Unargued Points – “Contentions are waived when a party fails
to support them with reasoned argument and citations to authority.”
Moulton Niguel Water Dist. v. Colombo, 111 Cal. App. 4th 1210, 1215
(2003).

Responding on the Merits Waives Any Service Defect – “It is
well settled that the appearance of a party at the hearing of a motion
and his or her opposition to the motion on its merits is a waiver of
any defects or irregularities in the notice of the motion.”  Tate v.
Superior Court, 45 Cal. App. 3d 925, 930 (1975) (citations omitted).

Statute of Frauds, Forebearance Agreement – An agreement to
forebear from foreclosing on real property under a deed of trust must
be in writing and signed by the party to be charged or it is barred by
the statute of frauds.  Secrest v. Security Nat. Mortg. Loan Trust
2002-2, 167 Cal. App. 4th 544, 552-553 (2008).

– Statute of Frauds, Modification of Loan Documents – An
agreement to modify a note secured by a deed of trust must be in
writing signed by the party to be charged, or it is barred by the
statute of frauds.  Secrest v. Security Nat. Mortg. Loan Trust 2002-2,
167 Cal. App. 4th 544, 552-553 (2008). Oh yes but what about the exceptions.

Performance of the contract like if you will provide all you personal financial information

we (the lender)  will postpone the Trustee sale. You provide the information they foreclose anyway.

Cause of Action for Violation of Civil Code § 1632 - Section
1632, by its terms, does not apply to loans secured by real property.
CCC § 1632(b).



(a) The Legislature hereby finds and declares all of the

following:

(1) This section was enacted in 1976 to increase consumer

information and protections for the state’s sizeable and growing

Spanish-speaking population.

(2) Since 1976, the state’s population has become increasingly

diverse and the number of Californians who speak languages other than

English as their primary language at home has increased

dramatically.

(3) According to data from the United States Census of 2000, of

the more than 12 million Californians who speak a language other than

English in the home, approximately 4.3 million speak an Asian

dialect or another language other than Spanish. The top five

languages other than English most widely spoken by Californians in

their homes are Spanish, Chinese, Tagalog, Vietnamese, and Korean.

Together, these languages are spoken by approximately 83 percent of

all Californians who speak a language other than English in their

homes.

(b) Any person engaged in a trade or business who negotiates

primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, orally

or in writing, in the course of entering into any of the following,

shall deliver to the other party to the contract or agreement and

prior to the execution thereof, a translation of the contract or

agreement in the language in which the contract or agreement was

negotiated, which includes a translation of every term and condition

in that contract or agreement:

(1) A contract or agreement subject to the provisions of Title 2

(commencing with Section 1801) of, and Chapter 2b (commencing with

Section 2981) and Chapter 2d (commencing with Section 2985.7) of

Title 14 of, Part 4 of Division 3.

(2) A loan or extension of credit secured other than by real

property, or unsecured, for use primarily for personal, family or

household purposes.

(3) A lease, sublease, rental contract or agreement, or other term

of tenancy contract or agreement, for a period of longer than one

month, covering a dwelling, an apartment, or mobilehome, or other

dwelling unit normally occupied as a residence.

(4) Notwithstanding paragraph (2), a loan or extension of credit

for use primarily for personal, family or household purposes where

the loan or extension of credit is subject to the provisions of

Article 7 (commencing with Section 10240) of Chapter 3 of Part 1 of

Division 4 of the Business and Professions Code, or Division 7

(commencing with Section 18000), or Division 9 (commencing with

Section 22000) of the Financial Code.

(5) Notwithstanding paragraph (2), a reverse mortgage as described

in Chapter 8 (commencing with Section 1923) of Title 4 of Part 4 of

Division 3.

(6) A contract or agreement, containing a statement of fees or

charges, entered into for the purpose of obtaining legal services,

when the person who is engaged in business is currently licensed to

practice law pursuant to Chapter 4 (commencing with Section 6000) of

Division 3 of the Business and Professions Code.

(7) A foreclosure consulting contract subject to Article 1.5

(commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of

Division 3.

(c) Notwithstanding subdivision (b), for a loan subject to this

part and to Article 7 (commencing with Section 10240) of Chapter 3 of

Part 1 of Division 4 of the Business and Professions Code, the

delivery of a translation of the statement to the borrower required

by Section 10240 of the Business and Professions Code in any of the

languages specified in subdivision (b) in which the contract or

agreement was negotiated, is in compliance with subdivision (b).

(d) At the time and place where a lease, sublease, or rental

contract or agreement described in subdivision (b) is executed,

notice in any of the languages specified in subdivision (b) in which

the contract or agreement was negotiated shall be provided to the

lessee or tenant.

(e) Provision by a supervised financial organization of a

translation of the disclosures required by Regulation M or Regulation

Z, and, if applicable, Division 7 (commencing with Section 18000) or

Division 9 (commencing with Section 22000) of the Financial Code in

any of the languages specified in subdivision (b) in which the

contract or agreement was negotiated, prior to the execution of the

contract or agreement, shall also be deemed in compliance with the

requirements of subdivision (b) with regard to the original contract

or agreement.

(1) “Regulation M” and “Regulation Z” mean any rule, regulation,

or interpretation promulgated by the Board of Governors of the

Federal Reserve System and any interpretation or approval issued by

an official or employee duly authorized by the board to issue

interpretations or approvals dealing with, respectively, consumer

leasing or consumer lending, pursuant to the Federal Truth in Lending

Act, as amended (15 U.S.C. Sec. 1601 et seq.).

(2) As used in this section, “supervised financial organization”

means a bank, savings association as defined in Section 5102 of the

Financial Code, credit union, or holding company, affiliate, or

subsidiary thereof, or any person subject to Article 7 (commencing

with Section 10240) of Chapter 3 of Part 1 of Division 4 of the

Business and Professions Code, or Division 7 (commencing with Section

18000) or Division 9 (commencing with Section 22000) of the

Financial Code.

(f) At the time and place where a contract or agreement described

in paragraph (1) or (2) of subdivision (b) is executed, a notice in

any of the languages specified in subdivision (b) in which the

contract or agreement was negotiated shall be conspicuously displayed

to the effect that the person described in subdivision (b) is

required to provide a contract or agreement in the language in which

the contract or agreement was negotiated, or a translation of the

disclosures required by law in the language in which the contract or

agreement was negotiated, as the case may be. If a person described

in subdivision (b) does business at more than one location or branch,

the requirements of this section shall apply only with respect to

the location or branch at which the language in which the contract or

agreement was negotiated is used.

(g) The term “contract” or “agreement,” as used in this section,

means the document creating the rights and obligations of the parties

and includes any subsequent document making substantial changes in

the rights and obligations of the parties. The term “contract” or

“agreement” does not include any subsequent documents authorized or

contemplated by the original document such as periodic statements,

sales slips or invoices representing purchases made pursuant to a

credit card agreement, a retail installment contract or account or

other revolving sales or loan account, memoranda of purchases in an

add-on sale, or refinancing of a purchase as provided by, or pursuant

to, the original document.

The term “contract” or “agreement” does not include a home

improvement contract as defined in Sections 7151.2 and 7159 of the

Business and Professions Code, nor does it include plans,

specifications, description of work to be done and materials to be

used, or collateral security taken or to be taken for the retail

buyer’s obligation contained in a contract for the installation of

goods by a contractor licensed pursuant to Chapter 9 (commencing with

Section 7000) of Division 3 of the Business and Professions Code, if

the home improvement contract or installation contract is otherwise

a part of a contract described in subdivision (b).

Matters ordinarily incorporated by reference in contracts or

agreements as described in paragraph (3) of subdivision (b),

including, but not limited to, rules and regulations governing a

tenancy and inventories of furnishings to be provided by the person

described in subdivision (b), are not included in the term “contract”

or “agreement.”

(h) This section does not apply to any person engaged in a trade

or business who negotiates primarily in a language other than

English, as described by subdivision (b), if the party with whom he

or she is negotiating is a buyer of goods or services, or receives a

loan or extension of credit, or enters an agreement obligating

himself or herself as a tenant, lessee, or sublessee, or similarly

obligates himself or herself by contract or lease, and the party

negotiates the terms of the contract, lease, or other obligation

through his or her own interpreter.

As used in this subdivision, “his or her own interpreter” means a

person, not a minor, able to speak fluently and read with full

understanding both the English language and any of the languages

specified in subdivision (b) in which the contract or agreement was

negotiated, and who is not employed by, or whose service is made

available through, the person engaged in the trade or business.

(i) Notwithstanding subdivision (b), a translation may retain the

following elements of the executed English-language contract or

agreement without translation: names and titles of individuals and

other persons, addresses, brand names, trade names, trademarks,

registered service marks, full or abbreviated designations of the

make and model of goods or services, alphanumeric codes, numerals,

dollar amounts expressed in numerals, dates, and individual words or

expressions having no generally accepted non-English translation. It

is permissible, but not required, that this translation be signed.

