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Unlawful Detainer Delays
In some of my eviction defense cases having to do with an illegal foreclosure it is important to avoid trial at all costs.
California Judges favor the lenders and once the lender tender the Trustees deed the Judge will not consider any defense the former homeowner has. I have suggested to the narrow minded that they should dispense with the trial and allow the lender to file the trustees deed with the marshal and have people kicked without a trial. The learned Judge was not amused by my backhanded slap at the court not giving my client any due prosess protection afforded by the constitution.
The purpose then is to delay till the case can be consolidated with the Lender fraud trial without a bond or get an injunction in place. These are some of the methods. I thought it would be a good idea to cover of the more common delay procedures.
1. Motion to Quash Summons. California Code of Civil Procedure §418.10. This motion is intended to test the validity of the service of the complaint, the sufficiency of the summons. That is, whether the plaintiff has the basis to use the 5 day summons. The Code (Code of Civil Procedure §1167.4) requires that the motion to quash be set for hearing no earlier than three (3) days and no later than seven (7) days after the tenant’s last date to file their response to the complaint. Until the motion is heard and decided on, the tenant does not have to file an answer to the complaint. It would appear that after the filing of a Motion to Quash, when the tenant is required to file its response, the tenant can still file other delay motions. Regardless of the merits, if a tenant files a motion to quash, assuming the hearing date is properly set, such a motion will delay the tenant having to file an answer for over one week.
2. Demurrer. California Code of Civil Procedure §430.10. This procedure generally allows a tenant to object to the pleading based on defects apparent on the face of the pleading or object because the pleading is vague or ambiguous. This procedure may also be used in responding to the unlawful detainer Code of Civil Procedure §1170 allows a tenant to answer or demurrer to the complaint on or before the time needed to respond. Unlike the limitations on when a motion to quash can be set for hearing, there are no similar limitations on setting a hearing on the demurrer. The typical time for setting a hearing on a demurrer is not more than 35 days after the filing of the demurrer or earlier or later as the court may order.
A demurrer is really a “so what” objection. What the demurrer does is admit all of the pleadings for the purposes of the objection. Assuming all of the allegations are true, so what? Landlord, you still haven’t alleged a proper basis for the eviction. Or, the allegations are so confused or ambiguous as to make it impossible to respond to the pleading. In this case, the tenant, if not pushed can delay having to file an answer to the complaint for over a month! For some reason the legislature in its infinite wisdom put a limit of seven days on how far away the tenant can set a hearing on the motion to quash but then allows for a hearing on a demurrer over a month away.
Except for some rare jurisdictions, if the tenant sets a demurrer for a hearing a month away, the landlord’s recourse is to either wait for the thirty days and then after the hearing the tenant gets another five days after the hearing to file their answer. The landlord can alternatively go to the court and ask the court to reset the hearing on a shorter notice. The experience in Fresno is that the courts are willing to set the hearing on a very short notice. It would be better, however, if the legislature formally put a limit on the time of the hearing similar to the time for a motion to quash.
Somewhat similar to a demurrer is a motion to strike a portion of or all of a pleading (CCP§435). The timing for the hearing is that the motion shall be set no earlier than 21 days after filing of the motion, adding another five days if mailed. Thus delaying setting the matter for trial over twenty six days. It should be noted that in the unlawful detainer section of the code, the statutes provide that the tenant can file a motion to quash, a demurrer or file an answer. It does not reference motions to strike
3. Claims of Right to Possession. It seems that more often than owners would like, strangers are making claims of right to possession, asserting, under oath, that the person had been living in the rental unit at the time the landlord had filed its complaint. And , in most cases the landlord had no idea that there was anyone else in the unit. This surprise “subtenant” matter is all the more complicated if the reason for the eviction is non payment of a notice to pay rent or quit. Code of Civil Procedure §1161.2 requires that when one is serving a tenant for non payment, one must also serve any subtenants in actual possession of the premises. This can present a problem for a landlord. If the “subtenant” person can establish having lived in the premises at the time of the complaint being filed, then the person will assert that they should have been served with the notice to pay rent or quit. However, if the person living in the unit was unauthorized or unknown, the landlord wouldn’t want to serve this unauthorized person with the notice to pay rent or quit in fear of validating the person’s right to possession. It has been held that serving a fired employee with a notice to pay rent, even if the ex employee did not pay the demanded rent, transforms the ex employee’s status as a tenant at sufferance into a month to month tenant.
Whether the claim of right to possession has merit or not, simply filing the claim, the tenant gets another five to seven days delay in the lock out. There needs to be some clarification in the statute to establish that a person living with an authorized tenant cannot be considered a subtenant unless the person can establish that not only did the landlord know of the alleged subtenant but that the person’s sublease had been approved by the landlord before the landlord is required to serve the claimant with the notice to pay.
