Vieira v. Pearce (In Re Pearce)

OPINION

KENNETH J. MEYERS, Bankruptcy Judge.

The trustee in this case seeks to avoid, as a preferential transfer, a mortgage that was taken by the defendant bank to finance the debtors’ purchase of real estate within 90 days of bankruptcy but that was not recorded for more than 20 days thereafter. The trustee contends that because of the bank’s delay in perfecting, its mortgage does not come within the “enabling loan” exception to avoidance as a preference, which prohibits avoidance of a purchase money security interest that is perfected within 20 days after the debtor takes possession of the…