Is the Defense of TILA recoupment available as a Defense to Non judicial Foreclosure in California?
CALIFORNIA TRUSTEE SALE AND THE TILA RECOUPMENT DEFENSE
First off, what is recoupment under the Federal Truth in Lending Law?
We have talked on many other blog posts about the Federal Truth in Lending Act (“TILA”) and the one year right to statutory damages (which can be equitably tolled under some circumstances) and we have discussed TILA rescission which provides an “extended three year right to rescind the mortgage loan in a refinance transaction on a primary residence if certain “material violations” are present) – this right generally speaking cannot be extended and some courts require that the TILA lawsuit be FILED within three years. This blog post discusses a different legal right under TILA, which is the right to assert the defense of recoupment when a creditor initiates an action seeking to collect on a debt.
The goal of the defense is to reduce the amount you owe the creditor. In a successful action, the party raising the recoupment defense can seek reasonable attorney fees so there is also an economic incentive to raise the defense where applicable so that it may be easier to find an attorney willing to take the case.
As one California court discussed Recoupment is:
“A defense arising out of some feature of the transaction upon which the plaintiff’s action is grounded.” TILA provides that the one-year statute of limitations on damages claims “does not bar a person from asserting a [TILA] violation in an action to collect the debt … as a matter of defense by recoupment or set-off in such action, except as otherwise provided by State law .” 15 U.S.C. § 1640(e) (emphasis added). See also 15 U.S.C. § 1635(i)(3) (“Nothing in this subsection affects a consumer’s right of rescission in recoupment under State law.”). Under California law, a claim for recoupment may be brought as a “defense” to an “action,” notwithstanding that the claim might otherwise be barred by the statute of limitations if brought as an independent action. CAL. CODE CIV. PRO. § 431.70. See the unreported case of Alakozai v. Valley Credit Union, No. C 10–02454 HRL, 2010 WL 5017173, (N.D.Cal. Dec.3, 2010) (quoting Beach v. Ocwen Fed. Bank, 523 U.S. 410, 415, 118 S.Ct. 1408, 140 L.Ed.2d 566 (1998)).
So essentially, where you have TILA violations (ex. under-disclosure of the APR, finance charge, total of payments, etc.) these violations must normally be brought within ONE YEAR in order to obtain actual and statutory damages. In limited circumstances, this can be tolled. However, when a debtor is responding to a creditor action (ex. a lawsuit, or a proof of claim in a bankruptcy court) to collect a debt, the one-year statute of limitations does NOT APPLY given the language contained in the underlined section above.
Can you argue the defense of recoupment in California when the lender seeks a non-judicial foreclosure – is that an action that allows the recoupment defense?
Short answer – probably not. Here is one California Federal Case which dismissed the TILA recoupment claim when raised in response to a non-judicial foreclosure action. Amaro v. Option One Mortgage, 2009 WL 103302, U.S. Dist. Ct. (CD Cal 2009):
“Plaintiff argues the doctrine of recoupment allows her to raise the claim, despite bringing it beyond the statute of limitations period. (See Opp’n at 8.) According to Plaintiff, “a party may assert recoupment as a defense after a statute of limitations period has lapsed.” (Id.) Plaintiff argues she may use this defense affirmatively in this case because she brings it in response to Defendant’s non-judicial foreclosure proceeding. (Id.) Plaintiff’s contention lacks merit. A party may bring a claim for recoupment after TILA’s one-year statute of limitations period has expired, but only as a defense in an action to collect a debt. 15 U.S.C. § 1640(a). Here, Plaintiff’s affirmative use of the claim is improper and exceeds the scope of the TILA exception, permitting recoupment as a defensive claim only. See id.; Beach v. Ocwen Fed. Bank, 523 U.S. 410, 415-16, 118 S.Ct. 1408, 140 L.Ed.2d 566 (1998). Accordingly, the Court grants Defendant’s Motion with respect to Plaintiff’s first claim, without leave to amend.