(j) The terms of the contract or agreement which is executed in

the English language shall determine the rights and obligations of

the parties. However, the translation of the contract or the

disclosures required by subdivision (e) in any of the languages

specified in subdivision (b) in which the contract or agreement was

negotiated shall be admissible in evidence only to show that no

contract was entered into because of a substantial difference in the

material terms and conditions of the contract and the translation.

(k) Upon a failure to comply with the provisions of this section,

the person aggrieved may rescind the contract or agreement in the

manner provided by this chapter. When the contract for a consumer

credit sale or consumer lease which has been sold and assigned to a

financial institution is rescinded pursuant to this subdivision, the

consumer shall make restitution to and have restitution made by the

person with whom he or she made the contract, and shall give notice

of rescission to the assignee. Notwithstanding that the contract was

assigned without recourse, the assignment shall be deemed rescinded

and the assignor shall promptly repurchase the contract from the

assignee.

Causes of Action for Slander of Title – The recordation of
the Notice of Default and Notice of Trustee’s Sale are privileged
under CCC § 47, pursuant to CCC § 2924(d)(1), and the recordation of
them cannot support a cause of action for slander of title against the
trustee.  Moreover, “[i]n performing acts required by [the article
governing non-judicial foreclosures], the trustee shall incur no
liability for any good faith error resulting from reliance on
information provided in good faith by the beneficiary regarding the
nature and the amount of the default under the secured obligation,
deed of trust, or mortgage. In performing the acts required by [the
article governing nonjudicial foreclosures], a trustee shall not be
subject to [the Rosenthal Fair Debt Collection Practices Act].”  CCC §
2924(b).

Cause of Action for Negligence – “Under the common law,
banks ordinarily have limited duties to borrowers. Absent special
circumstances, a loan does not establish a fiduciary relationship
between a commercial bank and its debtor. Moreover, for purposes of a
negligence claim, as a general rule, a financial institution owes no
duty of care to a borrower when the institution’s involvement in the
loan transaction does not exceed the scope of its conventional role as
a mere lender of money. As explained in Sierra-Bay Fed. Land Bank
Assn. v. Superior Court (1991) 227 Cal.App.3d 318, 334, 277 Cal.Rptr.
753, “[a] commercial lender is not to be regarded as the guarantor of
a borrower’s success and is not liable for the hardships which may
befall a borrower. It is simply not tortious for a commercial lender
to lend money, take collateral, or to foreclose on collateral when a
debt is not paid. And in this state a commercial lender is privileged
to pursue its own economic interests and may properly assert its
contractual rights.”  Das v. Bank of America, N.A., 186 Cal. App. 4th
727, 740-741 (2010) (citations and quotations omitted).

Cause of Action for Breach of Contract – “A cause of action
for damages for breach of contract is comprised of the following
elements: (1) the contract, (2) plaintiff’s performance or excuse for
nonperformance, (3) defendant’s breach, and (4) the resulting damages
to plaintiff. It is elementary that one party to a contract cannot
compel another to perform while he himself is in default. While the
performance of an allegation can be satisfied by allegations in
general terms, excuses must be pleaded specifically.”  Durell v. Sharp
Healthcare, 183 Cal. App. 4th 1350, 1367 (2010) (citations and
quotations omitted).

Cause of Action for Breach of the Implied Covenant of Good
Faith and Fair Dealing – “[W]ith the exception of bad faith insurance
cases, a breach of the covenant of good faith and fair dealing permits
a recovery solely in contract.  Spinks v. Equity Residential Briarwood
Apartments, 171 Cal. App. 4th 1004, 1054 (2009).  In order to state a
cause of action for Breach of the Implied Covenant of Good Faith and
Fair Dealing, a valid contract between the parties must be alleged.
The implied covenant cannot be extended to create obligations not
contemplated by the contract.  Racine & Laramie v. Department of Parks
and Recreation, 11 Cal. App. 4th 1026, 1031-32 (1992).

Cause of Action for an Accounting – Generally, there is no
fiduciary duty between a lender and borrower.  Perlas v. GMAC Mortg.,
LLC, 187 Cal. App. 4th 429, 436 (2010).  Further, Plaintiff (borrower)
has not alleged any facts showing that a balance would be due from the
Defendant lender to Plaintiff.  St. James Church of Christ Holiness v.
Superior Court, 135 Cal. App. 2d 352, 359 (1955).  Any other duty to
provide an accounting only arises when a written request for one is
made prior to the NTS being recorded.  CCC § 2943(c).

Cause of Action for Constructive Fraud – “A relationship need
not be a fiduciary one in order to give rise to constructive fraud.
Constructive fraud also applies to nonfiduciary “confidential
relationships.” Such a confidential relationship may exist whenever a
person with justification places trust and confidence in the integrity
and fidelity of another. A confidential relation exists between two
persons when one has gained the confidence of the other and purports
to act or advise with the other’s interest in mind. A confidential
relation may exist although there is no fiduciary relation ….”
Tyler v. Children’s  Home Society, 29 Cal. App. 4th 511, 549 (1994)
(citations and quotations omitted).

Cause of Action for Breach of Fiduciary Duty by Lender –
“Absent special circumstances a loan transaction is at arm’s length
and there is no fiduciary relationship between the borrower and
lender. A commercial lender pursues its own economic interests in
lending money. A lender owes no duty of care to the borrowers in
approving their loan. A lender is under no duty to determine the
borrower’s ability to repay the loan. The lender’s efforts to
determine the creditworthiness and ability to repay by a borrower are
for the lender’s protection, not the borrower’s.”  Perlas v. GMAC
Mortg., LLC, 187 Cal. App. 4th 429, 436 (2010) (citations and
quotations omitted).

Cause of Action for Negligent Misrepresentation – “The
elements of negligent misrepresentation are (1) the misrepresentation
of a past or existing material fact, (2) without reasonable ground for
believing it to be true, (3) with intent to induce another’s reliance
on the fact misrepresented, (4) justifiable reliance on the
misrepresentation, and (5) resulting damage.  While there is some
conflict in the case law discussing the precise degree of
particularity required in the pleading of a claim for negligent
misrepresentation, there is a consensus that the causal elements,
particularly the allegations of reliance, must be specifically
pleaded.”  National Union Fire Ins. Co. of Pittsburgh, PA v. Cambridge
Integrated Services Group, Inc., 171 Cal. App. 4th 35, 50 (2009)
(citations and quotations omitted).

Fraud – Statute of Limitations- The statute of limitations for
fraud is three years.  CCP § 338(d).  To the extent Plaintiff wishes
to rely on the delayed discovery rule, Plaintiff must plead the
specific facts showing (1) the time and manner of discovery and (2)
the inability to have made earlier discovery despite reasonable
diligence.”  Fox v. Ethicon Endo-Surgery, Inc., 35 Cal. 4th 797, 808
(2005).

Cause of Action for Fraud, Requirement of Specificity – “To
establish a claim for fraudulent misrepresentation, the plaintiff must
prove: (1) the defendant represented to the plaintiff that an
important fact was true; (2) that representation was false; (3) the
defendant knew that the representation was false when the defendant
made it, or the defendant made the representation recklessly and
without regard for its truth; (4) the defendant intended that the
plaintiff rely on the representation; (5) the plaintiff reasonably
relied on the representation; (6) the plaintiff was harmed; and, (7)
the plaintiff’s reliance on the defendant’s representation was a
substantial factor in causing that harm to the plaintiff. Each element
in a cause of action for fraud must be factually and specifically
alleged. In a fraud claim against a corporation, a plaintiff must
allege the names of the persons who made the misrepresentations, their
authority to speak for the corporation, to whom they spoke, what they
said or wrote, and when it was said or written.”  Perlas v. GMAC
Mortg., LLC, 187 Cal. App. 4th 429, 434 (2010) (citations and
quotations omitted).

Cause of Action for Violation of CCC §§ 2923.52 and / or
2923.53 – There is no private right of action.  Vuki v. Superior
Court, 189 Cal. App. 4th 791, 795 (2010).

Cause of Action Under CCC § 2923.6 – There is no private
right of action under Section 2923.6, and it does not operate
substantively.  Mabry v. Superior Court, 185 Cal. App. 4th 208,
222-223 (2010).  “Section 2923.6 merely expresses the hope that
lenders will offer loan modifications on certain terms.”

Cause of Action Under CCC § 2923.5, Post Trustee’s Sale –
There is no private right of action under Section 2923.5 once the
trustee’s sale has occurred.  The “only remedy available under the
Section is a postponement of the sale before it happens.”  Mabry v.
Superior  Court, 185 Cal. App. 4th 208, 235 (2010).

