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.

  The bank had refused to execute the agreement and foreclosed. The bank contended the borrower had not complied with the terms of the modification agreement because the last payment was not certified. However, the modification agreement did not require that payments be certified although the agreement did provide that it would not take affect unless signed by both the homeowner and lender.

  The court ruled, despite the statute of frauds and the lack of an agreement signed by the lender, that the homeowner had adequately alleged the existence of an enforceable agreement to modify the loan and the payment of all sums due under that agreement until the lender breached the agreement by failing to accept non-certified funds for the last payment.

  Tender was not required because the factual allegations were sufficient to allege a void sale since the lender lacked a contractual basis to exercise the power of sale in the deed of trust.

  Michael Daymude consults with clients and accepts cases involving contractual disputes, including disputes involving wrongful foreclosure and loan modification agreements. For other types of cases accepted, please scroll the Home and My Practice pages. If you are seeking a legal consultation or representation, call Michael at 818.971.9409.

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