Another California Court put it this way:
Recoupment is “a defense arising out of some feature of the transaction upon which the plaintiff’s action is grounded.” Alakozai v. Valley Credit Union, No. C 10–02454 HRL, 2010 WL 5017173, (N.D.Cal. Dec.3, 2010) (quoting Beach v. Ocwen Fed. Bank, 523 U.S. 410, 415, 118 S.Ct. 1408, 140 L.Ed.2d 566 (1998)). TILA provides that the one-year statute of limitations on damages claims “does not bar a person from asserting a [TILA] violation in an action to collect the debt … as a matter of defense by recoupment or set-off in such action, except as otherwise provided by State law.” 15 U.S.C. § 1640(e) (emphasis added). The Court must, therefore, determine if Defendant’s non-judicial foreclosure is an “action” and, relatedly, whether Plaintiff’s claim properly may be characterized as a “defense” to such “action.”
The general rule is that “[w]hen the debtor hales the creditor into court, the claim by the debtor is affirmative rather than defensive.” See Ortiz v. Accredited Home Lenders, Inc., 639 F.Supp.2d 1159, 1165 (S.D.Cal.2009). Specifically, in non-judicial foreclosure cases, federal district courts in California conclude that “non-judicial foreclosures are not ‘actions’ as contemplated by TILA.”4 Ortiz, 639 F.Supp.2d at 1165 (S.D.Cal.2009); Alakozai, 2010 WL 5017173; Lima v. Wachovia Mortg. Corp., No. C09–4798TEH, 2010 WL 1223234, (N.D.Cal. Mar.25, 2010). Indeed, TILA itself defines an “action” as a court proceeding. Ortiz, 639 F.Supp.2d at 1165 (citing 15 U.S.C. § 1640(e)). Thus, insofar as Plaintiff asserts recoupment in response to Defendant’s non-judicial foreclosure, her claim is not properly deemed a “defense” to an “action” for purposes of avoiding the applicable statute of limitations. (See Harris v. Wells Fargo, 2011 WL 1134216). For another example, see Lima v. Wachovia Mortgage Corp. (unreported). 2010 WL 1223234 (Cal. ND 2010).
NOTE: Keep in mind, in most cases in California, non-judicial foreclosure is the chosen foreclosure remedy (as opposed to judicial foreclosure which is also an option, but which is expensive and allows for these types of TILA recoupment claims) so raising a TILA recoupment claim will not likely save the home for foreclosure or provide any other meaningful remedy.
Are there any circumstances where the Defense of Recoupment may arise in California?
Sure, if any lender seeks to haul you into Court to collect on a mortgage debt, it may be wise to consult a predatory lending attorney and discuss a TILA audit of your loan file. In these circumstances, recoupment may be raised as a defense or to offset the creditors claims.
Another possibility is in a bankruptcy court. This is something your attorney should explore. For example, if you have filed Chapter 13 bankruptcy and the lender has filed a proof of claim (“an action”) you can file an adversary proceeding or take other appropriate measure to raise the defense of recoupment.
Here is one case that discussed recoupment in Chapter 13 bankruptcy (in re Coxson 43 F. 3d 189 (5th Circuit 1995):
“Commonwealth argues that the Coxsons’ TILA claim fails the second step of the test in Bull because the claim was not raised defensively. Commonwealth argues that the Coxsons “hauled” Commonwealth into court and initiated this lawsuit, and therefore the TILA claim is used offensively, rather than defensively. The district court disagreed, holding that the Coxsons filed this suit in response to Commonwealth’s filing of a proof of claim in the bankruptcy court and its foreclosure actions. The district court reasoned that filing a proof of claim is “an action to collect the debt,” and therefore the TILA claim was timely under 15 U.S.C. § 1640(e). We agree with the district court’s analysis. In this case, Commonwealth’s and the Coxsons’ claims arise from the same underlying transaction, the contract for financing the Coxsons’ home. See Plant v. Blazer Financial Services, Inc., 598 F.2d 1357, 1361 (5th Cir.1979); Maddox v. Kentucky Finance Co., 736 F.2d 380, 383 (6th Cir.1984). The mere fact that the Coxsons were the plaintiffs in the case below does not preclude the finding that their TILA claim was raised defensively. See, e.g., In re Jones, 122 B.R. 246 (plaintiff permitted to raise TILA recoupment claim defensively). Furthermore, Texas state courts have held that a TILA claim may be asserted defensively as a recoupment action against a lender attempting to enforce contractual obligations. Garza v. Allied Finance Co., 566 S.W.2d 57, 62-63 (Tex.Civ.App.-Corpus Christi 1978); Cooper v. RepublicBank Garland, 696 S.W.2d 629, 634 (Tex.Civ.App.-Dallas 1985) (holding that recoupment claim was raised defensively in response to creditor’s foreclosure efforts). We find that the TILA claim was not barred by the statute of limitations, and therefore remand the issue for consideration of the merits of the claim.
