Monroe v. Seaway Bank & Trust Co. (In re Monroe)

DECISION

G. MICHAEL HALFENGER, Bankruptcy Judge.

The United States Department of Housing and Urban Development and Seaway Bank & Trust Company hold claims that are secured by junior mortgages encumbering the principal residence of chapter 13 debtors Mark and Sharon Monroe. The Monroes allege — and no one contests — that they owe more to Wells Fargo Bank, N.A., which holds the senior mortgage encumbering their residence, than their residence is worth. The Monroes seek a judgment declaring that (i) HUD’s and Seaway’s claims are “unsecured,” as that term is defined in 11 U.S.C. § 506(a), and (ii)…