4. Lastly a Summary judgment motion that the lender has not “duly perfected” a proper Foreclosure under 2924. If we lose we appeal and since there has not been a trial therefor no eviction.
Facing Foreclosure in California?
The number of Foreclosures in California and across the Nation are on the rise. If you are facing foreclosure in California we can help. The foreclosure relief department at McCandless Firm, is comprised of a dedicated team of highly trained professionals, attorneys, underwriters, and brokers in the mortgage and loan industry. Our team will work diligently with your lender and/or invoke Federal Court Remedies to facilitate a solution that fits your budget and goals. The following are the most common ways we assist homeowners facing foreclosure.
Mortgage Modification:
The Mortgage Modification program allows most homeowners who can make payments keep their homes. Often, personal circumstances or an upward payment adjustment or “reset” will cause the homeowner to fall behind n their monthly payments. By actively counseling our clients and aggressively negotiating with their lenders we are capable of modifying the original loan to give our clients a fresh start in managing their home finances. Depending upon the individual needs of each client, modifications can range from a simple interest rate reduction resulting in a lower monthly payment to what is known as a “recapitalization agreement.” A recapitalization agreement takes all the “arrears” or monthly amounts that should have been paid but wasn’t paid, interest, fees, and missed payments and adds it to the principal of the mortgage loan. In many instances, we will negotiate the complete removal of principal above the current fair market value and “arrears”. Finally, we may be able to extend the life of your loan so that your payments are more easily manageable. This is a unique department of McCandless Law Firm that can be reach directly at (760) 733-8885
Lien Stripping:
The lien stripping program is available for individuals desiring to reorganize their debt using Federal Laws under Title 11 of the United States Code. The mortgage removal program can only be used in the context of a reorganization, often referred to as Chapter 13(see below). If you own a home with more than one mortgage, you may be able to completely remove or “avoid” the second and subsequent junior mortgages from your home and county records, thus leaving only the first original mortgage! If you qualify, all mortgages except the first would no longer be secured by your home, and you would stop all payments except the first immediately. There is nothing the creditor can do, provided you qualify for a simpe three part test: 1) The First Mortgage is equal to or higher than the fair market value of the home, 2) You have income, and 3) Your total unsecured debt is under 336,900 and your secured debt is under 1,010,650.
As of 2002, the Ninth Circuit Court of Appeals ruled in In Re: Sieglinde E Zimmer, that these mortgages on residential properties can removed if you qualify. In today’s declining real estate market, this ruling pretty much allows junior lien removal on most properties bought or refinanced since 2004. For instance, suppose you have a first mortgage of $500,000 and second mortgage of $150,000, and the house is worth $490,000.00. Under this program, the $150,000 gets removed and you only need to make monthly payments on the $500,000.
Wouldnt it be much easier to save your home if you only had a first mortgage and no other payments? Moreover, if the market turns around, think of all the equity you could build back up years from now.
Chapter 13 Reorganization:
The Chapter 13 “Reorganization,” allows you to consolidate all your debts into one low monthly payment. The payment amount is tailored to your budget. Chapter 13 is technically a Bankruptcy, but viewed at differently since it is not a “straight bankruptcy” which simply eliminates all debt without any payment whatsoever. Instead, it consolidates all missed mortgage payments or “arrears” and then spreads the repayment out over 3-5 years. The net result is that your mortgage is legally reinstated by Federal Court Order and you continue to make your normal mortgage payments. The lender is also under strict scrutiny to account to the Federal Court any fees they attempt to assert over your normal mortgage payments. For example, if you are $9,000 in arrears on your mortgage and your monthly mortgage payment is currently $3,000, your Chapter 13 payment would be approximately $150 per month. (60 months x $150 =$9,000) The new total monthly house payment would be $3,150. The Chapter 13 program results in a more realistic repayment plan than the short term plans currently offered by most lender outside of the laws under Title 11, and you maintain all your rights under TILA, RESPA, HOEPA, FDCPA, FCRA, etc.
Short Sale:
With our short sale program we are able to market and sell your property for at or below market value even though you may owe substantially more than that on the mortgage(s). A short sale will not only stop the foreclosure but will prevent the adverse credit implications associated with a foreclosure. If the short sale is done in conjunction with a bankruptcy filing the results are even more beneficial to the homeowner. Not only will the tax consequences be completely eliminated, but any shortage or “deficiency” will be discharged in the bankruptcy. The sale is generally easier to do since the lender knows there is no longer any personal recourse against the homeowner. Finally, with the filing of the bankruptcy, you are generally able to extend the length of time remaining in the property. Its not uncommon to remain a year of longer in your property without paying using a short sale combined with a bankruptcy.