SEE LIVINGLIES LITIGATION SUPPORT AT LUMINAQ.COM EDITOR'S NOTE: Finding that lawyers and judges are confused about the meaning and use of terms like "real party in interest" and "standing," it hardly comes as a surprise that pro se litigants and other homeowners are confused as well. These concepts, which have been used and abused for years now, lie at the crux of the foreclosures and the reason why they should not be allowed to proceed. In plain … Read More

via Livinglies's Weblog

In a recent court decision homeowners in Los Angeles were foreclosed. The foreclosing lender then filed an eviction action (unlawful detainer); the former owners stipulated the eviction judgment. The Homeowners filed suit for wrongful foreclosure.

The claim was that a Notice of Default was recorded on behalf of ‘Option One’ as beneficiary, but there was no substitution showing that Option One was the new beneficiary of record, and the foreclosure was conducted on behalf a trustee for which there was no substitution recorded.

The court dismissed the homeowners lawsuit. The court found that no substitution showing Option One as the new beneficiary of record with the statutory authority to designate a substituted trustee. The beneficiary of record remained Home Loans USA, Inc., the original beneficiary and lender to plaintiff in her refinance transaction. But even so, the eviction judgment which the homeowners stipulated to was res judicata as to plaintiffs’ claims in this action which all arise from the alleged invalidity of the foreclosure sale- they essentially agreed that it was already determined that there were no defects in the foreclosure, and that the lender had good title with which to evict them. “Res Judicata” means that the issue was already determined by a court.

The court stated “By stipulating to judgment against them, plaintiffs conceded the validity of Wells Fargo’s allegations that the sale had been duly conducted and operated to transfer “duly perfected” legal title to the property.”

Unlawful Detainer is a quick proceeding, and the trial seldom gets 30 minutes of court time. This decision will encourage sophisticated foreclosing lenders to move to eviction quickly to cut off claims of wrongful foreclosure, and sophisticated homeowners to hire a real estate attorney to represent them. It is nearly impossible to prove defects in the foreclosure at an eviction trial, and the owner must file their own suit and obtain an injunction from it going forward while they litigate the foreclosure.

Press Release

Release Date: April 13, 2011

For immediate release

The Federal Reserve Board on Wednesday announced formal enforcement actions requiring 10 banking organizations to address a pattern of misconduct and negligence related to deficient practices in residential mortgage loan servicing and foreclosure processing. These deficiencies represent significant and pervasive compliance failures and unsafe and unsound practices at these institutions.

The Board is taking these actions to ensure that firms under its jurisdiction promptly initiate steps to establish mortgage loan servicing and foreclosure processes that treat customers fairly, are fully compliant with all applicable law, and are safe and sound.

The 10 banking organizations are: Bank of America Corporation; Citigroup Inc.; Ally Financial Inc.; HSBC North America Holdings, Inc.; JPMorgan Chase & Co.; MetLife, Inc.; The PNC Financial Services Group, Inc.; SunTrust Banks, Inc.; U.S. Bancorp; and Wells Fargo & Company. Collectively, these organizations represent 65 percent of the servicing industry, or nearly $6.8 trillion in mortgage balances. All 10 actions require the parent holding companies to improve holding company oversight of residential mortgage loan servicing and foreclosure processing conducted by bank and nonbank subsidiaries.

In addition, the enforcement actions order the banking organizations that have servicing entities regulated by the Federal Reserve (Ally Financial, SunTrust, and HSBC) to promptly correct the many deficiencies in residential mortgage loan servicing and foreclosure processing. Those deficiencies were identified by examiners during reviews conducted from November 2010 to January 2011.

The Federal Reserve believes monetary sanctions in these cases are appropriate and plans to announce monetary penalties. These monetary penalties will be in addition to the corrective actions that the banking organizations are expected to take pursuant to the enforcement actions.

The enforcement actions complement the actions under consideration by the federal and state regulatory and law enforcement agencies, and do not preclude those agencies from taking additional enforcement action. The Federal Reserve continues to work with other federal and state authorities to resolve these matters.

The actions taken Wednesday require each servicer to take a number of actions, including to make significant revisions to certain residential mortgage loan servicing and foreclosure processing practices. Each servicer must, among other things, submit plans acceptable to the Federal Reserve that:

• strengthen coordination of communications with borrowers by providing borrowers the name of the person at the servicer who is their primary point of contact;
• ensure that foreclosures are not pursued once a mortgage has been approved for modification, unless repayments under the modified loan are not made;
• establish robust controls and oversight over the activities of third-party vendors that provide to the servicers various residential mortgage loan servicing, loss mitigation, or foreclosure-related support, including local counsel in foreclosure or bankruptcy proceedings;
• provide remediation to borrowers who suffered financial injury as a result of wrongful foreclosures or other deficiencies identified in a review of the foreclosure process; and
• strengthen programs to ensure compliance with state and federal laws regarding servicing, generally, and foreclosures, in particular.

The Federal Reserve will closely monitor progress at the firms in addressing these matters and will take additional enforcement actions as needed.

In addition to the actions against the banking organizations, the Federal Reserve on Wednesday announced formal enforcement actions against Lender Processing Services, Inc. (LPS), a domestic provider of default-management services and other services related to foreclosures, and against MERSCORP, Inc. (MERS), which provides services related to tracking and registering residential mortgage ownership and servicing, acts as mortgagee of record on behalf of lenders and servicers, and initiates foreclosure actions. These actions address significant compliance failures and unsafe and unsound practices at LPS and its subsidiaries, and at MERS and its subsidiary. The action requires LPS to address deficient practices related primarily to the document execution services that LPS, through its subsidiaries DocX, LLC, and LPS Default Solutions, Inc., provided to servicers in connection with foreclosures. MERS is required to address significant weaknesses in, among other things, oversight, management supervision, and corporate governance. The LPS action is being taken jointly with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision, while the MERS action is being taken jointly with those agencies and the Federal Housing Finance Agency.

The Federal Reserve Board based its enforcement actions on the findings of the interagency reviews of the major mortgage servicers, LPS, and MERS. A summary of the findings from the reviews of the mortgage servicers is available in the Interagency Review of Foreclosure Policies and Practices,which is simultaneously being released by the Federal Reserve Board and the other agencies.

Attachments:

• Interagency Review of Foreclosure Policies and Practices (461 KB PDF)
• Consent Order for Bank of America Corp. (34 KB PDF)
• Consent Order for Citigroup Inc. and CitiFinancial Credit Co. (28 KB PDF)
• Consent Order for Ally Financial, Inc., ResCap, GMAC Mortgage, and Ally Bank (87 KB PDF)
• Consent Order for HSBC North America Holdings, Inc. and HSBC Finance Corp. (76 KB PDF)
• Consent Order for JPMorgan Chase & Co. and EMC Mtge. (39 KB PDF)
• Consent Order for MetLife, Inc. (25 KB PDF)
• Consent Order for PNC Financial Svs. Group, Inc. (25 KB PDF)
• Consent Order for SunTrust Banks, Inc., SunTrust Bank, and SunTrust Mortgage (76 KB PDF)
• Consent Order for U.S. Bancorp (25 KB PDF)
• Consent Order for Wells Fargo & Co. (25 KB PDF)
• Consent Order for LPS (47 KB PDF)
• Consent Order for MERS (48 KB PDF)

Associated Press

Homeowner sues mortgage servicer over HAMP denial

LOS ANGELES — A California homeowner is suing the mortgage servicing unit of Morgan Stanley, claiming the company had no intention of permanently modifying her home loan payments to an affordable amount despite having her make a slew of trial payments under a federal program designed to help homeowners avoid foreclosure.

The complaint, which was filed Thursday in U.S. District Court for the Northern District of California, accuses Saxon Mortgage Services Inc. of breach of contract and deceptive debt collection, among other claims, and seeks class-action status.

In the lawsuit, Marie Gaudin of Daly City contends Saxon offered her a loan modification trial plan under the Home Affordable Modification Program on June 1, 2009.

The plan called for Gaudin to make three trial payments on her mortgage and provide any documents needed by Saxon to evaluate the proposed loan modification.

Gaudin claims she made all the payments and complied with the documentation requests, but wasn’t offered a permanent HAMP loan modification once the three-month trial plan period ended.

agged out the process for months, while asking her to continue making payments.

Fraudulent Threats – By Foreclosure Lawyers

SEE LIVINGLIES LITIGATION SUPPORT AT LUMINAQ.COM

EDITOR’S COMMENT: About the only thing the lawyers have left is intimidation and trickery. Don’t believe a word you are told by the pretender lender or the lawyer for the pretender lender. It is all a game to them. The goal is for them to get your house for free. They never loaned you the money and they never purchased the loan. They have nothing to lose by going after your house because nobody is stopping them and nobody is holding them accountable. They don’t even lose anything if they lose the case because the number of cases lost (3%) is less than the normal default rate on valid mortgages. They will use ridicule and outright fabrication and forgery of documents combined with lying in court and introducing witnesses that don’t know a thing about your case. OBJECT!

And when some lawyer tries a collection stunt like this (see below), use it against him every way you can.

