In a major victory for lenders, the United States Supreme Court ruled that chapter 7 bankruptcy debtors cannot rid themselves of underwater mortgages. The unanimous decision in Bank of America, N.A. v. Caulkett was memorialized in a June 1, 2015 opinion that squarely addresses the issue of whether, in a chapter 7 bankruptcy liquidation, a debtor may void a junior mortgage lien where the debtor’s real estate is worth less than the amount of the senior mortgage lien on the property.

Norton Rose Fulbright partner David Rosenzweig and Senior Counsel Ryan Manns have prepared a legal update that analyzes the importance of the case.