Hamilton v. Washington Mutual Bank FA

HARTZ, Circuit Judge.

A bankruptcy trustee, who acts in the interests of the debtor’s general creditors, may acquire for the bankruptcy estate a greater right to a debtor’s real property than the debtor himself had. In particular, if there is a lien on a piece of property, the bankruptcy estate may take the property free of the lien (that is, avoid the lien) if the lien would not bind a hypothetical bona fide purchaser (BFP) of the property from the debtor. On this appeal we must decide whether this rule permits a trustee to avoid a mortgage on the ground that it misstates the lot number in…