Fraudulent Threats – By Foreclosure Lawyers

Yesterday, March 24, 2011, 9:41:13 PM | Mark Stopa

From Neil Garfield:

WALL STREET, realizing it really doesn’t have a leg to stand on in Court and that an increasing number of decisions are going against them for simple, black letter law reasons, is attempting an end run around the Court system. In Florida a House panel has moved a bill that would give the legislature power over rule-making IN THE COURT SYSTEM! It sounds innocuous — but what it does is allow pretenders to foreclose even when they lack standing, are not the real party in interest, are not the creditor and have no legal relationship with a creditor that has a legal interest in a home loan. They are going to redefine those legal precepts that have governed an orderly society for hundreds of years so they can GET ANOTHER FREE HOUSE — ACTUALLY MILLIONS OF THEM TO ADD TO THE MILLIONS THEY HAVE TAKEN.

I don’t know when some clerk in a recording office is suddenly going to be in full realization that these houses are being stolen contrary to the law the clerk swore to uphold, but it’s coming. The  homes are being “bought” with a piece of paper (like a derivative) that has no value and contrary to law in the form of what they are calling a credit bid. But the credit bid can ONLY come from a creditor.

SO you have a company that lent no money, purchased no receivable, received no note or mortgage, nor any valid agency authority making the bid and then the title gets whipped around and put into entities that are “bankruptcy-remote” (code for protecting the thieves) and who are taking their order from unidentified people who work for unidentified companies contrary to the interests of either the investor who put up the money or the borrower who put up his home as collateral on a loan that was misrepresented to both as being worth less than the value of the property when the truth was quite the opposite.

WHILE THEY CONCEDE IT WOULD TAKE A CONSTITUTIONAL AMENDMENT TO DO IT, THAT IS EXACTLY WHAT THEY ARE PUSHING IN FLORIDA AND OTHER STATES. IT IS A FRONTAL ASSAULT ON THE BASIS OF  GOVERNMENT WE HAVE — THREE BRANCHES EACH WITH THEIR OWN POWERS THAT CANNOT BE ASSUMED BY THE OTHERS.

If they succeed, the very act would be unconstitutional on the Federal level but who cares? They will have passed a law, changed the state constitution, and given themselves years to acquire more FREE HOUSES. Just because they didn’t make the loan, just because they didn’t buy the loan and just because they purposely lied to the borrower and the investor at both closings (where the investor put up the money and where the loan was funded) — that’s no reason to put an absolute stop on foreclosures!

The good news is that we are seeing desperate measures from desperate people. The house cards is about to tumble and neither the government nor the megabanks can stop it. The plain truth is that the banks have no real assets to support their structure or infrastructure but they are pretending they do and the government is letting them. Funny how the free market and separation of three branches of government is going to make the correction — another example, bankers, of be careful what you wish for.

The bad news is that it is going to work unless people get active and let their legislators know what is going on. Let them know you want the government that America started with and no redo’s, losing the court system as a check on the powers of the legislature and executive branch. If they win, America is over with two branches of government instead of three. It is the same thing as those contracts with insurance companies and investment firms that provide for “arbitration” with their own arbitrators. The independence of the judiciary will be destroyed, along with any chance for anyone to get a fair shake. The coup d’etat is not nearly over. We are still only in the 3rd or 4th inning of a nine inning game. You are up to bat. GO GET ‘EM!!!

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Dr. Housing Bubble Blog Friday, March 04, 2011, 2:43:53 AM Four financial corners of California – real estate and broker licensees continue to decline, banks extend average foreclosure to 285 days, underemployment surges to 19.9 percent nationwide, and Federal Reserve now largest U.S. debt holder. Friday, March 04, 2011, 2:43:53 AM | drhousingbubble California home prices continue on a downward and inevitable trend lower reflecting an underlying … Read More

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Oregon foreclosures stopped by judges’ rulings Yesterday, March 05, 2011, 11:01:45 PM | dinsfla Published: Saturday, March 05, 2011, 7:34 PM     Updated: Saturday, March 05, 2011, 7:47 PM By Brent Hunsberger, The Oregonian The sales of hundreds of foreclosed homes in Oregon have been halted or withdrawn in recent weeks after federal judges repeatedly questioned […] … Read More

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Financial dismantling of the American middle class in 8 charts – Peak debt, credit card addiction withdrawal, banks hoarding cash, financial sector dominance in pay, Federal debt will never be paid off, and struggles of the middle class. Posted by mybudget360 in bailout, banks, corporate power, crooks, debt, economy, income, middle class, recession, wall street 0 Comments The American economy runs on high octane debt.  Debt has been welcomed by m … Read More

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Oregon foreclosures stopped by judges’ rulings Yesterday, March 05, 2011, 11:01:45 PM | dinsfla Published: Saturday, March 05, 2011, 7:34 PM     Updated: Saturday, March 05, 2011, 7:47 PM By Brent Hunsberger, The Oregonian The sales of hundreds of foreclosed homes in Oregon have been halted or withdrawn in recent weeks after federal judges repeatedly questioned […] … Read More

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Securitization Chain-of-Title: the US Bank v. Congress ruling Today, March 06, 2011, 7 hours ago | Adam Levitin Over on Housing Wire, Paul Jackson is crowing that chain-of-title issues in mortgage securitization are overblown because an Alabama state trial court rejected such arguments in a case ironically captioned U.S. Bank v. Congress. But let’s actually consider whether the opinion matters, what the court actually did and did not say, and whe … Read More

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Washington State Sells Out To The Banksters Today, March 06, 2011, 4 hours ago | genesis There is a bill pending before the Washington Legislature that would "reform" foreclosure procedures.  Among the provisions of SB-5275 is: 7 (a) That, for residential real estate property, before the notice of trustee's sale is recorded, transmitted, or served, the trustee shall have proof that the beneficiary (bank) is the owner of the promissory note or obl … Read More

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The Market Ticker – The MERS Edifice Is Being Eaten…. Today, March 06, 2011, 3 hours ago | genesis …. from within: FOR more than a decade, the American real estate market resembled an overstuffed novel, which is to say, it was an engrossing piece of fiction. Yes, and let's never forget how that happened.  Banks made loans they knew people couldn't pay and didn't meet quality standards (now a matter of sworn testimony, not presumption) and sol … Read More