A similar outcome resulted in Davis v. Wells Fargo Financial, Chapter 13 case (case# 2:11-CV-02766-WMA – Aug. 2011) Northern District of Alabama. In that case, Wells Fargo filed the proof of claim against the debtor in chapter 13 bankruptcy case. The debtor filed an adversary proceeding for violations of TILA (failing to accurately disclose finance charge and APR). Wells Fargo moved to dismiss arguing the claim for damages was not brought within the one year statute of limitations under 1640 (e). The court held that 1640 (e) did not apply to recoupment claims asserted defensively. The Court held that the defense of recoupment DID APPLY as the proof of claim was the affirmative action that the debtor was responding to, and it was proper to seek damages, and attorney fees as permitted under TILA.
This might be important in some cases to help the debt reduce the amount of the debt owed which could make the chapter 13 plan viable (many chapter 13 plans fail and get converted to chapter 7’s). Recall as we have discussed in previous posts that in a chapter 13, you still have to bring your mortgage current and your arrears current over the life of the chapter 13 plan.
For example, if you have a HOEPA violation – which is an egregious form of TILA violation (high cost loans), you could seek actual and statutory damages and special enhanced damages (that might help offset the arrearages) as well as attorney fees.
A couple other notes:
(1) If you are in a chapter 13 consider having a TILA audit performed on your loan. You may have grounds to file an adversary proceeding raising the defense of recoupment following the proof of claim filed by the creditor. If for some reason the creditor does not file a proof of claim, there is some legal authority for filing a proof of claim on behalf of the creditor. See Federal Rules of Bankruptcy Procedure 3004. Note the time restrictions.
(2) In a chapter 7 there is some case law suggesting that a Motion for Relief from the Automatic stay in Bankruptcy is not an “action” to collect the debt and the defense of recoupment could not be raised. As one example, see Chabot v. Washington Mutual – 2007 WL 1412490 (Bankr. D. Mont. May 10, 2007) which held that such an action by the creditor is merely an action to “seek relief from the automatic stay” and not to collect a debt.
(3) Assignees of loans (ex. the securitized loan trust that is normally seeking to foreclose on you) are normally liable under TILA so be prepared to rebut that argument if you are a foreclosure defense attorney reading this.
(4) There is authority for raising a defense of recoupment in a chapter 13 even after the chapter 13 plan is confirmed. One such case is Elliot v. ITT, 150 B.R. 36 (N.D. Ill 1992).
(5) Talk to your bankruptcy attorney about whether you should list the debt as “disputed” on the bankruptcy petition and/or list the debt as “exempt.” Keep in mind, in a chapter 7 bankruptcy case, all pre-petition claims belong to the trustee so this is something you will need to keep it mind. If it is exempt claim, you may be able to bring the claim yourself. If not, the trustee can do what they want with the claim, including pursue it, or abandon it.
Hopefully this has been a helpful overview. To discuss TILA audits, predatory lending, adversary proceedings and the like, contact us at (877) 276-5084. This is an advertisement and communication. Article was written by Steve Vondran, Esq. All copyrights reserved. This is general legal information only and should not be relied on as legal advice.
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Does anyone have signatures of Krystal Hall, Idaho Notary, or Vicki Sorg signatures?
