Where a real property nonjudicial foreclosure was completed and the deed recorded prepetition, the debtor has neither legal nor equitable title to the property at the time the bankruptcy petition is filed. Although the debtor may still be in possession of the premises, his or her status is essentially that of a “squatter.” The mortgagee (or purchaser at the foreclosure sale) is entitled to the property and thus relief from the stay should be granted.
However, if you attempt to remove the squatter during the bankruptcy case without lifting the stay...you violated the stay...(at least under California Law). Conversely, if the buyer of the foreclosed home was instead a “landlord,” it would have been exempted from the automatic stay by 11 USC §362(b)(22)
The moral of the story....get relief from the stay if there is a possibility that the Debtor has "any type" of interest.
In re Perl 13-1328 (9th Cir. BAP 2014)
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