Forebearance agreements in California foreclosures

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Court Allows Damages for Lost Rental Income and Emotional Distress Against the Bankster

The Fourth District Court of Appeal, Division 3 of the California Court of Appeal issued the decision in Miles v. Deutsche Bank in which they ruled that John Miles stated causes of action for breach of contract, fraud and negligent misrepresentation against Deutsche Bank. The Court also ruled that John Miles stated a cause of action for wrongful foreclosure as well. This is another big win for homeowners and the fact that this case has been ordered published is even more good news.

Justice League

Miles v. Deutsche Bank

Court: California Court of Appeal Docket: G050294	Opinion Date: April 29, 2015
Areas of Law: Civil Procedure, Real Estate & Property Law

At issue in this case were allegations of a wrongful foreclosure and related causes of action. Plaintiff John Miles appealed a judgment dismissing his breach of contract, fraud, and negligent misrepresentation causes of action pursuant to a sustained demurrer, and a summary judgment in favor of defendants banks on the wrongful foreclosure cause of action. With respect to the demurred causes of action, the Court of Appeal reversed: after review of the record, the Court found no explanation for the trial court’s ruling. Based on its independent review of the complaint, the Court of Appeal concluded plaintiff adequately stated his claims. With respect to the wrongful foreclosure cause of action, the Court also reversed: the trial court granted summary judgment on the sole basis…

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California Court of Appeal case of Fleet v. Bank of America

The recent California Court of Appeal case of Fleet v. Bank of America is the topic of this blog post. This case was decided by the Fourth District Court of Appeal, Division Three on August 25, 2014, on September 23, 2014 the Court granted the request of several parties for publication.

I truly feel that this case is unusual and may represent a turning point as it is the only published case from California that I am aware of in which an appeals Court appears to be at least considering that the banks may be engaging in a pattern of fraud and deceit.

The opinion begins on page 2 of the slip opinion with the wording, “This appeal represents another example of what is becoming a well established and predictable pattern.” The opinion then goes on to state on page 3 that “[T]his case falls into line with a number of cases in which a homeowner has been promised a mortgage modification under a program designed to forestall foreclosure only to find the notice thereof posted on the door. The kindest interpretation to place on this scenario is lender incompetence…This is the most likely explanation, given the size of the institutions involved, but it is not the only one, and as the numbers of such cases grow, other less benign explanations are coming to more and more minds.” The opinion then goes on to cite the Ninth Circuit Court of Appeals case of Corvello v. Wells Fargo Bank (9^th Cir. 2013) 728 F.3d 878, 885 (conc. opn. of Noonan, J.).

On page 8 of the slip opinion in discussing the promissory fraud cause of action the opinion states that, “They were damaged both by the loss of their home and by the loss of the money they expended jumping through hoops, running around in circles, and talking to walls in an effort to obtain the loan modification BofA had promised them, all the while unaware that BofA had no intention of modifying their loan.”

The Court reversed the Judgment entered in the case and reversed the order sustaining the demurrer to the cause of action for fraud as to BofA and several other individual defendants, as well as reversing the order sustaining demurrers to the breach of contract and promissory estoppel causes of action against BofA although the Court did affirm the order sustaining the demurrers without leave to amend against several other defendants including Recon Trust.

The Court also affirmed the order sustaining the demurrer to the cause of action for accounting without leave to amend.

Interestingly enough on page 13 of the slip opinion the Court also urged the Fleets to engage counsel to, “[G]ive them a chance to litigate on equal terms with BofA.”

I read a lot of published and unpublished cases in my work and this has to be the first case I have read from California that even hints that the Courts may be finally waking up to what the big banks are actually doing. And that is good news indeed.

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Please note that the author of this blog post, Stan Burman is NOT an attorney and as such is unable to provide any specific legal advice. The author is NOT engaged in providing any legal, financial, or other professional services, and any information contained in this blog post is NOT intended to constitute legal advice.

The materials and information contained in this blog post have been prepared by Stan Burman for informational purposes only and are not legal advice. Transmission of the information contained in this blog post is not intended to create, and receipt does not constitute, any business relationship between the author and any readers. Readers should not act upon this information without seeking professional counsel.

Is a trustee giving a foreclosure notice in California a debt collector under the FDCPA

Whether a trustee giving a foreclosure notice under a deed of trust in California is a debt collector under the Fair Debt Collection Practices Act (FDCPA) is the topic of this blog post. There is a somewhat widespread misconception that giving notice of a foreclosure sale as required by the California Civil Code makes a trustee under a deed of trust in California a debt collector. The answer is NO!

In fact no published case from any California Court has held otherwise. Giving notice of a foreclosure sale in California does NOT constitute debt collection activity under the FDCPA.

The recent case of Pfeifer v. Countrywide Home Loans, Inc., (2012) 211 Cal. App. 4th 1250, 1264, is very instructive. While the Pfeifer’s scored a partial victory in that that a California Court of Appeal reversed a judgment entered against them on their claims for wrongful foreclosure, declaratory relief and injunctive relief, the Court also stated in pertinent part that “The Pfeifers have alleged that Recon sent a notice of the pending foreclosure sale, but this allegation is insufficient to show that Recon engaged in debt collection activities bringing it under the ambit of the FDCPA. We agree with those courts that have held that giving notice of a foreclosure sale to a consumer as required by the Civil Code does not constitute debt collection activity under the FDCPA. We need not consider the Pfeifers’ contention that the FDCPA creates a private cause of action for injunctive relief. Since we conclude that the Pfeifers have not made a claim under the FDCPA, we need not consider what remedies are available under this Act.” The Court Pfeifer v. Countrywide Home Loans, Inc., 211 Cal. App. 4th 1250 supra at 1283 affirmed the judgment entered against the Pfeifer’s on all of the remaining causes of action including the claim for damages under the FDCPA. This case was a partial victory but NOT on the claim for damages under the FDCPA.

