Hwang Bankruptcy Motion to Lift Automatic Bankruptcy Stay case..and California Commercial Code Section 3202

The following code is to be used for an article we are publishing on the Hwang Bankruptcy Case 

from California.

3202.  (a) Negotiation is effective even if obtained (1) from an
infant, a corporation exceeding its powers, or a person without
capacity, (2) by fraud, duress, or mistake, or (3) in breach of duty
or as part of an illegal transaction.
   (b) To the extent permitted by other law, negotiation may be
rescinded or may be subject to other remedies, but those remedies may
not be asserted against a subsequent holder in due course or a
person paying the instrument in good faith and without knowledge of
facts that are a basis for rescission or other remedy.

Hwang Case – California Commercial Code Section 3201

The following code is to be used for an article we are publishing on the Hwang Bankruptcy Case from California.

California Commercial Code Section 3201.  

(a) "Negotiation" means a transfer of possession, whether
voluntary or involuntary, of an instrument by a person other than the
issuer to a person who thereby becomes its holder.
(b) Except for negotiation by a remitter, if an instrument is
payable to an identified person, negotiation requires transfer of
possession of the instrument and its indorsement by the holder.

If an instrument is payable to bearer, it may be negotiated by transfer of
possession alone.

HEY MERS CAN DO IT ALL! PURSUE FORECLOSURES…..LIFT STAYS IN BANKRUPTCY COURTS AND EVEN SIGNOFF ON LOAN MODIFICATIONS! ONE AMAZING SOFTWARE COMPANY!

Here is another example of MERS playing big shot in the loan modification setting.  Click on the link below to view the document.  The “lender” of the loan is stated to by Indymac Mortgage Services.  Meanwhile the top of the loan mod agreement states “Investor Loan #” (does this mean there is both a lender and a investor of the loan)?  Who knows.  The document is signed by MERS (the software company) for some reason.  I suppose Indymac was not able to sign it for some reason and had to have MERS sign their loan modification agreement on their behalf for the investor?  Confusing, I know.

MERS Active in the Loan Mod Business

FORECLOSURE STORIES – ONCE UPON A TIME IN A LAND FAR, FAR AWAY, THERE WAS A SOFTWARE COMPANY NAMED MERS THAT LIKED TO PRETEND IT WAS YOUR MORTGAGE LENDER…..

IN THIS DAY AND AGE OF “MERS LOANS” (WHERE THE MORTGAGE ELECTRONIC REGISTRATION SYSTEMS – A MERE SOFTWARE COMPANY – POSES AS A BENEFICIARY OF A LOAN), CAN WE TRULY ACKNOWLEDGE ANY ALLEGED BENEFICIARY OF A LOAN AS BEING A “CREDITOR” IN A BANKRUPTCY SETTING?

Attorney Steve Vondran can be reached at steve@vondranlaw.com or (877) 276-5084.  Mr. Vondran is licensed to practice law in California and Arizona and is currently assisting homeowners in foreclosure defense, predatory lending, bankruptcy, and loan modification (Arizona only).  The following is general legal information only, and not legal advice.

MY NAME IS MERS AND I AM THE BENEFICIARY OF YOUR LOAN, NO I MEAN THE NOMINEE OF YOUR LENDER AND ITS SUCCESSORS AND ASSIGNS, I CAN LIFT THE AUTOMATIC STAY IN BANKRUPTCY – DO NOT CHALLENGE ME! RESPECT MY AUTHORITY.

Yes, to a certain degree we have been calling this “produce the note” bankruptcy style (or to be more accurate, “prove you are a creditor”).  Here is a general overview of what we are talking about here.  If you have a MERS loan (check your deed of trust see if it lists MERS as the nominee of the lender and its successor and assigns and the beneficiary of the loan), and you are thinking of filing Bankruptcy Chapter 7, give this article a close review.

We are a debt relief agency and we help people file for Bankruptcy Protection under the Bankruptcy Code.  The following article is general legal information only and may not be current, up-to-date or accurate as law can be subject to interpretation and is constantly evolving.  In addition, this article is not legal advice and not to be construed as a substitution for legal advice.  If you have specific legal questions, please contact a bankruptcy lawyer or real estate lawyer or foreclosure lawyer as your case may require.

MERS IN BANKRUPTCY – RIP OPEN THE CURTAIN AND LETS SEE THE “WIZARD OF OZ” STANDING THERE WITH NOTHING BUT SMOKE AND MIRRORS.

WHAT IS MERS?

