant bankruptcy experience that makes no sense to me. The housing crisis has multiple culprits. Barney Frank started it and the previously enacted changes to the bankruptcy code by the repubs made it worse.

  51. 51
    Ella in New Mexico says:

    The Facebook ruling really reassures me. Because that kind of thinking is already being used by police in ways that stretch people’s rights, push them into corners, and escalate situations.

    My daughter’s 19 year-old friend has an online poetry/fiction/essay journal where he has written some thought-provoking and deeply personal stuff. He’s a gifted and smart kid, well read and very and talented as all his high school and college teachers would tell you.

    Someone turned him in to the local police after he wrote an essay describing his emotions and thought processes–several months before he posted it, by the way–when he decided to drop out of college and his English major indefinitely in order to explore and grow for a while. His fears, his feelings of anxiety. Of letting his parents down after all they had sacrificed for him to be there. His sense that after all he had been told he should do, somehow this was a huge failure on his part. He mentioned how thoughts flash through your mind, like “should I just end it all and be a romantic martyr to my art, or is that just cowardice? If I were to throw myself in front of this bus, right here on this rainy street corner, would that be tragic or just cruel to inflict on the person who’d be responsible?”

    Never once did he intend to do anything, but someone called the cops and they showed up at our house, where he was visiting. A six person team escorted him down our driveway, frisked him, had him sit on the curb. They then interrogated him to “get him to admit he had suicidal ideations”. As things progressed, they then threatened him with arrest for “terroristic threats” (bus reference). They had his site on their smart phones for quotes, and seriously, they didn’t understand half of the words he wrote and clearly have never read the Kurt Vonneguts or the Hunter S. Thompsons or the Allen Ginsbergs or the Jack Kerouacs of the world. The whole time he just calmly denied and tried to explain, but at some point, no matter what he said it was being used against him.

    It took his parents, my husband and I about two hours to convince the a-holes that he was merely being a creative writer, dramatic yes, but a threat, no. We instructed him to stop trying to explain and to STFU, too, as it was clearly not helping him. In the process WE were threatened with possible arrest, and were repeatedly told to go back inside, and mind our business. Yeah, no, not in my driveway, sonny, was my basic response. Eventually they left, but that whole episode freaked the hell out of me.

    So if that happened in a small city like mine, I am betting it’s going down elsewhere way too often.

  52. 52
    Citizen Alan says:

    @satby:

    Anyone get the reasoning behind the Bank of America case? If the mortgage is underwater, why can a first be wiped out but not a second? There’s no equity at all.

    The senior lien can NOT be wiped out, but prior to this opinion, the junior lien could if there was no remaining equity. Now, neither lien can be wiped out.

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