If so, please email them to us at steve@vondranlaw.com. We are conducting a foreclosure chain of title analysis and have this notary and signor on the assignment of deed of trust. You may also find them on the substitution of trustee document. Either way, whether you have notarized documents or not, we would appreciate obtaining copies of these known signatures for comparison purposes. All parties are presumed innocent and in compliance with the law.
We are willing to exchange what we have for yours.
CAN A CALIFORNIA HOMEOWNER DEMAND THAT THE LENDER OR LOAN SERVICER PRODUCE THE NOTE AS A FORECLOSURE DEFENSE STRATEGY?
There is no guarantee the following is correct. Law changes all the time. This is for attorneys only and you should assume the information is not correct. This is general legal information only.
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Unfortunately, court says “no way” and declares THERE IS NO REQUIREMENT THAT THE ANYONE PRODUCE THE ORIGINAL PROMISSORY NOTE AS A PRE-REQUISITE TO PURSUING A PRIVATE TRUSTEE SALE. Here are a few snipets from the case:
MY COMMENTS ARE IN BOLD AND MERELY REPRESENT MY OPINION.
Chilton v. Federal Nat. Mortg. Ass’n, Slip Copy, 2009 WL 5197869 (E.D.Cal.)
ORDER RE PROPOSED ORDER TO SHOW CAUSE AND MOTION FOR TEMPORARY RESTRAINING ORDER
Plaintiff filed a complaint on December 16, 2009, alleging that Defendant, Federal National Mortgage Association, violated unspecified provisions of federal law within “Title 15 U.S.C. and/or Title 18 U.S.C.” because Defendant initiated non-judicial foreclosure on her property, located in Clovis, California, without possessing the genuine original note.” She advances no other bases for relief.
Plaintiff has also filed an “order to show cause and motion for temporary restraining order,” in an attempt to block the foreclosure process.
To obtain temporary or permanent injunctive relief, a plaintiff must demonstrate likelihood of success on the merits. Here, Plaintiff’s only legal theory has been resoundingly rejected as a basis for relief. It is well-established that non-judicial foreclosures can be commenced without producing the original promissory note.
THAT’S THE PART THAT HURTS. I SUPPOSE ANYONE WHO SHOWS UP ON FORECLOSURE DAY CLAIMING TO BE THE HOLDER OF THE LOAN (WHETHER IT IS MERS PRETENDING TO BE THE BENEFICIARY OR THE NOMINEE OF THE LENDER, THE LOAN SERVICER PRETENDING TO BE THE HOLDER OF THE LOAN OR SOME OTHER THIRD PARTY, LIKE WALLMART FOR EXAMPLE, CLAIMING TO BE THE HOLDER OF THE LOAN) GETS AN UNFETTERED RIGHT TO FORECLOSE, AND A FREE PASS FROM ANY JUDICIAL SCRUTINY WHATSOEVER.
The Court went on to state:
“Non-judicial foreclosure under a deed of trust is governed by California Civil Code Section 2924 which relevant section provides that a “trustee, mortgagee or beneficiary or any of their authorized agents” may conduct the foreclosure process.” California courts have held that the Civil Code provisions “cover every aspect” of the foreclosure process, (case cited), and are “intended to be exhaustive,”(another case cited). There is no requirement that the party initiating foreclosure be in possession of the original note.
AFTER LEVELING THIS BLOW THE COURT CITED A FEW OTHER CASES THAT RESULTED IN THE SAME OUTCOME FOR PLAINTIFFS ASSERTING THE “PRODUCE THE NOTE” FORECLOSURE DEFENSE STRATEGY (OBVIOUSLY IN AN ATTEMPT TO TELL FUTURE LITIGANTS IN CALIFORNIA “GIVE UP TRYING TO VERIFY ANYONES CREDENTIALS”):
(1) See, e.g., Nool v. HomeQ Servicing, — F.Supp.2d —-, 2009 WL 2905745 (Sep. 4 2009) (“There is no requirement that the party initiating foreclosure be in possession of the original note.”);
(2) Candelo v. NDEX West, LLC, 2008 WL 5382259, at *4 (E.D.Cal. Dec.23, 2008) (“No requirement exists under statutory framework to produce the original note to initiate non-judicial foreclosure.”);
(3) Putkkuri v. ReconTrust Co., 2009 WL 32567, *2 (S.D.Cal. Jan.5, 2009) (“Production of the original note is not required to proceed with a non-judicial foreclosure.”);
(4) Phillips v. MERS Mortgage Electronic Registration Systems, 2009 WL 3233865, 9 (E.D.Cal.2009); Vargas v. Reconstruction Co., 2008 U.S. Dist. LEXIS 100115, at *8-9 (E.D.Cal. Dec. 1, 2008).
