POLITZ, Chief Judge:
Leroy Jones and Paula Faye Jones, Chapter 13 debtors, appeal a judgment approving a post-petition foreclosure upon their real property. Concluding that there was neither error nor abuse of discretion in the district court's modification of the statutory stay
In March of 1989 the Joneses purchased certain real property in Beaumont, Texas from Alfred and Rosie A. Garcia, giving in payment a promissory note for $27,000. The resulting mortgage was secured by a Deed of Trust duly filed in the records of Jefferson County, Texas.
The Joneses defaulted on the note in 1991 causing the Garcias to commence foreclosure proceedings. In response the Joneses sought relief under Chapter 13 of the Bankruptcy Code, staying the foreclosure. Payments were resumed but the Joneses again defaulted on their note in March of 1994 and foreclosure proceedings were again instituted. On May 5, 1994 the Joneses dismissed their Chapter 13 proceedings and a copy of the motion was served on the Garcias.
On May 16, 1994 the Garcias accelerated the Jones mortgage note. A few days later the Joneses filed a second Chapter 13 petition but no notice of same was served on the Garcias nor was a notice filed in the pertinent Jefferson County property records. Unaware of the new bankruptcy proceeding the Garcias continued with the foreclosure and on June 7, 1994 purchased the property at the foreclosure sale.
Sometime thereafter counsel for the Garcias was notified of the new Chapter 13 filing and the Garcias sought authority to pursue an eviction action against the Joneses who continued to maintain possession of the property. The Joneses maintained that the foreclosure sale was void because it occurred after their bankruptcy filing which triggered the automatic stay. The bankruptcy judge declined to void the transfer of title, finding that the Garcias were good faith purchasers without notice of the bankruptcy filing and therefore protected by Section 549(c) of the Bankruptcy Code.
The Joneses maintain that the foreclosure and subsequent sale of their Beaumont property is void because it occurred after the effective date of the automatic stay under 11 U.S.C. § 362(a) and, therefore, the Garcias have no legal right to evict them. The Joneses misperceive the law. It is well-settled that "actions taken in violation of the automatic stay are not void, but rather they are merely voidable, because the bankruptcy court has the power to annul the automatic stay pursuant to section 362(d)."
The judgment of the district court is AFFIRMED.
Perhaps our language in Picco and Sikes occasioned some confusion in the courts á quo. Our statement in Picco that actions taken in violation of the stay are voidable must be understood in context. It is the effect of the stay itself which is voidable, subject to the broad discretion afforded a bankruptcy judge under section 362. In this case, the district court merely exercised its discretion to modify the stay, as section 362(d)(3) authorizes, thereby validating the foreclosure and transfer of title to the Garcias.