Same Creditor: Sold-Out Junior May Obtain Deficiency Judgment Following Nonjudicial Foreclosure of Senior Lien

  In Black Sky Capital, LLC v. Cobb, the California Supreme Court holds that Code of Civil Procedure section 580d—that prevents a foreclosing creditor at a nonjudicial foreclosure sale from collecting a deficiency judgment—does not prevent the same creditor holding two deeds of trust on the same property from recovering a deficiency judgment when its junior lien is extinguished by the nonjudicial foreclosure of its senior lien. Continue reading

Foreclosure: Record Trustee’s Deed Before Serving 3-Day Notice

  When real property is purchased at a foreclosure sale, it is frequently necessary for the new owner to institute unlawful detainer proceedings to recover possession. Is it necessary for the Trustee’s Deed Upon Sale to record before a valid 3-day notice to quit is served?

  In Dr. Leevil, LLC v. Westlake Health Care Center, the California Supreme Court answered this question in the affirmative. In reversing the Court of Appeals, the Court held that duly perfected title, including the recording of the Trustee’s Deed Upon Sale, is required before a valid 3-day notice to quit may be served.

  Practice tip: after purchase at a foreclosure sale, duly perfect title and do not serve a 3-day notice to quit before the trustee’s deed records.

 

Wrongful Foreclosure: Prejudice Results from the Foreclosure of a Void Assignment

  In Yvanova v. New Century Mortgage Corp the California Supreme Court held that in a case where a homeowner alleges a nonjudicial foreclosure sale was wrongful because of a void assignment, the homeowner has standing to sue for wrongful foreclosure.

  In Sciarratta v. U.S. Bank National Association the question of “prejudice” left open in Yvanova was decided. Where a homeowner alleges foreclosure by one with no right to do so, do such allegations alone establish the requisite prejudice or harm necessary to state a cause of action for wrongful foreclosure?  Or instead, to adequately plead prejudice, does the plaintiff-homeowner have to allege the wrongful foreclosure interfered with his or her ability to pay on the debt, or lead to a foreclosure that would not have otherwise occurred?  Continue reading

Wrongful Foreclosure: Borrowers May Challenge Void Assignments of Deeds of Trust

  In Glaski v. Bank of America, the appellate court held a borrower may base a wrongful foreclosure claim on allegations that the foreclosing party acted without authority because the assignment by which it purportedly became beneficiary under the deed of trust was not merely voidable but void. Subsequent appellate court opinions, for a variety of reasons, refused to follow Glaski.

  In Yvanova v. New Century Mortgage the California Supreme Court considered the narrow question, considered in Glaski, of whether the borrower on a home loan secured by a deed of trust may base an action for wrongful foreclosure on allegations a purported assignment of the note and deed of trust to the foreclosing party bore defects rendering the assignment void. Continue reading

Davis-Stirling: Partial Payments Reducing Assessments Must Be Accepted

  The Court of Appeals affirms, in Huntington Continental Town House Ass. v. Miner, that a homeowners’ association is required by the Davis-Stirling Common Interest Development Act to accept partial payments from an owner of a separate interest when the owner is delinquent in paying assessments. Continue reading

Wrongful Foreclosure: Ineffective Securitization? So What?

  The courthouse doors are now routinely slammed shut against homeowners who allege wrongful foreclosure based upon alleged defects in securitization trusts, despite the holding in Glaski v. Bank of America. Continue reading

Bona Fide Lease Survives Foreclosure Under PTFA

  The Sixth Appellate District concludes, in Nativi v. Deutche Bank, that the Protecting Tenants Against Foreclosure Act of 2009 (scheduled to sunset the end of 2014) causes a bona fide lease for a term to survive foreclosure through the end of the lease term — subject to the limited authority of the immediate successor in interest to terminate the lease, with proper notice, upon sale to a purchaser who intends to occupy the unit as a primary residence. The Act impliedly overrides state laws that provide less protection but expressly allows states to retain the authority to enact greater protections. Bona fide tenancies for a term that continue by operation of the PTFA remain protected by California law.

Davis-Stirling: Partial Payments Reducing Assessments Must Be Accepted

  The Orange County Appellate Division concludes in Huntington Continental v. JM Trust that the Davis-Stirling Common Interest Development Act compels a homeowner’s association to accept and apply partial payments that reduce delinquent assessments owed, but not any other amounts due such as late fees, interest, attorney fees, and costs. This is true even if an action has been commenced to foreclose the lien since there is nothing in the Act precluding the acceptance of partial payments of delinquent assessments once litigation has commenced. Continue reading

Wrongful Foreclosure: 5 Insufficient Factual Allegations

  Rossberg v. Bank of America is a case about factual allegations which will not win the day in a suit to enjoin a nonjudicial foreclosure sale. The Rossbergs attempted to allege defects sufficient to invalidate the recorded Notice of Default and sought to enjoin the foreclosure sale of their residence. The take-a-ways: Continue reading

Wrongful Foreclosure; Temporary Loan Modification; Void Sale: Tender Not Required

  In Chavez v. Indymac Mortgage Services the court allowed a wrongful foreclosure case to proceed where the borrower complied with all the terms of the temporary loan modification and timely signed and returned the loan modification agreement. Continue reading