MERS stands for the Mortgage Electronic Registration System.  They are essentially a software company that was set up to track the transfer (sale) of loan ownership rights, and loan servicing rights where loans are originated and transferred (sold) on the secondary market.

Where you see MERS pop up in the loan context is look on your deed of trust, if you see it say something similar to the following you have a MERS loan:

“MERS is the nominee of the lender, its successors and assign.  MERS is the beneficiary.”

That is typically what you will see.  Yes, you may be scratching your head like we do in our foreclosure defense work and asking yourself the following question, HOW IS IT THAT MERS IS BOTH A NOMINEE OF THE LENDER AND THE BENEFICIARY?  It is a bit strange, but basically MERS is trying to hedge its bets.  Where it needs to be an agent (nominee) it will act as an agent.  Where they want to pretend to be the beneficiary, it will put the beneficiary hat on.  Yes, MERS gets to be whoever it wants to be, or at least we should say that MERS can pretend to be whoever it wants to be in regard to loan foreclosure, trying to life a stay in bankruptcy etc.

Yes, MERS is assuming you will not challenge them, or that you do not have the money to challenge them, and/or that the judge will go right along with them in a civil lawsuit or allow them to lift the automatic stay in a bankruptcy setting.

Alas, there is the rub, people are starting to learn about MERS, and trying to find ways to challenge them.  Our firm is also putting forth some new strategies to take on MERS, and MERS-related loans.

The analogy for MERS (pretender lenders) can also be extended to Trustees of Securitized trusts (as pointed out in California State bar MCLE units taught by Neil Garfield, a lawyer who can probably be called the “father of produce the note theory”).  The point being that a trustee of a securitized trust who does not have the original promissory note, transferred and endorsed, along with an assignment of the note and deed of trust (the note and deed of trust are supposed to be assigned together for “the note without the deed of trust is a legal nullity” according to some legal cases.  For example, where a trustee of a securitized trust cannot show proper transfer of the note and deed of trust, no one in their right mind should just assume that because the Trust claims to hold the loan, that they should be treated as a legitimate “creditor” in a bankruptcy case.

The point becomes, in this day and age, we are finding it increasingly difficult to find out WHO THE HOLDER OR OWNER OF YOUR LOAN IS.  WHO IS ENTITLED TO PAYMENTS?  WHO IS ENTITLED TO FORECLOSE ON YOU?  WHO IS REQUIRED TO CONTACT YOU PURSUANT TO CALIFORNIA CIVIL CODE SECTION 2923.5 TO TRY TO WORK OUT LOAN MODIFICATIONS WITH YOU BEFORE THEY FORECLOSE?  WHO DO YOU SUE WHEN YOU ARE FILING A TRUTH IN LENDING RESCISSION CASE TO FORCE THEM TO GIVE BACK THE MONEY THEY MADE AS PART OF THEIR TENDER OBLIGATION.

What we have found to be absolutely amazing in our work as a foreclosure defense and loss mitigation law firm is that when you contact your lender as ask them what should be a relatively simple and straight-forward question such as “WHO IS THE OWNER OF MY LOAN I WANT TO TALK TO THEM ABOUT A LOAN MODIFICATION” many California and Arizona homeowners will typically get the same answer:  NONE OF YOUR BUSINESS……OR SORRY, WE CANNOT TELL YOU…….OR SORRY, WE DO NOT KNOW……OR, YES WE OWN IT, WHEN IN FACT THEY DONT.

If you think I am kidding, call your lender or more likely, your loan servicer and ask them who owns your loan.  They may insist that Fannie Mae or Freddie Mac owns your loan.  Both fannie and freddie have a loan lookup tool and you can google this to see of they “own your loan.”  Of course, the result you will get you will have to take on faith, because you will not be able to download a copy of your note assigned to them, or a copy of your deed of trust assigned to them.  Instead, Fannie Mae and Freddie Mac will be asking you to take it for granted that when they tell you they are the owner of your loan, that that is true and indisputable.  If you ask for proof however, they will likely tell you to “pound sand.”

The rationale of many lenders seems to be this: “you took out a loan……you know you owe somebody……..that somebody might as well be us…….and there is no obligation for us to “show the note” in order to conduct a private trustee sale in California and Arizona (unfortunately the case law backs them up on this wild assertion) and if you try to file for an injunction to stop the foreclosure sale, we will point out the case law that says an original copy of the promissory note is not required in seeking to foreclosure in a non-judicial foreclosure sale.  THAT MY FRIENDS IS BASICALLY WHAT YOU ARE UP AGAINST.