WE HAVE PREVIOUSLY DISCUSSED THE KANSAS SUPREME COURT CASE THAT DISCUSSED THE ROLE OF MERS IN WHICH THE COURT SEEMED TO SUGGEST THAT MERS WAS NOT A BENEFICIARY UNDER THE DEED OF TRUST JUST BECAUSE THEY SAY THEY ARE IN THE DOCUMENT. THE COURT ADDRESSED PLAINTIFF’S RELIANCE ON THAT CASE:
“Plaintiff’s reliance on Landmark National Bank v. Kessler, 216 P.3d 158, 2009 Kan. LEXIS 834 (Kan.2009), is misplaced. That case concerned a company, Mortgage Electronic Registration Systems, Inc. (“MERS”), that acted on behalf of a lender to finalize a second mortgage on Kessler’s home. For procedural reasons not relevant to the present case, it became necessary for the Kansas court to determine whether MERS possessed an interest in the second mortgage, eventually concluding that under the specific facts of that case, MERS was more like an agent than a buyer/owner of the note.”
THE COURT CONTINUED:
“In reaching this conclusion, the Landmark court noted: Indeed, in the event that a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity, the mortgage may become unenforceable. “The practical effect of splitting the deed of trust from the promissory note is to make it impossible for the holder of the note to foreclose, unless the holder of the deed of trust is the agent of the holder of the note. [Citation omitted.] Without the agency relationship, the person holding only the note lacks the power to foreclose in the event of default. The person holding only the deed of trust will never experience default because only the holder of the note is entitled to payment of the underlying obligation. [Citation omitted.] The mortgage loan becomes ineffectual when the note holder did not also hold the deed of trust.” Bellistri v. Ocwen Loan Servicing, LLC, 284 S.W.3d 619, 623 (Mo.App.2009).”
THE COURT CHIMED IN ON THIS LEGAL REQUIREMENT:
“This language merely stands for the proposition that one possessing the deed of trust cannot foreclose on a mortgage without (1) also possessing some interest in the promissory note, or (2) obtaining permission to act as agent of the note-holder. This has nothing whatsoever to do with possession of the “original” promissory note document, i.e., the original piece of paper with original signatures, etc., the possession of which is not required to initiate non-judicial foreclosure in California. Because Plaintiff cannot possibly establish any likelihood of success on her current claim for relief, it is not necessary to set her motion for temporary injunctive relief for hearing. Her motion is DENIED. IT IS SO ORDERED.”
There you have it friends, as we have been telling callers to our office seeking foreclosure defense, DO NOT RELY ON “PRODUCE THE NOTE” AS A SILVER BULLET FORECLOSURE DEFENSE THAT IS GOING TO STOP YOUR FORECLOSURE WITH AN INJUNCTION AND GET YOUR HOUSE FOR FREE. IF THERE ARE GLARING IRREGULARITIES, AND OTHER LEGAL GROUNDS TO GET YOU INTO COURT VALIDLY, THEN YOU MAY WANT TO TAG ON THIS CLAIM AND SEE IF YOU CAN GET A DIFFERENT OUTCOME FROM A DIFFERENT JUDGE, BUT SUFFICE IT TO SAY AS A STAND-ALONE LEGAL THEORY, THERE IS SIMPLY NOT MUCH TEETH TO THE THEORY. MOST OF THE CASES WHERE YOU HEAR OF SOME SUCCESS COME FROM FLORIDA AND OHIO AND OTHER “JUDICIAL FORECLOSURE” STATES WHERE THE LENDER IS FORCED TO FILE IN COURT TO START THE FORECLOSURE PROCESS. IN THESE CASES, THE ISSUE BECOMES A QUESTION OF “STANDING” AND “REAL PARTY IN INTEREST.” THERE IS ALSO THE BANKRUPTCY ANGLE THAT WE WILL BE EXPLORING IN GREATER DETAIL IN FUTURE POSTS.