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1
Filed 2/18/11
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
JOSE GOMES,
Plaintiff and Appellant,
v.
COUNTRYWIDE HOME LOANS, INC., et al.,
Defendants and Respondents.
D057005
(Super. Ct. No. 37-2009-00090347-CU-OR-CTL)
APPEAL from a judgment of the Superior Court of San Diego County, Steven R. Denton, Judge. Affirmed.
Gersten Law Group and Ehud Gersten for Plaintiff and Appellant.
Severson & Werson, Jan T. Chilton, Philip Barilovits and Jon D. Ives for Defendants and Respondents.
Jose Gomes appeals from a judgment entered following the trial court’s order sustaining, without leave to amend, a demurrer filed by defendants Countrywide Home Loans, Inc. (Countrywide); Mortgage Electronic Registration Systems, Inc. (MERS); and ReconTrust Company, N.A. (ReconTrust) (collectively “Defendants”).
2
As we will explain, we conclude that the trial court properly sustained the demurrer without leave to amend.
I
FACTUAL AND PROCEDURAL BACKGROUND
In February 2004 Gomes borrowed $331,000 from lender KB Home Mortgage Company to finance the purchase of real estate. In connection with that transaction, he executed a promissory note (the Note), which was secured by a deed of trust. The deed of trust identifies KB Home Mortgage Company as the “Lender” and identifies MERS as “acting solely as a nominee for Lender and Lender’s successors and assigns,” and states that “MERS is the beneficiary under this Security Instrument.”1
The role of MERS is central to the issues in this appeal. As case law explains, “MERS is a private corporation that administers the MERS System, a national electronic registry that tracks the transfer of ownership interests and servicing rights in mortgage loans. Through the MERS System, MERS becomes the mortgagee of record for participating members through assignment of the members’ interests to MERS. MERS is listed as the grantee in the official records maintained at county register of deeds offices. The lenders retain the promissory notes, as well as the servicing rights to the mortgages. The lenders can then sell these interests to investors without having to record the transaction in the public record. MERS is compensated for its services through fees
1 Similarly, the deed of trust states: “The beneficiary of this Security Instrument is MERS (solely as nominee for Lender and Lender’s successor and assigns) and the successors and assigns of MERS.”
3
charged to participating MERS members.” (Mortgage Elec. Registration Sys. v. Nebraska Dept. of Banking & Fin. (2005) 270 Neb. 529, 530 [704 N.W.2d 784, 785].) “A side effect of the MERS system is that a transfer of an interest in a mortgage loan between two MERS members is unknown to those outside the MERS system.” (Jackson v. Mortgage Elec. Registration Sys., Inc. (Minn. 2009) 770 N.W.2d 487, 491.)
The deed of trust that Gomes signed states that “Borrower [i.e., Gomes] understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender’s successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property . . . .”
Gomes defaulted on his loan payments, and he was mailed a notice of default and election to sell — recorded on March 10, 2009 — which initiated a nonjudicial foreclosure process. The notice of default was sent to Gomes by ReconTrust, which identified itself as an agent for MERS. Accompanying the notice of default was a declaration signed by an employee of Countrywide, which apparently was acting as the loan servicer.2
2 The deed of trust states that a loan servicer is the entity that “collects Periodic Payments due under the Note and this Security Instrument and performs other mortgage loan servicing obligations.”
4
In May 2009 Gomes filed a lawsuit against Countrywide, MERS and ReconTrust, alleging several causes of action and attaching as exhibits the deed of trust and the notice of default.
The only causes of action at issue in this appeal are the first and second causes of action, which are asserted against all Defendants.3
The first cause of action is titled “Wrongful Initiation of Foreclosure.” In that cause of action, Gomes states that he “does not know the identity of the Note’s beneficial owner” — as he believes that KB Home Mortgage Company sold it on the secondary mortgage market. He alleges on information and belief that “the person or entity who directed the initiation of the foreclosure process, whether through an agent of MERS or otherwise, was neither the Note’s rightful owner nor acting with the rightful owner’s authority.” In short, the first cause of action alleges, on information and belief, that MERS did not have authority to initiate the foreclosure because the current owner of the Note did not authorize MERS to proceed with the foreclosure. As a remedy, the first cause of action states that Gomes seeks damages in an amount “not less than $25,000.”4
3 The remaining causes of action were for (1) quiet title against Defendants; (2) violation of the Rosenthal Fair Debt Collection Practices Act (Civ. Code, § 1788.10 et seq.) against Countrywide; (3) violation of Civil Code section 2943, subdivision (b)(1) against Countrywide; and (4) unfair competition against Countrywide and MERS (Bus. & Prof. Code, § 17200). These causes of action were all disposed of in connection with the demurrer.
4 The complaint’s general prayer for relief also seeks an order rescinding the notice of default, along with other relief, but it is not clear whether those remedies are sought for the first cause of action.
5
The second cause of action seeks declaratory relief on the issue of whether “[Civil Code section 2924, subdivision (a)] allows a borrower, before his or her property is sold, to bring a civil action in order to test whether the person electing to sell the property is, or is duly authorized to so by, the owner of a beneficial interest in it.” Although designated a cause of action for declaratory relief, the second cause of action appears to serve simply as a legal argument in support of the first cause of action. Specifically, the second cause of action alleges that section 2924, subdivision (a) provides the legal authority for Gomes to assert the claim he has made in the first cause of action, namely that MERS lacks the authority to initiate the foreclosure process because it was not authorized to do so by the owner of the Note.
Defendants filed a demurrer. Demurring to the first cause of action, Defendants argued, among other things, that (1) to maintain a cause of action for wrongful foreclosure, Gomes must allege that he is able to tender the full amount due under the loan; (2) California’s nonjudicial foreclosure statute sets forth an exhaustive framework that does not provide for the type of relief that Gomes seeks; (3) the terms of the deed of trust authorize MERS to initiate a foreclosure proceeding; and (4) if Gomes is arguing that “he is entitled to avoid foreclosure until a defendant has produced the note,” such a claim has been uniformly rejected. Demurring to the second cause of action for declaratory relief, Defendants argued that it was “nothing more than a repeat of the legal theory” asserted in the first cause of action and should be rejected on the same basis.
The trial court sustained the demurrer, without leave to amend, and entered judgment in favor of Defendants.
6
II
DISCUSSION
A. Standard of Review
” ‘On appeal from an order of dismissal after an order sustaining a demurrer, our standard of review is de novo, i.e., we exercise our independent judgment about whether the complaint states a cause of action as a matter of law.’ ” (Los Altos El Granada Investors v. City of Capitola (2006) 139 Cal.App.4th 629, 650.) “A judgment of dismissal after a demurrer has been sustained without leave to amend will be affirmed if proper on any grounds stated in the demurrer, whether or not the court acted on that ground.” (Carman v. Alvord (1982) 31 Cal.3d 318, 324.) In reviewing the complaint, “we must assume the truth of all facts properly pleaded by the plaintiffs, as well as those that are judicially noticeable.” (Howard Jarvis Taxpayers Assn. v. City of La Habra (2001) 25 Cal.4th 809, 814.)
Further, “[i]f the court sustained the demurrer without leave to amend, as here, we must decide whether there is a reasonable possibility the plaintiff could cure the defect with an amendment. . . . If we find that an amendment could cure the defect, we conclude that the trial court abused its discretion and we reverse; if not, no abuse of discretion has occurred. . . . The plaintiff has the burden of proving that an amendment would cure the defect.” (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081, citations omitted (Schifando).) “[S]uch a showing can be made for the first time to the reviewing court . . . .” (Smith v. State Farm Mutual Automobile Ins. Co. (2001) 93 Cal.App.4th 700, 711, citation omitted.)
7
B. The Demurrer Was Properly Sustained
1. Gomes Has Not Identified a Legal Basis for an Action to Determine Whether MERS Has Authority to Initiate a Foreclosure Proceeding
California’s nonjudicial foreclosure scheme is set forth in Civil Code sections 2924 through 2924k, which “provide a comprehensive framework for the regulation of a nonjudicial foreclosure sale pursuant to a power of sale contained in a deed of trust.” (Moeller v. Lien (1994) 25 Cal.App.4th 822, 830 (Moeller).) “These provisions cover every aspect of exercise of the power of sale contained in a deed of trust.” (I. E. Associates v. Safeco Title Ins. Co. (1985) 39 Cal.3d 281, 285.) “The purposes of this comprehensive scheme are threefold: (1) to provide the creditor/beneficiary with a quick, inexpensive and efficient remedy against a defaulting debtor/trustor; (2) to protect the debtor/trustor from wrongful loss of the property; and (3) to ensure that a properly conducted sale is final between the parties and conclusive as to a bona fide purchaser.” (Moeller, at p. 830.) “Because of the exhaustive nature of this scheme, California appellate courts have refused to read any additional requirements into the non-judicial foreclosure statute.” (Lane v. Vitek Real Estate Industries Group (E.D. Cal. 2010) 713 F.Supp.2d 1092, 1098; see also Moeller, at p. 834 [“It would be inconsistent with the comprehensive and exhaustive statutory scheme regulating nonjudicial foreclosures to incorporate another unrelated cure provision into statutory nonjudicial foreclosure proceedings.”].)5
5 Although “California courts have repeatedly allowed parties to pursue additional remedies for misconduct arising out of a nonjudicial foreclosure sale when not
8
By asserting a right to bring a court action to determine whether the owner of the Note has authorized its nominee to initiate the foreclosure process, Gomes is attempting to interject the courts into this comprehensive nonjudicial scheme. As Defendants correctly point out, Gomes has identified no legal authority for such a lawsuit. Nothing in the statutory provisions establishing the nonjudicial foreclosure process suggests that such a judicial proceeding is permitted or contemplated.
In his declaratory relief cause of action, Gomes sets forth the purported legal authority for his first cause of action, alleging that Civil Code section 2924, subdivision (a), by “necessary implication,” allows for an action to test whether the person initiating the foreclosure has the authority to do so. We reject this argument. Section 2924, subdivision (a)(1) states that a “trustee, mortgagee, or beneficiary, or any of their authorized agents” may initiate the foreclosure process. However, nowhere does the statute provide for a judicial action to determine whether the person initiating the foreclosure process is indeed authorized, and we see no ground for implying such an action. (See Lu v. Hawaiian Gardens Casino, Inc. (2010) 50 Cal.4th 592, 596 [legislative intent, if any, to create a private cause of action is revealed through the language of the statute and its legislative history].) Significantly, “[n]onjudicial foreclosure is less expensive and more quickly concluded than judicial foreclosure, since there is no