And in at least two published cases of United States District courts in the Ninth Circuit have held that “foreclosing on a property pursuant to a deed of trust is not a debt collection within the meaning” of the FDCPA. See Izenberg v. ETS Services, LLC (C.D.Cal. 2008) 589 F.Supp.2d 1193, 1199; see also Hulse v. Ocwen Federal Bank, FSB (D.Or. 2002) 195 F.Supp.2d 1188, 1204.

Anyone under the impression that sending a debt validation notice to a California trustee giving a foreclosure notice under a deed of trust will work as a foreclosure defense strategy is very mistaken and needs to read the cases cited herein.

Attorneys or parties in California who would like to view a portion of a 22 page sample complaint to stop a trustee foreclosure sale that includes a verified complaint, ex-parte application with points and authorities, sample declarations, and a proposed order sold by the author can see below.

The author of this blog post, Stan Burman, is a freelance paralegal who has worked in California and Federal litigation since 1995 and has created over 300 sample legal documents.

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Copyright 2013 Stan Burman. All rights reserved.

DISCLAIMER:

Please note that the author of this blog post, Stan Burman is NOT an attorney and as such is unable to provide any specific legal advice. The author is NOT engaged in providing any legal, financial, or other professional services, and any information contained in this blog post is NOT intended to constitute legal advice.

These materials and information contained in this blog post have been prepared by Stan Burman for informational purposes only and are not legal advice. Transmission of the information contained in this blog post is not intended to create, and receipt does not constitute, any business relationship between the author and any readers. Readers should not act upon this information without seeking professional counsel.

Does MERS have standing to foreclose in California

The defense that Mortgage Electronic Registration Systems, Inc. (MERS) does not have standing to commence a foreclosure in California is the topic of this blog post. The so called “MERS defense” does not work as a foreclosure defense strategy in California as will be shown by this blog post.

The fact is that some loan documents state right in the document that the borrower consents to MERS having authority to initiate foreclosure. Talk about a mistake! Anyone contemplating using the defense that MERS has no authority to initiate a foreclosure needs to read this blog post and then read their Deed of Trust.

In at least one case, the plaintiff actually attached a copy of the Deed of Trust to the complaint in which they argued that MERS had no standing to initiate the foreclosure. The big problem was that the Deed of Trust mentioned MERS by name! Keep reading to find out what happened.

The trial Court sustained a demurrer to the complaint and all causes of action therein without leave to amend, a California Court of Appeal affirmed that order in Gomes v. Countrywide (2011) 192 Cal. App. 4th 1149, 1157 where the Court stated that, “As an independent ground for affirming the order sustaining the demurrer, we conclude that even if there was a legal basis for an action to determine whether MERS has authority to initiate a foreclosure proceeding, the deed of trust — which Gomes has attached to his complaint — establishes as a factual matter that his claims lack merit. As stated in the deed of trust, Gomes agreed by executing that document that MERS has the authority to initiate a foreclosure. Specifically, Gomes agreed that “MERS (as nominee for Lender and Lender’s successors and assigns) has . . . the right to foreclose and sell the Property.” (Emphasis added.)

It should be noted that in other parts of the country, and in some bankruptcy courts, borrowers have had some success with the argument that since MERS is a “nominee” and “nominee” is not defined in the loan documents, that it does not have standing to initiate foreclosure.

That argument has not been particularly successful in California, mainly because of these reasons:

1. Non-judicial foreclosures only require that the trustee on the deed of trust conduct the foreclosure.

2. The deed of trust is recorded and so are any substitutions and assignments. In other states MERS had tried to circumvent the recording statutes by not recording these transfers with the County recorder.

3. The borrower (Trustor) has signed the Deed of Trust and voluntarily consented to a 3rd party conducting the Trustee’s sale, regardless of who the beneficiary is.

Despite several recent Court decisions rejecting the MERS defense many people are still under the mistaken impression that the defense is valid. The fact is that the MERS defense has been rejected by the California Courts.

I want to point out that I have absolutely NO sympathy for major lenders or loan servicers who like most large corporations want to privatize their profits, but socialize their losses.

Attorneys or parties in California who would like to view a portion of a 22 page sample complaint to stop a trustee foreclosure sale that includes a verified complaint, ex-parte application for temporary restraining order with points and authorities, sample declarations, and a proposed order sold by the author can see below.

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To view over 300 sample legal documents for use in California and Federal Courts sold by the author of this blog post visit View over 300 sample legal documents for sale

The author of this blog post, Stan Burman, is a freelance paralegal who has worked in California and Federal litigation since 1995 and has created over 300 sample legal documents for California and Federal litigation.

If you enjoy this blog post, tell others about it. They can subscribe to the author’s weekly California and Federal legal newsletter by visiting the following link: http://www.legaldocspro.net/newsletter.htm

Copyright 2013 Stan Burman. All rights reserved.

DISCLAIMER:

Please note that the author of this blog post, Stan Burman is NOT an attorney and as such is unable to provide any specific legal advice. The author is NOT engaged in providing any legal, financial, or other professional services, and any information contained in this blog post is NOT intended to constitute legal advice.

These materials and information contained in this blog post have been prepared by Stan Burman for informational purposes only and are not legal advice. Transmission of the information contained in this blog post is not intended to create, and receipt does not constitute, any business relationship between the author and any readers. Readers should not act upon this information without seeking professional counsel.