Equity Recoupment:
The Equity Recoupment program allows our clients to recoup what they may have lost as a result of predatory lending and the current mortgage crisis. Strategically, by using a combination of the above programs and state consumer protection laws, McCandless Law Firm developed and pioneered a program that allows homeowners to legally remain in their home for 8-12 months or even years without making a single payment! Though it may sound to good to be true, the program is rooted in both California and Federal consumer protection statutes and the civil code, and the illegal shortcuts lenders have been taking over the past decade. Many homeowners are not aware of the vast state and federal laws that have been created over the last 20 years to address the very issues we are facing today with widespread foreclosures and predatory lending. For example if your monthly payment is $3,000 per month, in 8 months you will recoup $24,000, in 16 months that is nearly $50,000. Your recoupment will continue to grow the longer we are able to keep you in your home.
Deed In Lieu of Foreclosure:
If you are behind on your monthly mortgager payments and are unable to sell your home at the current market value, a deed in lieu of foreclosure may be an option to prevent a foreclosure from tarnishing your credit. The process involves giving the property directly back to the lender, or “deeding it back in lieu of foreclosure.” The lender benefits as they are able to mitigate the additional losses they would incur from having to proceed with a lengthy foreclosure. Often times the lender will offer this option at the onset of a foreclosure proceeding, however in our experiences lenders will seldom follow through and effectuate the transfer without Attorney intervention. By stepping in and advocating for our clients we are able to 1) Get the homeowner released from most or all of the personal indebtedness associated with the defaulted loan 2) Prevent the homeowner from experiencing the public notoriety of a foreclosure and subsequent credit implications, and 3) Put money in our client’s pocket via “Cash for Keys”. Though it may appear to be a viable means of walking from your home unscathed, it is a complicated process requiring competent legal and tax advice.
Resource Links on Foreclosure:
Advanced Reading:
Predatory home loans, like all home mortgages, are increasingly subject to assignment. Now, more than ever before, a market in assignment of loans casts a shadow over how those loans are originated and serviced. While assignment of loans has always been common, relatively new and complex patterns, alternatively referred to as structured finance or securitization, have rendered the assumptions of traditional assignment law quaintly over-generalized.
Today mortgage loans, particularly more expensive loans marketed to those with poor credit histories, are likely to be purchased by investment trusts, bundled into large geographically diverse pools with many other loans, and sold as securities to investors. Unlike the law, which has been slow to react to this trend, mortgage lenders, brokers, and servicers now actively bargain with a shrewd eye on the ultimate destination of the loans they facilitate.
Many scholars of mortgage lending and secured credit have for the past several years gone about the project of explaining, predicting, and attempting to influence this secondary market in home mortgages. Some have pointed out that lenders no longer “lend” in the sense that they themselves expect repayment. Rather they manufacture a commercial product – borrowers – that are measured, sold, and at times discarded by a consuming capital market. Many of today’s mortgage lenders are assignment production companies that create income streams for the nation’s capital markets.
Several scholars have demonstrated significant benefits from this process. Collectively, investors have large amounts of capital, but a limited ability to originate and monitor individual loans. Conversely, mortgage lenders are well situated to make loans, but are typically constrained in the number of loans they can make by their limited access to capital. Provided they can surmount hurdles like trust, information asymmetry, transaction costs, and taxes, these two groups have much to offer each other by way of mutually beneficial exchange.
The engineering of securitization conduits is a financial science of overcoming the hurdles separating these two groups. All this is well and good, in that homeowners receive new access to cheap capital, making (other things being equal) home ownership more affordable at the margins. When everything goes according to plan, society has much to gain from securitization of home mortgage loans.
But sadly, like many new technologies, securitization comes with a dark side.
The contours of this side began to emerge, like so many other consumer problems, in the caseloads of legal aid lawyers serving the working poor. In the late 1980s and early 1990s, legal aid lawyers began seeing growth in the volume of families and senior citizens losing their homes to loan terms and marketing practices removed in degree from theft only ever so slightly by the black magic of boilerplate. Horror stories of breathtaking creditor avarice became common features in newspapers around the country: a seventy-six year-old Georgia widower with monthly mortgage payment in excess of his social security income; a blind Ohio couple duped with a fraudulent appraisal, forged paperwork, and thousands of dollars in kickbacks to a deceitful broker; and, a New York retiree with two amputated legs, $ 472 in monthly social security income, and a $ 424 mortgage payment. For years these stories were dismissed as either anecdotal or impossible, since, after all, Adam Smith’s great invisible hand must inevitably protect consumers through forcing bad actors from the marketplace with the Darwin-like natural selection born of rational, self-interested, autonomous market behavior. Who are you going to believe, the local legal aid lawyer or Adam Smith?