Meanwhile, Attorneys like me would like you to know that things are not always as they seem to be.  Remember the Wizard of OZ?  The guy behind the curtain that wanted you to believe he was the ultimate authority and not subject to challenge?  Well, the lenders, loan servicers and MERS like to do the same thing when in comes to acting like they have all the credentials to prove their right to ACT IN RESPONSE TO REQUESTS FOR LOAN MODIFICATIONS, SHORT SALES, DEED-IN-LIEU OR FORECLOSURE, IN PRIVATE NON-JUDICIAL FORECLOSE SALES, TRYING TO LIFT AUTOMATIC STAYS IN BANKRUPTCY COURTS, AND EVEN EVICT PEOPLE FOLLOWING AN UNLAWFUL SALE BY A PRETENDER LENDER AS NEIL GARFIELD CALLS THEM.

In short, it is time to start asking the tough questions, and making these guys answer them with honesty, and in accordance with commercial law and other legal standards and making them PROVE they are the true creditor, or an agent of the true creditor when them come pushing people around in loss mitigation settings (even after they got their real nice bailout that saved their asses from bankruptcy and embarrassment).

IS MERS THE BENEFICIARY OF A LOAN?

As mentioned above, MERS is NOT A LENDER…….NOT A BENEFICIARY OF ANY LOAN.  They did not lend you any money; they do not accept your loan payments, they do not discuss loan modifications or short-sales with you.  Again, MERS is nothing more than a software company that is essentially made up of its member banks who like to hide behind the “MERS Curtain.”  The use of MERS allows the TRUE OWNER of the loan to remain anonymous.  That way, nobody knows who to go sue, unless and until a borrower goes into a default in which case MERS will ask one of its members to step forward and act as the creditor of the loan and move to foreclose.  Until that day, you will never likely learn who “holds your loan or who “holds your loan” or who “the creditor or beneficiary of your loan is.”  Again, the big banks, lenders, and wall street investors (who typically are the loan beneficiary as they are the ones seeking your loan payments after the servicer takes its cut) do not want you to know about them, because they do not want to answer for any predatory lending claims you may have.  They would rather hide in the shadows for 4 or 5 years until statutes of limitations run, collecting your loan payments, trading your loan as many times as possible, and basically just living covertly off your interest payments.
Court cases have come down that have basically stated that MERS is NOT A BENEFICIARY OF A LOAN JUST BECAUSE IT CALLS ITSELF A BENEFICIARY UNDER YOUR DEED OF TRUST (CALLING A PIG A HORSE DOES NOT MAKE IT SO).  AT BEST, COURTS WHO HAVE HEARD “MERS CASES” HAVE NORMALLY HELD THAT MERS MAY BE AN AGENT (NOMINEE) BUT THEIR CLAIM TO CREDITOR OR BENEFICIARY STATUS IS NOT MUCH MORE THAN SMOKE AND MIRRORS.  We have discussed the Arkansas MERS case and Kansas Supreme Court Case on other blogs.  We have also addressed “MERS BANKRUPTCY CASES”  which have held that MERS does not have “standing” to lift an automatic stay in a bankruptcy court and that MERS is not a “real party in interest” in a BK case.

MERS hates these cases, even though it touts some of their alleged “successes” and the MERS TRIAL STRATEGY AND MERS LEGAL PRIMER on their website (assuming the article is still up there).

At any rate, do not expect MERS to stop, and as we discussed above, TRUSTEES OF A SECURITIZED LOAN TRUST (who like MERS cannot produce the note and assignment of deed of trust properly endorsed and transferred) should also not be acknowledged as TRUE CREDITORS who can do whatever the heck they want in private foreclosure sale settings, short sales, loan modifications, deed-in-lieu-of-foreclosure and in bankruptcy courts in California and Arizona where we are licensed to practice law.  Note, we only serve loan modification clients in Arizona since California passed SB94 which essentially was the lenders way of putting loss mitigation representative out of business.  That being said, we still file lawsuits seeking money damages, injunctions, TILA rescission, elder abuse cases, file lis pendens, file trial plan breach of contract cases seeking specific performance of the trial plan agreement, and force them to prove their creditor status (standing and real party in interest) in a BK Chapter 7 case where a debtor has legitimate debts (including deficiency judgment liability) that they seek to wipe out.

IF MERS IS NOT THE BENEFICIARY OF THE LOAN, THEN WHO IS?

