FEDERAL COURT IN CALIF SAYS BOA VIOLATED 2013 LAW – STOPS FORECLOSURE

Consumer Rights Defenders…cites the verbatim transcript of the USDC East. Dist. Calif’s ruling in the SINGH case decided in April 2013.  This is significant as this is one of the initial rulings that may be used in other litigation in arguing collateral estoppel [facts established that cannot be revisited, that could be Judicially Noticed] in both state and federal courts supporting “NO FORECLOSURE.”  Read carefully and call us today at 818.453.3585.

RULING….cited in part:

“…Defendant [BOA] and other lenders’ practice of negotiating with homeowners in default on their loans for a loan modification while simultaneously advancing the foreclose process is commonly referred to as “dual tracking.” Dual tracking has been heavily criticized by both state and federal legislators. In July 2012, California passed legislation referred to as “The California Homeowner Bill of Rights” which prohibits dual tracking. As of January 1, 2013, “The California Homeowner Bill of Rights went into effect and it offers homeowners greater protection during the foreclosure process. Cal. Civ. Code§ 2923.6(b) (2013). Section 2923.6(b) states “it is the intent of the legislature that the mortgage servicer offer the borrower a loan modification or work out a plan if such a modification or plan is consistent with its contractual or other authority.” The statute further provides that “if a borrower submits a complete application for a first lien loan modification . . . the mortgage servicer . . . shall not record a notice of default or notice of sale, or conduct a trustee’s sale, while the complete first lien loan modification application is pending.” Cal. Civ. Code § 2923.6(c) (2013). At the hearing, the Court inquired of Plaintiff’s counsel whether Defendant ever responded to Plaintiff’s complete application for a first lien loan modification. Plaintiff submitted a Declaration which stated in part, “I never received written notice or confirmation or anything whatsoever to state or indicate that I did not qualify for a loan modification.” (ECF No. 10.) Because Defendant has failed to respond to Plaintiff’s application for a first lien loan modification after January 1, 2013, section 2923.6 applies to this case and prevents Defendant from conducting a trustee’s sale while Plaintiff’s application for a first lien loan modification is pending. Accordingly, Plaintiff has adequately shown he is likely to succeed on the merits in light of California’s new Homeowners’ Bill of Rights. Plaintiff has also met the remaining factors of the TRO standard.” [emphasis added]

Folks, this is huge. A federal judge finds the new code applies, that it was broken and sale is not permitted and TRO is appropriately ordered. If this applies then generally,  homeowners in California who want a loan modification must document and send in your request to your 1st priority lender who MUST follow the rules before they can foreclose.  WHY is it critical…because you can argue [we do it in your lawsuit’s TRO application] that although not an appellate decision, a USDC judge ruled on it so, and cite the case and ruling. It gives other courts something to hang their hats on. And the damages part of your case goes forward in the meantime with a roof over your head!

Call us for help. 818.453.3585, ask for Steve or Sara.

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