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

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

Nonjudicial Foreclosure: Preemptive Actions Dissallowed

  Once again a Court of Appeals affirms the trial court’s ruling sustaining a demurrer without leave to amend of a homeowners’ complaint which challenged the MERS registration system and the assignment of the underlying note by MERS. Continue reading

Antideficiency Protections Under 580b, 580d, and 580e Amended and Clarified

  Antideficiency protections have been clarified by July 2013 legislation amending Code of Civil Procedure sections 580b and 580d. SB 426 amends those sections and clearly provides that the prohibitions contained in sections 580b and 580d include collecting or even owing a deficiency. The amendment further clarifies that the prohibition extends only to the borrower and the borrower’s non-encumbered assets — not to 1) guarantors, pledgors, or other sureties; or, 2) that might be satisfied from other collateral pledged to secure the obligation. Continue reading

Borrower May Challenge Securitized Trust’s Ownership

  The Fifth Appellate District holds in Glaski v. Bank of America that a borrower may challenge a securitized trust’s claim to ownership of the deed of trust by alleging “the attempts to transfer the deed of trust to the securitized trust (which was formed under New York law) occurred after the trust’s closing date. Transfers that violate the terms of the trust instrument are void under New York law, and borrowers have standing to challenge void assignments of their loans even though they are not a party to, or a third party beneficiary of, the assignment agreement.” Continue reading

580b Purchase Money Antideficiency Protection Applies to Short Sales

  In a case of first impression, the Fourth Appellate District in Coker v. JP Morgan Chase Bank, holds that the antideficiency protections of Code of Civil Procedure section 580b apply to any loan used to purchase residential real property, commonly referred to as a “purchase money loan,” regardless of the mode of sale. Continue reading