CA Court Site Info on Foreclosure

Sunday, April 12, 2015

Asserted Lack of Standing by Banks--Will It Work??

The case below is not on appeal, but several appellate cases are--and Yvanova v New Century has now been depublished in California, pending CA Supreme Ct. review.  We do not think whether a case is pre foreclosure or post foreclosure is the huge issue, because standing as an issue is not usually related to time. Yvanova's opening brief is  very very clear, simply laid out, but hard hitting-- because it indicates some law that has been glossed over and not brought up in the past. And since this is the California Supreme Court we are talking about, we liked the way attorney Antonini brought it around, and then tied it up in a nice bow, by focusing on HBOR, theory, and past law plus contract law. These things won't be found in every case, but many different circumstances come up in foreclosures these days.

An example of how an unusual case might be just what the Courts are concerned with (a case still IN state court, and not at appeal) -- involves whether several banks actually have standing to engage in an equitable lien/mortgage (in lieu of non judicial foreclosure--since banks can't do the non judicial foreclosure for several reasons--one being they have no title, but only an appearance of title...)

AT ISSUE at this time, is whether the JURISDICTION is proper, pro se asserting banks do not have standing, have unclean hands, and a host of other problems..including an empty shell trust judging from the pleadings, and researched from SEC filing.  This is in State Court, in a case that has going for, the borrower is challenging the banks' standing, (B of A and WF)  based upon the record  of perhaps 14 volumes of assignments and conduct by parties (banks) -- which are seemingly not good at all.

All conduct that took place after a date in 2011, the pro se was in bankrupcty and the bk court has stated, after state court decision on land owned by first pro se/and 2nd pro se (Allen) who holds title to improvements, the bk court is willing to look at the state court's outcome to see if it affects the bk's rights to his owned land [which was owed free and clear, and owner was not a 3rd party in privity with banks.]  Due to Rooker Feldman, the bk court will not interfere with the state court judgment, unless there are grounds see link for some illustration:

For CA analysis by Miller Starr Regalia..  Here, it is noted that since standing is jurisdictional--- the cases down below which are to be decided in CA Supreme Court, will touch on that issue......

............."Given this discrepancy between two courts of appeal, we postulated that, “Keshtgar’s disagreement with the Glaski holding arguably creates a conflict between the districts that California Supreme Court may elect to address.”

"Interestingly, the lead Yvanova decision involves a post-foreclosure claim of wrongful foreclosure and quiet title based upon an allegedly improper assignment of the deed of trust, whereas the Keshtgar decision involves a claim of pre-foreclosure injunctive relief.  Implicit in its grant of review of Keshtgar, the California Supreme Court may be signaling that a borrower’s claim of lack of standing, whether that claim is asserted pre-foreclosure or post-foreclosure, requires the same legal analysis."

"It’s difficult to predict how the California Supreme Court will rule on the issue before it.  On one hand, the holdings in Keshtgar and Gomes are technically correct – i.e., California’s non-judicial foreclosure statutes set forth in Civil Code 2924 through 2924k did not provide for any pre-foreclosure determination of the standing of the foreclosing lender.
“Nothing in the statutory provisions establishing 
the non-judicial foreclosure process suggest 
that such a judicial proceeding is permitted or contemplated.

"On the other hand, standing is a jurisdictional issue that goes to the core of a civil dispute between two parties.  Hypothetically, what would happen if a “lender” foreclosed on real property (which was then sold to a bona fide purchaser) and later the true lender sought to enforce either its deed of trust against the property or its promissory note against the borrower?
 While such situations are rare, they raise interesting hypothetical
 scenarios if, in fact, the foreclosing lender truly lacks standing 
due to a failed or improper assignment of the deed of trust."

As to the Pro Se Case:
Well, we can say one thing... even if it doesn't work completely, it surely is a pretty damn good document to establish the RECORD.  We already know that the banks had pretty much told one story after another, and we already know that even though the Appeals Court refused to overtun the Glaski case, the Feds tend to say Glaski is not the majority view by a long shot.