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In a similar case, NEWBECK v. WASHINGTON MUTUAL BANK, Slip Copy, 2010 WL 291821 (N.D.Cal.), the Court essentially held the same way when a Plaintiff tried to argue “produce the original note” as a strategy to set aside a foreclosure sale that had already occurred. In this case the Court first discussed the dreaded issue of challenging a foreclosure sale that had already been finalized, and the Court’s comments shed light on how one-sided the laws are when you dare take on a “lender” in Court
“Plaintiffs ask the Court to set aside Washington Mutual’s foreclosure sale of their property. They assert that Washington Mutual did not have possession of the original mortgage note or the deed of trust under which it was secured and, as a result, it was not entitled to foreclose. A plaintiff seeking to set aside a foreclosure sale must first allege tender of the amount of the secured indebtedness. Abdallah v. United Savings Bank, 43 Cal.App.4th 1101, 1109, 51 Cal.Rptr.2d 286 (1996) (citing FPCI RE-HAB 01 v. E & G Investments, Ltd., 207 Cal.App.3d 1018, 1021-22, 255 Cal.Rptr. 157 (1989)); Smith v. Wachovia, 2009 WL 1948829, at *3 (N.D.Cal.). Without pleading tender or the ability to offer tender, a plaintiff cannot state a cause of action to set aside a foreclosure sale. Karlsen v. Am. Savings & Loan Ass’n, 15 Cal.App.3d 112, 117, 92 Cal.Rptr. 851 (1971) (citing Copsey v. Sacramento Bank, 133 Cal. 659, 662 (1901)); Smith, 2009 WL 1948829, at * 3 (citing Karlsen ). Plaintiffs allege neither tender nor their ability to offer tender. Thus, they do not state a claim to set aside the foreclosure sale.
THIS MEANS, IF YOU ARE CHALLENGING A FORECLOSURE SALE AND SEEK TO SET IT ASIDE (ON WHATEVER PROPER GROUNDS YOU MAY HAVE) YOU NEED TO AT LEAST ALLEGE A WILLINGNESS AND ABILITY TO TENDER. IF ALL ELSE FAILS, YOU MAY WANT TO TELL THE JUDGE THAT YOU WILL TENDER THE FULL BALANCE DUE AFTER YOU COLLECT ON YOUR FRAUD JUDGEMENT. SOMETIMES THIS MAY BE ALL YOU HAVE WHEN YOU ARE WAY UPSIDE DOWN ON YOUR PROPERTY.
THE COURT THEN WENT ON TO DISCUSS WHAT MIGHT HAPPEN EVEN IF YOU COULD TENDER:
“Even if they alleged tender, the basis on which they appear to seek relief does not support their claim. In California, there is no requirement that a trustee produce the original promissory note prior to a non-judicial foreclosure sale. See, e.g., Pantoja v. Countrywide Home Loans, Inc., 640 F.Supp.2d 1177, 1186 (N.D.Cal.2009); Smith, 2009 WL 1948829, at *3; Neal v. Juarez,2007 WL 2140640, *8 (S.D.Cal.) (citing R.G. Hamilton Corp. v. Corum, 218 Cal. 92, 94, 97, 21 P.2d 413 (1933); Cal. Trust Co. v. Smead Inv. Co., 6 Cal.App.2d 432, 435, 44 P.2d 624 (1935)).California Civil Code Sections 2924 through 2924k “provide a comprehensive framework for the regulation of a non-judicial foreclosure sale pursuant to a power of sale contained in a deed of trust.” Knapp v. Doherty, 123 Cal.App.4th 76, 86, 20 Cal.Rptr.3d 1 (2004) (quoting Moeller v. Lien, 25 Cal.App.4th 822, 830, 30 Cal.Rptr.2d 777 (1994)). Knapp explains the non-judicial foreclosure process as follows: Upon default by the trustor [under a deed of trust containing a power of sale], the beneficiary may declare a default and proceed with a nonjudicial foreclosure sale. The foreclosure process is commenced by the recording of a notice of default and election to sell by the trustee. After the notice of default is recorded, the trustee must wait three calendar months before proceeding with the sale. After the 3-month period has elapsed, a notice of sale must be published, posted and mailed 20 days before the sale and recorded 14 days before the sale. Knapp, 123 Cal.App.4th at 86, 20 Cal.Rptr.3d 1 (citation omitted).