This is the million dollar question.  The Beneficiary is normally the party entitled to payment on your loan.  Recall in the normal loan situation you have the Trustor (who is the borrower) and the Trustee (who has the power of sale given to them by the borrower) and the Trustee (who is the beneficiary of the loan, and the one who loaned the money).

This is the typical arrangement in a deed-of-trust setting.  Mortgages are different and have only a mortgagor (the borrower) and the mortgagee (again, the bank that normally lends its own money).

It used to be the case (before securitized loans, and the secondary loan market) that banks would lend their money and then hold the loan, servicing it, and foreclosing on it if need be.  The would, of course, hang on to your promissory note (which is evidence of the debt obligation) and would record the deed of trust in the local County Recorder’s office as evidence of the security interest in the loan.  If you went into default on the loan, the bank would send you a notice of default or a notice of sale, and eventually they would foreclose on you.  You never really had any reason to question who the owner or your loan was, or who your creditor was under this type of arrangement (which is often called “portfolio loans” or “whole loans.”).

Fast forward to the present, where you have loan brokers and “lenders” involved in many transactions, and the “lenders” typically do not loan any of their own money (yes, this sounds strange) but typically they will have entered into an agreement with another company who has agreed to buy, or otherwise fund your loan perhaps through a credit line, or perhaps by another agreement linking to a wall street investor.

WHAT?  Yes, this means when you though your lender was “lending you money” often times there was no money lent by the original “lender” and your loan (at least the note part of it) was assigned or transferred through the secondary loan market where investment banks would carve up your note with other notes (called fractionalized notes) and create investment products for investors on wall streets to invest in (the products can essentially be called “tranches” and your loan, or a fractionalized portion of your loan is in one or more tranches).   The tranches would be rated by Moody’s or Standard and Poor and investors on wall street (such as pension funds, foreign investors, insurance companies, and even investment bankers themselves) would purchase these up, thereby purchasing the right to your payments.

If you are savvy, you may be asking yourself, BUT WHAT ABOUT THE DEED OF TRUST – THE SECURITY FOR THE LOAN, WAS THAT TRANSFERRED TOO?  Recall, we said the note and deed of trust has to be transferred together or it could be construed as a “legal nullity.”  Well, as we discussed above, MERS often records the Deed of Trust and this is never assigned along with the promissory note to the investment trust that now supposedly holds your loan.  So, they were separated.

This is one of the main points of contention, if it is a “legal nullity” to separate the note and deed of trust, doesn’t this mean that they securitized trust, or even the wall street investor who may have purchased an interest in your loan payments, does not have a right to enforce the debt they claim is owed (even though they may use the services of a specialized “loan servicer” who gets paid a percentage of each loan payment to act as if they work as the “agent of the beneficiary?”).  Doesn’t this mean that neither the loan servicer (who has also tried to act as beneficiary on occasions), nor the trustee of the securitized trust, nor the wall street investor, nor MERS is a true “creditor” if they cannot produce both the transferred and endorsed promissory note, and the assigned deed of trust?  Well, that seems to be a fair proposition.

So, if you are filing a bankruptcy petition (again, you must have bona fide good faith debts to discharge) and you are LISTING YOUR CREDITORS ON YOUR BK SCHEDULES(BOTH SECURED AND UNSECURED CREDITORS) WHAT EXACTLY ARE YOU SUPPOSED TO DO?  List these companies and entities as “creditors” or list their alleged debts as “disputed” and list their alleged debts as “unsecured?  Is it malpractice to grant these types of entities “creditor status” merely because they say they are a horse, and act like a horse, and their notice of default says they are a horse and their notice of sale say they are a horse, and their loss mitigation documents and HAMP agreements state they are the horse, when in fact, because they do not have the note properly endorsed and assigned along with the deed of trust they are just a pig?  Should we take everything for granted, and give the Wizard of Oz the status they seek?

This is the question, this is the legal issue.  These guys should be FORCED to prove they are legitimate and valid creditors given what we know of securitized loans.

WHY IS MERS SHIELDING THE IDENTITY OF THE TRUE BENEFICIARY OF THE LOAN?

Again, MERS was setup to assist its member banks to track loan servicing and ownership rights.  They also help hide the identity of the true holder of the loan (the true beneficiary) as these parties only want an interest in your loan payment stream, and certainly do not want to end up a Plaintiff in a Truth in Lending rescission case (where they may actually have to give you your money back).  So MERS helps aid this function, and MERS also allows members to buy, sell, and trade your loan without ever having to RECORD THE TRANSFERS OF THE NOTE AND DEED OF TRUST in the County Recorder.

