Injunctive Relief for Failure to Comply with HUD Servicing Requirements

  In Pfeifer v. Countrywide Home Loans, Division Two, First Appellate District held that, although there is no private right of action for a lenders’ failure to comply with HUD regulations, offensive action is different from defensive action.

 The court determined that the deed of trust incorporated by reference the servicing requirements of HUD, including a face-to-face interview, and that the lenders had to comply with the servicing terms prior to conducting a valid nonjudicial foreclosure. Accordingly, the HUD servicing requirements are conditions precedent to the acceleration of a debt or to foreclosure.

  The plaintiffs could, therefore, seek to enjoin the lenders from proceeding with a nonjudicial foreclosure based upon the lenders’ failure to perform a HUD servicing requirement, i.e., a face-to-face interview.

  Tender is not required because the borrowers are seeking to enjoin a pending foreclosure sale based on the lenders’ failure to comply with the servicing requirements incorporated in the FHA deed of trust.

  The court also held, after a lengthy discussion of the issue, that merely giving notice of a foreclosure sale to a consumer as required by the Civil Code does not constitute debt collection activity under the Fair Debt Collection Practices Act.

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