inconsistent with the policies behind the statutes” (California Golf, L.L.C. v. Cooper (2008) 163 Cal.App.4th 1053, 1070), Gomes is not seeking a remedy for misconduct. He is seeking to impose the additional requirement that MERS demonstrate in court that it is authorized to initiate a foreclosure. As we will explain, such a requirement would be inconsistent with the policy behind nonjudicial foreclosure of providing a quick, inexpensive and efficient remedy. (See Moeller, supra, 25 Cal.App.4th at p. 830.)
9
oversight by a court, ‘[n]either appraisal nor judicial determination of fair value is required,’ and the debtor has no postsale right of redemption.” (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1236.) The recognition of the right to bring a lawsuit to determine a nominee’s authorization to proceed with foreclosure on behalf of the noteholder would fundamentally undermine the nonjudicial nature of the process and introduce the possibility of lawsuits filed solely for the purpose of delaying valid foreclosures.
Gomes cites three federal district court cases — two of which are unpublished —which he says recognize a right to bring a legal challenge to an entity’s authority to initiate a foreclosure process. (Weingartner v. Chase Home Finance, LLC (D. Nev. 2010) 702 F.Supp.2d 1276 (Weingartner); Castro v. Executive Trustee Services, LLC (D. Ariz. 2009, Feb. 23, 2009, No. CV-08-2156-PHX-LOA) 2009 U.S. Dist. Lexis 14134 (Castro); Ohlendorf v. Am. Home Mortgage Servicing (E.D. Cal. 2010, Mar. 31, 2010, No. CIV. S-09-2081 LKK/EFB) 2010 U.S. Dist. Lexis 31098 (Ohlendorf).)6 The cases are not controlling on us and, in any event, they are not on point, as none recognize a cause of action requiring the noteholder’s nominee to prove its authority to initiate a foreclosure proceeding. For instance, in Ohlendorf, the plaintiff alleged wrongful foreclosure on the ground that assignments of the deed of trust had been improperly
6 “Although we may not rely on unpublished California cases, the California Rules of Court do not prohibit citation to unpublished federal cases, which may properly be cited as persuasive, although not binding, authority.” (Landmark Screens, LLC v. Morgan, Lewis & Bockius, LLP (2010) 183 Cal.App.4th 238, 251, fn. 6, citing Cal. Rules of Court, rule 8.1115.)
10
backdated, and thus the wrong party had initiated the foreclosure process. (Ohlendorf, supra, 2010 U.S. Dist. Lexis at *22-23.) No such infirmity is alleged here. Moreover, the district court cases from outside of California are inapposite because they do not apply California nonjudicial foreclosure law. The court in Weingartner, supra, 702 F.Supp.2d 1276, 1282-1283, allowed a plaintiff’s claim for injunctive relief to proceed when he produced evidence that the trustee that initiated the foreclosure was not in fact the trustee at the time and thus could not proceed under Nevada law. In Castro, supra, 2009 U.S. Dist. Lexis 14134, the court allowed a claim for declaratory relief to proceed to determine whether the defendants were entitled to enforce a promissory note through nonjudicial foreclosure when the documents before the court indicated that the entities initiating the foreclosure process may not have had the rights of the holder of the note as required by Arizona law. (Id. at *15-16.) It is also significant that in each of these cases, the plaintiff’s complaint identified a specific factual basis for alleging that the foreclosure was not initiated by the correct party. Gomes has not asserted any factual basis to suspect that MERS lacks authority to proceed with the foreclosure. He simply seeks the right to bring a lawsuit to find out whether MERS has such authority. No case law or statute authorizes such a speculative suit.7
7 As we understand Gomes’s first and second causes of action, he is alleging that MERS might not have been authorized by the current holder of the Note to initiate foreclosure proceedings, and he is entitled to bring a lawsuit to determine whether MERS was in fact authorized. Although we focus on this legal theory in addressing whether the demurrer was properly sustained, we note that certain portions of Gomes’s appellate briefing suggest he may be arguing that even if MERS was authorized by the noteholder to initiate a foreclosure, MERS would not have standing to do so. For example, Gomes
11
Gomes appears to acknowledge that California’s nonjudicial foreclosure law does not provide for the filing of a lawsuit to determine whether MERS has been authorized by the holder of the Note to initiate a foreclosure. He argues, however, that we should nevertheless interpret the statute to provide for such a right because the “Legislature may not have contemplated or had time to fully respond to the present situation.” That argument should be addressed in the first instance to the Legislature, not the courts. Because California’s nonjudicial foreclosure statute is unambiguously silent on any right to bring the type of action identified by Gomes, there is no basis for the courts to create such a right. We therefore conclude that the trial court properly sustained Defendants’ demurrer to the first and second causes of action in Gomes’s complaint.8
cites a Kansas case holding that MERS did not have standing to intervene in a judicial foreclosure case. (Landmark Nat’l Bank v. Kesler (Kan. 2009) 216 P.3d 158, 166.) Gomes also contends that other out-of-state cases have found that “MERS’ limited role means it lacks independent standing to foreclose, or independent power to convey standing by transferring a note.” If, by citing these cases, Gomes means to argue that MERS lacks standing in California to initiate a nonjudicial foreclosure, the argument is without merit because under California law MERS may initiate a foreclosure as the nominee, or agent, of the noteholder. As we have explained, Civil Code section 2924, subdivision (a)(1) states that a “trustee, mortgagee, or beneficiary, or any of their authorized agents” may initiate the foreclosure process. (Italics added.)
8 As we sustain the demurrer on another ground, we need not and do not consider whether, as the trial court ruled, the first cause of action fails on the ground that Gomes has not pled that he is prepared to tender the amount owing on the Note. (See Arnolds Management Corp. v. Eischen (1984) 158 Cal.App.3d 575, 578 (“It is settled that an action to set aside a trustee’s sale for irregularities in sale notice or procedure should be accompanied by an offer to pay the full amount of the debt for which the property was security.”].)
12
2. Gomes Agreed in the Deed of Trust That MERS Is Authorized to Initiate a Foreclosure Proceeding
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.” The deed of trust contains no suggestion that the lender or its successors and assigns must provide Gomes with assurances that MERS is authorized to proceed with a foreclosure at the time it is initiated.9 Gomes’s agreement that MERS has the authority to
9 The parties debate in their briefing whether MERS should be considered a “beneficiary” of the deed of trust and thus authorized to initiate a foreclosure proceeding, regardless of whether it is authorized by the holder of the note, under the statutory provision stating that the beneficiary is entitled to initiate a foreclosure. (Civ. Code, § 2924, subd. (a)(1).) As the parties discuss, some federal district courts have observed that although identified as a “beneficiary” in a deed of trust, the role of MERS is not acting as a beneficiary as that term is commonly used, and that MERS in fact acts as a nominee, and thus an agent of the beneficiary. (See, e.g., Roybal v. Countrywide Home Loans, Inc. (D. Nev., Dec. 9, 2010, No. 2:10-CV-750-ECR-PAL) 2010 U.S. Dist. Lexis 131287, *11 [“there is a near consensus among district courts in this circuit that while MERS does not have standing to foreclose as a beneficiary, because it is not one, it does have standing as an agent of the beneficiary where it is the nominee of the lender, who is the true beneficiary”]; Weingartner, supra, 702 F.Supp.2d at p. 1280 [“Calling MERS a ‘beneficiary’ is both incorrect and unnecessary . . . ,” and “[c]ourts often hold that MERS does not have standing as a beneficiary because it is not one, regardless of what a deed of trust says, but that it does have standing as an agent of the beneficiary where it is the nominee of the lender (who is the ‘true’ beneficiary).”].) However, because Civil Code section 2924, subdivision (a)(1) and the deed of trust permit MERS to initiate foreclosure
13
foreclose thus precludes him from pursuing a cause of action premised on the allegation that MERS does not have the authority to do so.
Relying on the terms of the applicable deeds of trust, courts have rejected similar challenges to MERS’s authority to foreclose. In Pantoja v. Countrywide Home Loans, Inc. (N.D. Cal. 2009) 640 F.Supp.2d 1177, the federal district court pointed out that in the deed of trust, the plaintiff “distinctly granted MERS the right to foreclose through the power of sale provision, giving MERS the right to conduct the foreclosure process under [Civil Code s]ection 2924,” and therefore “[s]ince Plaintiff granted MERS the right to foreclose in his contract, his argument that MERS cannot initiate foreclosure proceedings is meritless.” (Id. at pp. 1189, 1190.) Similarly, another court pointed out that “[u]nder the mortgage contract, MERS has the legal right to foreclose on the debtor’s property. . . . MERS is the owner and holder of the note as nominee for the lender, and thus MERS can enforce the note on the lender’s behalf.” (Morgera v. Countrywide Home Loans, Inc. (E.D. Cal., Jan. 11, 2010, No. 2:09-cv-01476-MCE-GGH) 2010 U.S. Dist. Lexis 2037, *22, citation omitted.) Following this same approach, we conclude that Gomes’s first and second causes of action lack merit for the independent reason that by entering into the deed of trust, Gomes agreed that MERS had the authority to initiate a foreclosure.
as a nominee (i.e., agent) of the noteholder, we need not, and do not, decide whether MERS is also a “beneficiary” as that term is used in California’s nonjudicial foreclosure statute.
14
3. Gomes Has Not Established That He Can Cure the Defects in His Complaint by Amending
We must also consider whether Gomes has shown that there is a reasonable probability that he could cure the defects that we have identified in the first and second causes of action. (Schifando, supra, 31 Cal.4th at p. 1081.) Gomes contends that he could amend his complaint to “plead more specific theories . . . on information and belief” such as those theories discussed in Ohlendorf, supra, 2010 U.S. Dist. Lexis 31098, and Weingartner, supra, 702 F.Supp.2d 1276.
To attempt to state a claim as in Ohlendorf, Gomes would have to plead that the specific party who initiated the foreclosure process was not the proper party to do so because assignments of the deed of trust were improperly backdated. (Ohlendorf, supra, 2010 U.S. Dist. Lexis 31098 at *22-23.) To conform to the theory pled in Weingartner, Gomes would have to plead that a trustee initiated the foreclosure proceeding but was not actually the trustee at the time. (Weingartner, supra, 702 F.Supp.2d at p. 1282.) However, Gomes has conceded that he cannot plead facts meeting those scenarios “because respondents have not recorded any assignments” or provided any descriptions of assignments. A ” ‘[p]laintiff may allege on information and belief any matters that are not within his personal knowledge, if he has information leading him to believe that the allegations are true’ ” (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550, italics added), and thus a pleading made on information and belief is insufficient if it “merely assert[s] the facts so alleged without alleging such information that ‘lead[s] [the plaintiff] to believe that the allegations are true.’ ” (Id. at p. 551, fn. 5.) Because Gomes has
15
conceded that he has no specific information about assignments of the Note, he would not be able to plead on information and belief, based on facts leading him to believe they were true, the theories alleged in Ohlendorf and Weingartner. We therefore conclude that the trial court properly sustained the demurrer without leave to amend.
DISPOSITION
The judgment is affirmed.
IRION, J.
WE CONCUR:
NARES, Acting P. J.
MCINTYRE, J.