Since then, facts have forced a consensus that the term predatory lending – which no longer needs to be surrounded by quotation marks – is real, pervasive, and destructive. A host of empirical studies leaves no serious doubt that predatory mortgage lending is a significant problem for American society. More controversial is this: who should bear the liability for predatory lending practices?
Predatory lenders and brokers themselves specialize in maintaining judgment-proof operations. In fact predatory lenders operate on the edge of bankruptcy, quickly folding up and moving on whenever the heat gets close. This is possible because in today’s market, mortgage originators and brokers quickly assign predatory loans through a complex and opaque series of transactions involving nearly a dozen different litigation-savvy companies.
Predatory lending victims (as well as courts) are left mystified when each blames the other and no one takes responsibility for unfair commercial practices. Often victims are left asserting predatory lending claims as defenses against a faceless investment trust when it attempts to foreclose on their family home. Universally, the trust claims ignorance of predatory practices committed by other parties to the transaction.
This scenario, seen again and again by consumer attorneys all around the country, has forced policy makers to ask whether investors in subprime mortgages have the opportunity and ability to screen their portfolios for predatory practices, and in effect police the behavior of originators, brokers, and servicers. Indeed, this question – should investors be required to monitor lenders for predatory practices – has become the most controversial and important question in the debate over substantive mortgage lending regulatory reform. First, I wiould argues that the concept of predatory lending has been cast too narrowly. I suggest that some of the institutions that sponsor and administer mortgage securitization are complicit in predatory lending. By encouraging, facilitating, and profiting from predatory loans, these financiers have themselves slipped into predation. The notion of “predatory structured finance” is a necessary addendum to the lexicon of predatory lending.
A historical argument that structured finance has rendered much of the existing fabric of consumer credit protection law obsolete. Most consumer protection statutes were adopted before Wall Street learned to securitize home mortgages. As a result, the terminology of those statutes frequently leaves predatory home mortgage loans beyond their scope. Developing within these conceptual cracks in the nation’s consumer protection edifice, securitization has allowed much of the subprime mortgage market to evolve unconfined by many of the substantive standards in consumer protection law.
A closer look at the history of structured finance reveals that organizational technology has outpaced our consumer protection law, in effect deregulating much of the consumer mortgage market.
I would argue that the reform strategy favored by many legislators and a growing number of scholars – assignee liability law – is only a partial solution. Assignee liability rules render the holder of an assigned mortgage loan liable for legal violations made in the origination of the loan. I argue that this strategy, while a necessary component of the law, is by itself inadequate because it excuses many of the most culpable parties from accountability. In addition to limited assignee liability, I would advocates further maturation of an emerging common law trend of using imputed liability theories to hold structured financiers liable for their own predatory behavior.
Today mortgage loans, particularly more expensive loans marketed to those with poor credit histories, are likely to be purchased by investment trusts, bundled into large geographically diverse pools with many other loans, and sold as securities to investors. … Assignee liability rules render the holder of an assigned mortgage loan liable for legal violations made in the origination of the loan. … If a mortgage loan is covered by the relatively narrow scope of HOEPA, then the lender must deliver a special advance warning at least three days prior to consummation. … HOEPA goes further than any other federal statute in creating assignee liability for predatory mortgage lending. … Similarly, it may not be clear how state predatory lending statute assignee liability provisions should be interpreted if the underlying mortgage includes a waiver of defense clause, and the state has not banned those clauses in consumer contracts. … the primary mechanism for distributing liability to a secondary wrongdoer for predatory origination is by assignee liability rules, including the common law of assignment, section 141 of the TILA, the HOEPA’s due diligence standard, and various state predatory lending provisions. … The FTC’s holder-notice rule steers a responsible middle road on this question by capping investor liability at the amount paid by a consumer under the loan in question. …
Law Offices of
TIMOTHY McCandless
15647 Village Dr
Victorville, Ca 92392
TEL (760) 733-8885; FAX (909)494-4214
Most all foreclosures in California can be set aside. The power of sale by non judicial means is contained in the civil code 2932. In order to be valid the assignment must be recorded California civil code 2932.5. Most all notices of default recorded by the “Sub-Prime” lenders have not recorded an assignment till just before or just after the Trustee’s sale. They rely on the MERS agency agreement to protect them but under California law they are wrong.
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