 Even so, with all of the OTHER evidence that occurred after this so-called "equitable lien and mortgage" transpired, much of the worst things happened in the case after the so-called receiver was errantly appointed and controlled by bank attorney for most part. For example, illegal seizure of animals, illegal contempt hearing, illegal ouster without eviction, illegal receiver, and there's plenty more.

BUT--because we know that most pro se litigants are not familiar with nor should they be expected to be familiar with, mortgage law litigation, we just want to tell others, that when banks push people too far, and have done wrong actions, someone has to stand their ground.  and if there is anyone in the world who we believe would stand his ground, the guy that owns the land and used to own the horses is the guy.
  Further, the banks complicated the situation perhaps, by paying the former part owner of the land, $200,000 to give her share up to the banks?? We presume that would also take out any claims she had against the banks. Both banks had claimed they held non monetary interest then later changed their status again, and again, and again. Incredulous at best, and really, really dicey in our opinion.
(this link used because it's too much work to set up a PDF file on this blogger platform; this goes directly to a legal blog re animal law issues, and it is a safe link; site has been online since 2008...and since banks tried to claim that there was an animal seizure done legally, which there absolutely was not,[creating due process issue] .. many equine owners know this had 39 pages of Google search news....and the main person accusing the animal owner has admitted she was wrong, but 4 years too late..further, the bank attorney was reported to State Bar...)

The following cases are being reviewed

 in the CA Supreme Court:

Keshtgar v. U.S. Bank  

(B246193) — Whether a defaulting borrower has standing to challenge an assignment of a note and trust deed when filing for injunctive relief against foreclosure on the defaulting borrower’s property. [Precedent for the same issue will be set by Yvanova v. New Century Mortgage Corp also pending before the California Supreme Court]

Mendoza v. JPMorgan Chase Bank

(S220675) — Whether a defaulting borrower has standing to challenge an assignment of a note and trust deed after the successor lender foreclosures on the defaulting borrower’s property. [Precedent for the same issue will be set by Yvanova v. New Century Mortgage Corp also pending before the California Supreme Court]
Here, borrowers alleged that two assignments of their loan were robo-signed by employees who either did not work for the entity listed in the assignment, or who held different titles than those listed in the assignment. The Court of Appeal agreed with the lower court and the many federal courts that have found robo-signing claims unavailing. 
                           First, borrowers did not allege that the employees actually lacked authorization to sign the assignments. Second, borrowers made no allegations that the financial institutions in question did not eventually ratify their employee’s (or their non-employee’s) signatures. 
                           Most critically, as non-parties to the assignments, borrowers lack standing to challenge the propriety of those assignments. Finally, borrowers have not alleged how any robo-signing, even if true, affected their ability to pay their mortgage. The robo-signing did not harm them in any way. The Court of Appeal granted servicer’s demurrer on borrowers’ robo-signing claim; this constitutes the first published Court of Appeal opinion on this issue.

Yvanova v. New Century Mortgage Corp.

(S218973) — Whether a defaulting borrower has standing to challenge an assignment of a note and trust deed after the successor lender foreclosures on the defaulting borrower’s property. [For RCD of (uncitable) lower court opinion click here.]

Yvanova v. New Century Mortg., 226 Cal. App. 4th 495 (2014), depublished and review granted, __ P.3d __, 2014 WL 4233383 (Cal. Aug. 27, 2014) (No. S218973). 

                          In general, California borrowers do not have standing to allege violations of pooling and servicing agreements (PSAs), contracts between their lender and a third party trust. Here, borrower cited Glaski v. Bank of Am., N.A., 218 Cal. App. 4th 1079 (2013), a California Court of Appeal case that did grant borrower standing to challenge a foreclosure based on PSA violations and New York trust law. Borrower alleged that the assignment to the trust and the substitution of trustee were both backdated, in violation of trust rules, and therefore void. 

The Court of Appeal affirmed the trial court’s grant of defendants’ demurrer, explicitly rejecting Glaski

Without really analyzing Glaski, the court chose to follow Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal. App. 4th 497 (2013), a pre-Glaski case that denied borrower standing to challenge the PSA. 