MERS Can Foreclose in California, State Appeals Court Rules

February 23, 2011, 4:42 PM EST

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By Thom Weidlich

(Updates with Coakley spokeswoman’s comment in ninth paragraph.)

Feb. 23 (Bloomberg) — Merscorp Inc., operator of the electronic-registration system that contains about half of all U.S. home mortgages, has the right to foreclose on defaulted borrowers in California, a state appeals court ruled.

U.S. courts have differed in recent years on whether Merscorp’s Mortgage Electronic Registration Systems, or MERS, unit has the right to bring a foreclosure action.

“Under California law MERS may initiate a foreclosure as the nominee, or agent, of the noteholder,” California Court of Appeal Justice Joan K. Irion in San Diego wrote in a Feb. 18 ruling.

Merscorp, based in Reston, Virginia, and owned by Fannie Mae, Freddie Mac, JPMorgan Chase & Co. and other mortgage- industry companies, said in a Feb. 16 announcement that it will propose a rule change to stop members from foreclosing in its name.

“It’s incorrect,” Ehud Gersten, the San Diego lawyer who brought the suit on behalf of the borrower, Jose Gomes, said of the ruling in a phone interview today. “I disagree with it completely.”

Gersten said he will appeal the decision.

Flood of Transfers

Merscorp was created in 1995 to improve servicing after county offices couldn’t deal with the flood of mortgage transfers, Karmela Lejarde, a MERS spokeswoman, said in an interview last year. MERS tracks servicing rights and ownership interests in mortgage loans on its electronic registry, allowing banks to buy and sell the loans without having to record the transfer with the county.

“The California decision validates the MERS process and procedures that we’ve used in nonjudicial states for many years,” Lejarde said in a statement today, referring to states such as California that don’t require court intervention to conduct foreclosures.

John L. O’Brien, the register of deeds for the southern part of Massachusetts’s Essex County, said in a statement yesterday that MERS has cost his district $22 million in recording fees, based on 148,663 MERS mortgages since 1998. O’Brien said he would forward that information to state Attorney General Martha Coakley. Coakley is investigating MERS, according to the Boston Globe in December. Amie Breton, a spokeswoman for Coakley, declined to comment.

Upheld Ruling

The California appeals court upheld a ruling that went against Gomes, who sued in 2009 to have the court declare that MERS couldn’t foreclose because the noteholder didn’t authorize it to. Gomes borrowed $331,000 in 2004 and was sent a notice of default in 2009, according to Irion’s decision.

The court, which heard arguments on the Gomes case the same day it released its decision, said that under the state’s “nonjudicial scheme” Gomes can’t bring such a lawsuit.

“Nowhere does the statute provide for a judicial action to determine whether the person initiating the foreclosure process is indeed authorized, and we see no ground for implying such an action,” wrote Irion, who was joined in her decision by the two other judges on the panel.

Asking MERS to demonstrate it has the right to foreclose “would be inconsistent with the policy behind nonjudicial foreclosure of providing a quick, inexpensive and efficient remedy” and would allow lawsuits to delay foreclosures, the judge wrote.

‘Speculative Suit’

Gomes didn’t allege any facts to suggest MERS lacked the right to foreclose, Irion said, calling his case “a speculative suit.” The state legislature would have to act to allow such litigation, she said.

Gomes also agreed, by signing the deed of trust securing the promissory note for the loan, that MERS had the authority to foreclose, the court said.

“Essentially, the Court of Appeal is saying that once somebody starts to foreclose,” borrowers “can’t seek any right from or question that person,” Gersten said in the interview. “The beneficiary under the deed of trust can authorize MERS to foreclose but they never did that. We don’t know who the beneficiary is.”

On Feb. 15, the appeals court ruled for MERS in a similar case brought by borrower Nancy G. Jimenez. Gersten, who also represents Jimenez, said he will appeal that decision.

MERS members have moved away from closing in MERS’s name because of confusion over its standing, Christopher L. Peterson, a law professor at the University of Utah in Salt Lake City who has written several articles on MERS, said in an interview last week.

‘Created Confusion’

MERS halted foreclosures in its name in Florida in 2006, according to rules on its website. Violation of the rule, which remains in effect, costs $10,000. Former Merscorp Chief Executive Officer R.K. Arnold said in a September 2009 deposition in an Alabama foreclosure case that MERS made that change because of a Florida court decision that “created confusion about whether we could” foreclose.

Merscorp announced Arnold’s retirement on Jan. 22.

The case is Gomes v. Countrywide Home Loans Inc., D057005, California Court of Appeal (San Diego).

COMBO TITLE AND SECURITIZATION SEARCH, REPORT, ANALYSIS ON LUMINAQ NOT QUITE THAT SIMPLE EDITOR'S NOTE: The assumption is that if MERS is screwed we are all saved. I have it on incontrovertible authority that the mega banks already have a plan mapped out for that and in fact they are already putting it into action. Considering their success in kicking the can down the road so far, any singing and dancing should be muted. You see they don't have t … Read More

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The Bizarre Mortgage “Settlement” Negotiations Today, March 04, 2011, 3 hours ago | Yves Smith We are getting only odd tidbits out of the so-called settlement negotiations among the fifty state attorneys general, various Federal banking regulators, and mortgage servicing miscreants (meaning all of them). As Matt Stoller pointed out last weekend, the lack of transparency is troubling. Nevertheless, certain things are apparent. 1. There has not bee … Read More

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Homeowner Suffers Horrific Injustice at the Hands of JPMorgan Chase Today, March 04, 2011, 2 hours ago | Foreclosure Fraud Repost from Mandelman Matters Homeowner Suffers Horrific Injustice at the Hands of JPMorgan Chase For over two years I’ve had a front row seat for the foreclosure crisis, the by-product of our government’s complete mishandling of the worst economic downturn in seventy years. During that time I’ve been exposed to some pretty h … Read More

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Daily Finance | What Do HSBC’s Foreclosure Moratorium and Robo-Signing Claims Really Mean? Today, March 04, 2011, 2 hours ago | Foreclosure Fraud Some excellent investigative journalism in this one… The author tracks down some HSBC robo-signed cases featuring Cheryl Samons and Xee Moua… Keep up the great work Abigail! What Do HSBC’s Foreclosure Moratorium and Robo-Signing Claims Really Mean? By ABIGAIL FIELD In HSBC’s 2010 annual report, the bank … Read More

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What lawyers who represent lenders and loan servicers really think about your attempt to fight to save your home from foreclosure.

Here is a recent email exchange I had with one of the large lender/loan servicers in regard to asserting my Client’s Truth in Lending rescission rights.

This email allows you to get a little flavor of what the big bad bailed out banks think about helping other people who need a bailout.

HERE WAS HIS EMAIL QUESTION TO ME:

It is a mystery to me why lawyers get involved with clients simply to delay the inevitable.  The only reason I’ve been able to fathom is that the lawyer gets paid instead of the bank, while the borrower continues to live in the house.  Doesn’t seem like a good way to keep one’s malpractice insurance premiums down.

I’m not suggesting that is what you’re doing here.  However, XXXXXXX must protect itself and the loan owner from such pointless shenanigans.

I’m not aware of a new date for the foreclosure sale, but this doesn’t mean that one hasn’t been set……

NOTICE HOW HE SEEMS INTENT ON LECTURING ME ABOUT MY MALPRACTICE INSURANCE AND ASSUMING EVERYTHING IS INEVITABLE.  IN HIS WORLD, THERE IS NO TAKING ON THE BANKS, NO QUESTIONING THE BANKS, NO DEFIANCE THAT WILL BE TOLERATED BY THE BANKS, THEY GOT THEIR MODIFICATION BUT HOW DARE YOU TRY TO ASSERT YOUR LEGAL RIGHTS, ESPECIALLY WHERE VALID TRUTH IN LENDING RESCISION RIGHTS WERE PRESENTED AS PROOF TO THIS GUY.  HERE IS MY RESPONSE TO THE GENTLEMAN.