I SUPPOSE YOU ARE NEVER ALLOWED TO ASK WHO THE “BENEFICIARY” IS OR MAKE ANYONE PROVE THAT POINT BEFORE THEY TAKE YOUR HOUSE. ARE YOU ALSO ALLOWED TO ASK WHO THE BENEFICIARY IS FOR PURPOSES OF COMPLIANCE WITH CALIFORNIA CIVIL CODE SECTION 2923.5 AND THE DECLARATION THAT IS MADE UNDER THIS SECTION? WE WILL DISCUSS THIS ISSUE IN ANOTHER BLOG POST.
ANYWAY, I DIGRESS, THE COURT CONTINUED:
“A properly conducted nonjudicial foreclosure sale constitutes a final 13 adjudication of the rights of the borrower and lender.” Plaintiffs have not pointed to controlling authority to show that this statutory scheme requires production of the original promissory note or deed of trust. Thus, even if they alleged tender, to the extent that they allege irregularities in the foreclosure sale based on Washington Mutual’s failure to produce the original promissory note or deed of trust, they do not state a claim.
AS DISCUSSED ABOVE, ONLY OUT OF STATE CLAIMS FOR PRODUCE THE NOTE WERE CITED (THESE COME FROM THE JUDICIAL FORECLOSURE STATES).
“Plaintiffs cite various out-of-state cases, which apply non-California law to judicial foreclosure actions. See In re Foreclosure Actions, 2007 WL 4034554 (N.D.Ohio); In re Foreclosure Cases, 2007 WL 3232430 (N.D.Ohio); Landmark Nat’l Bank v. Kessler, 289 Kan. 528, 216 P.3d 158 (2009); U.S. Bank Nat’l Ass’n v. Ibanez, 2009 WL 3297551 (Mass.Land Ct.). Because these cases do not apply California’s non-judicial foreclosure sale statutes, they do not support Plaintiffs’ position.”
SO THERE YOU HAVE IT, MORE PROOF OF THE MOUNTAIN YOU MUST CLIMB TO GET TO THE PROMISED LAND. AS WE TELL OUR CLIENTS, FORECLOSURE DEFENSE IS NOT AN EASY BUSINESS.
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KEYWORDS: CALIFORNIA FORECLOSURE DEFENSE LAWYER / PHOENIX FORECLOSURE DEFENSE LAWYER / ARIZONA LOAN MODIFICATION LAWYER / PRODUCE THE NOTE FORECLOSURE DEFENSE STRATEGY / SCOTTSDALE LOAN MODIFICATION / PHOENIX BANKRUPTCY LAWYER / PHOENIX BK ATTORNEY / NEWPORT BEACH FORECLOSURE LAWYER / INJUNCTION TO STOP FORECLOSURE / TRO / LIS PENDENS / SB1137 / FILE CHAPTER 7 BANKRUPTCY / MERS / SECURITIZED LOANS / QWR.
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AUTHORS NOTE: IF THE CALIFORNIA FORECLOSURE STATUTES GOVERN THE FORECLOSURE SALE PROCESS, AND IF NOTHING ELSE REALLY MATTERS, THEN YOU NEED TO TAKE A CLOSE LOOK AT WHETHER THAT STATUTE IS BEING COMPLIED WITH WHEN LOOKING TO OBTAIN AN INJUNCTION TO HALT FORECLOSURE.
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