Following Jenkins, the Court of Appeal reasoned that botched assignments or substitutions are not the borrower’s problem: they do not affect the borrower’s obligation to pay their mortgage. 
                     If any entity is harmed and deserves a chance to challenge a PSA, it would be the “true” owner of the loan, who should have had the right to foreclose, but was deprived of it by the improper assignment. 

The Court of Appeal opinion was published, but the California Supreme Court recently granted borrower’s petition for review, asking:

                   “In an action for wrongful foreclosure on a deed of trust securing a home loan, does the borrower have standing to challenge an assignment of the note and deed of trust on the basis of defects allegedly rendering the assignment void?The grant of review supersedes the Court of Appeal opinion, which is no longer published or citable.

See  for analysis by Miller Starr Regalia  and also below, by one attorney from same...............Basil “Bill” Shiber is a shareholder in the Walnut Creek, CA office of Miller Starr Regalia. 

 Keshtgar v. U.S. Bank/Yvanova v. New Century Mortgage: To what extent can a borrower challenge a trustee’s sale?  

//Note by blogger: the article does not mention that Yvanova has been depublished........

Efforts by borrowers to enjoin non-judicial foreclosure sales on the basis that lenders do not hold the original note, are not properly authorized to conduct the foreclosure, or are otherwise disabled from authorizing or conducting a sale have been largely unsuccessful in California.

Typically, the claims have been asserted by borrowers who are admittedly in default under their loans, and the subtext to the decisions has been that borrowers should not be permitted to delay the inevitable. Moreover, courts are mindful of the “quid pro quo” associated with the non-judicial foreclosure process: a trustee’s sale occurs more quickly and more cheaply than a judicial foreclosure, and in return for this speed and efficiency, the lender gives up its right to seek a deficiency judgment against the borrower—i.e., the lender must be content with extracting whatever value it can from the property. 
The courts have viewed efforts by borrowers to enjoin non-judicial foreclosure sales as injecting the courts into this expressly non-judicial process, thus undermining the very benefits intended by the legislative scheme.

The first major case addressing these issues was Gomes v. Countrywide Home Loans, Inc., 192 Cal.App.4th 1149 (2011), which rejected a borrower’s challenge to the right of Mortgage Electronic Registration Systems, Inc. (“MERS”), a lender owned mortgage registration system, to conduct non-judicial foreclosures based on its status as nominee of the beneficiary (lender) under the deed of trust.

In the more recent case of Keshtgar v. U.S. Bank, N.A., 226 Cal.App.4th 1201 (2014) (rev. granted October 1, 2014, Cal. S. Ct. Case No. S220012), the Court held that under California’s non-judicial foreclosure statutes, a defaulting borrower cannot enjoin the lender’s initiation of the trustee’s sale process by asserting that the lender lacks standing to foreclose because of an ineffective assignment. 

In effect, a defaulting borrower 
could not preemptively enjoin 
a trustee’s sale
even if the wrong entity was 
foreclosing on the property.

The California Supreme Court has granted review of the Keshtgar decision and deferred briefing until resolution of another case under review, Yvanova v. New Century Mortgage Corp., 226 Cal.App.4th 495 (2014) (review granted on specified issues, Cal. S. Ct. Case No. S219873), which involved a post-trustee’s sale claim by a borrower for wrongful foreclosure and quiet title. Yvanova was Depublished.

One of the distinctions which has emerged in the cases is between pre-foreclosure efforts to enjoin a sale, and post-foreclosure claims for damages. The latter have generally failed, while in some cases the former have been permitted to proceed. (See, e.g., Glasky v. Bank of America, 218 Cal.App.4th 1079 (2013).) 
Whether this distinction will be significant to the California Supreme Court’s ultimate analysis remains to be seen, but in any event, the California Supreme Court will provide more guidance in this area soon, and the decision will be important to those representing borrowers or lenders in the residential context.

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