XXXXXXXX,

I can appreciate your position here are a few mysteries I am looking for answers to:

(1) Why when banks get bailed out big time, do they act like no homeowner deserves a decent bailout?

(2) Why in all of my cases where I find a bona fide Truth in Lending (“TILA”) violation, does the lender always either (a) deny that the violation exists in the face of attached documentary evidence, or (b) refuse to even respond to a TILA rescission letter?

(3) Why do lenders/loan servicers routinely fail to address the question of who actually owns the loan? Or provide proof of such?

(4) Why do loan servicers routinely fail to respond, or fail to respond in a timely manner, to legitimate qualified written requests under RESPA?

(5) Why are lenders refusing to do short-sales at or near fair market values only to find that they get less at a foreclosure sale?

(6) Why are lenders/loan servicers routinely making blatantly false declarations under California Civil Code Section 2923.5?

(7) Why is California Civil code section 2923.6 routinely violated?

(8) Why do “lenders” continue to try to collect payments where the loan in question was already paid off via insurance, bailout money etc.?

(9) Why is it that MERS continues to try to pretend it is a beneficiary and foreclose on people?

(10) Why is it so many substitutions of trustee are invalid and the resulting Notice of Default invalid and not in compliance with California Foreclosure Laws?

(11) Why is it that other lawyers who represent banks (who are making out pretty nicely for their efforts) complaining about other lawyers who are fighting for Clients who want to keep their houses and exercise legal rights that they clearly have?

(12) Why won’t attorneys for lenders/investors be honest about sale dates?  Is there truly something to hide or is it a total lack of respect for attorneys who represent deadbeat homeowners?

As a lawyer, I am sure you are aware there are two sides of the coin here.  It is not a black and white issue.  Can you send me proof of who the owner of this loan is in the form of an indorsed promissory note that your client is in possession of?  I have not seen any proof.  Seriously, do not fault us for fighting for the rights of homeowners who are often facing severe financial hardship (usually for reasons out of their control – like a bogus economy), and who are fighting to keep a roof over their head, and using the legal rights the law affords them to fight the system that was setup to defeat them.

To your malpractice claim assertion, it is malpractice NOT to identify, stand-up and assert my Client’s legal rights – whatever you may think of them.

If you do not want to be straight up and inform us of the new sale date, and if foreclosure is inevitable, why not just tell me there is nothing that is going to be done, and the sale will occur whenever your Client feels like it.  I can live with that if you want to be honest.  If that is the truth let’s talk honestly about it.  I can handle the truth!

(parts omitted due to client confidentiality)

You are a beneficiary of this system partially created by your Clients, so I would not be flabbergasted by what you are dealing with.

This is a typical day in the life of dealing with big banks and fighting for our clients using every law that we can think of that may help in the fight to save a home from foreclosure.

Going hand in hand with this article, here is another post we posted discussing other reasons we work so hard to battle these banks:

Phoenix Foreclosure Defense Attorney strives to put the “TRUTH” back in Lending!

Some people have asked me, why are you passionate about foreclosure defense and helping Arizona homeowners? One of the answers I like to give is the following:

OUR MISSION: “WE ARE FIGHTING FOR “TRUTH IN LENDING” (a strange concept, i know!):

(1) WE ARE FIGHTING FOR TRUE AND ACCURATE DISCLOSURE OF A LOAN PRODUCT, ITS NATURE, AND TERMS (TELL PEOPLE THE TRUTH ABOUT THE LOANS THEY ARE LOCKING INTO). GIVE THEM THE CHARMS BOOKLET AND CALIFORNIA ARM DISCLOSURES

(2) WE ARE FIGHTING FOR TRUE AND FAIR DISCLOSURE OF THE PRICE-TAG FOR THE LOAN (APR AND FINANCE CHARGES THAT ARE TRUE AND ACCURATE). ACCURATE TRUTH IN LENDING STATEMENTS

(3) WE ARE FIGHTING FOR FAIR AND ACCURATE DISCLOSURE OF THE RIGHT TO CANCEL THE LOAN WHEN APPLICABLE (GIVE PEOPLE THEIR REQUIRED COPIES AND GIVE TRUE DATES UPON WHICH LOANS CAN BE RESCINDED)

(4) WE ARE FIGHITNG FOR FAIR AND HONEST UNDERWRITING THAT IS BASED UPON A CLIENTS TRUE ABILITY TO REPAY A LOAN (WHICH MAY MEAN VERIFYING INCOME AND TELLING SOME PEOPLE THEY DON’T QUALIFY) AND TRUE AND ACURATE APPRAISAL OF PROPERTY THAT SUPPORTS THE UNDERWRITING.

(5) WE ARE FIGHTING FOR FULL DISLCOSURE OF THE HOLDER OF THE LOAN (INVESTOR) AND PROOF AS TO WHO OWNS THE RIGHT TO BE PAID, AND THE RIGHT TO FORECLOSE, AND WHO MUST BY LAW CONTACT CALIFORNIA HOMEOWNERS TO DISCUSS LOAN MODIFICATIONS AND ASSESS BORROWER FINANCES.

(6) WE ARE FIGHTING FOR FULLFULL AND FAIR ACCOUNTING FOR PAYMENTS, LATE FEES, ESCROW CHARGES, AND OTHER CHARGES IN THE LOAN SERVICER’S BACK-ROOM. ANSWER THOSE QWR’S ON TIME, AND IN UNDERSTANDABLE DETAIL. STOP REPORTING NEGATIVE CREDIT DURING THIS PERIOD.

(7) WE ARE FIGHTING FOR HONESTY AND “TRUTH IN TRIAL PLANS” – IF HOMEOWNERS DON’T QUALIFY FOR A MORTGAGE RESTRUCTING / LOAN MODIFICATION, DON’T SEND THEM A TRIAL PLAN THAT LEADS THEM TO BELEIVE THEY DO. IN ADDITION, BE TRUTHFUL ABOUT THE PRECISE TERMS OF THE LOAN MODFIICATIONS (DISCLOSE THE TERMS CLEARLY) AND HONOR YOUR TRIAL PLAN AGREEMENTS.

ITS TIME THE LENDERS OPEN THE BOOKS AND SHOW US WHERE THE BAIL-OUT MONEY HAS GONE. WE NEED SOME TRANSPARENCY. WE NEED SOME ACCOUNTABILITY TO SHOW WHAT HAS BEEN DONE WITH TAX-PAYER MONEY. WAS YOUR LOAN ALREADY PAID OFF VIA THE BAILOUT, AND NOW THEY WANT TO COLLECT MORE MONEY FROM YOU FROM A LOAN THAT MAY HAVE BEEN ALREADY PAID? IF YOUR LOAN WAS SECURITIZED INTO A “LOAN POOL” IS THERE ANY CHANCE YOUR ENTIRE POOL OF LOAN WAS BAILED OUT AND PAID OFF? IF SO, DOES THAT MEAN THEY STILL GET TO COLLECT FROM YOU AS WELL? WHAT IS THAT? ISN’T THAT A WINDFALL……..UNJUST ENRICHMENT?

PEOPLE DESERVE TO BE REPRESENTED BY A FORECLOSURE DEFENSE LAWYER WHEN TRYING TO RESOLVE ONE OF BIGGEST PROBLEMS MOST HOMEOWNERS WILL EVER FACE. IN MANY CASES, A FORECLOSURE DEFENSE LAWYER CAN EVALUATE YOUR LOAN, REVIEW YOUR MORTGAGE DOCUMENTS (FORENSIC AUDIT), DEMAND THAT DEBTS BE VALIDATED, SEND MODIFICATION PROPOSALS, REVIEW TRIAL PLAN AND OTHER LOAN MODFICATION AGREEMENTS, ADVISE ON DEFICIENCY JUDGMENTS, DISCUSS POTENTIAL BANKRUPTCY AND SHORT-SALE OPTIONS, AND ENSURE THAT YOUR RIGHTS UNDER THE FORECLOSURE LAWS ARE ADHERED TO AND PROTECTED. THE BANKS HAVE EXPENSIVE LAWYERS ON THEIR TIME, YOU DESERVE TO BE REPRESENTED DURING THIS CONFUSING AND STRESSFUL ORDEAL. THIS IS THEIR GAME AND THEIR BATTLEFIELD.

IF YOU ARE AN ARIZONA HOMEOWNER PLEASE CONTACT US (877) 276-5084 begin_of_the_skype_highlighting              (877) 276-5084      end_of_the_skype_highlighting TO DISCUSS YOUR FORECLOSURE OR BANKRUPTCY CASE.