Yes, this can deprive a County of essential revenues it needs for valuable social services) but it aids the bank in saving money so of course that is of paramount importance, at least to the banks.

MERS does other things as well, like advising its member banks on who to win lawsuits, and join MERS as a party when litigation ensues.  They have it all planned out.  It is only recently when MERS has started losing a few cases that its power, or lack of power, is coming to light, and the curtain is being pulled back.  For now, they still feel they have power over the estimated 60 MILLION MERS LOANS THAT WERE ORIGINATED IN THE PAST DECADE OR SO.

CAN THE TRUSTEE OF A TRUST BE A BENEFICIARY OF A LOAN?

Again, this is a good question, under Commercial law standards, the note and the deed of trust would need to be assigned to the trust and as we know, this rarely appears to happen.   In our foreclosure defense work, we will often hear “the trust owns the loan” or “Duetsche Bank as Trustee of the trust is the owner of the loan.”  Again, they want you to take this on face value, admit you are in default of your loan, and give way to them because they are the entity billowing smoke up into the air, and angling the mirrors to blind your sight.  As we have stated, in the past maybe you would give them credence for this type of ownership assertion.  In this day and age of MERS, securitized loans, mortgage backed securities, CDO’s, etc., you have to ask questions and demand proof before you believe a word you hear.  This is especially true in a BK filing.

There was a good Arizona bankruptcy Case that came down that talked about how a Securitized Trust could own a loan if the note and deed of trust were securitized, and if that occurs, then a loan servicer (GMAC in that case) would be able to claim standing in a Bankruptcy Court, and would be a real party in interest.  We will be posting our brief of the Arizona case shortly.  Google “Vondran Arizona Bankruptcy Lawyer Prove you are a Creditor” that should take you there.  This is a pretty nice case that talks about what is legally required to prove standing in a Bankruptcy Court in a manner that would allow an entity to lift a foreclosure stay in bankruptcy court.  In that case GMAC was basically told to go home as they had no standing in the Bankruptcy Court and was NOT a REAL PARTY IN INTEREST.  So yes, these things CAN be challenged, and SHOULD be challenged in a Bankruptcy Court.  The game playing, although allowed to be perpetrated in a private trustee sale, may have to come to a halt in a federal bankruptcy court, as it should.

ARE THERE ANY WAYS TO DETERMINE WHO THE OWNER OR HOLDER OF MY LOAN IS?

Sure, you can try using some of the ways we do to “ferret out the true holder of the loan….the true creditor…..the true beneficiary.  You have to ask questions, and ASK THE LENDER OR LOAN SERVICERS IN WRITING.  Here are a few of the things we do in our “Creditor Validation” and “Debt Validation” efforts.

Send in a Qualified Written Request under RESPA Section 6 (we have talked about QWR’s in other blog posts) where a bona fide billing or accounting dispute exists.
Send a request to identify the holder of the loan or master loan servicer under 15 U.S.C. 1641(f)
Send a debt validation letter demanding the “lender”  validate their alleged debt, including identifying the holder of the loan, and producing the note and assignment of deed of trust.
Send in beneficiary demand letters.

If these letters go unanswered, or not answered in detail, of course this would raise suspicion, and doubt (again, what do they have to hide except the truth, namely that they are not valid legal creditors, and cannot prove such in some cases).  This would also potentially create legal violations under TILA and RESPA and may turn them into potential defendants in a civil lawsuit if a proper predatory lending, or wrongful foreclosure case is brought.  We call this MAKING THEM DO WORK TO JUSTIFY THEIR EXISTENCE AND JUSTIFY THEIR ASSERTIONS.  Again, if they cannot answer these relatively simple questions and producing the proper documentation of their creditor status, how can we as bankruptcy lawyers treat them as legitimate secured creditors in a bankruptcy setting?

IF WE CANNOT ASCERTAIN THE IDENTITY OF THE TRUE HOLDER OF MY LOAN, AND IF WE ARE FILING CHAPTER 7 BANKRUPTCY SHOULD THE ALLEGED LENDER OR LOAN SERVICER BE TREATED AS A “CREDITOR” (EITHER SECURED ON UNSECURED) ON MY BANKRUPTCY CHAPTER 7 PETITION?

This is what we are saying above.  Where good faith, bona fide legal challenges exist, although you may not be able to raise these in private non-judicial trustee sale settings (i.e. “there is no obligation to produce the note to pursue a private trustee sale”), I have not seen any requirement that says YOU MUST TREAT YOUR LENDER AS A BONA FIDE SECURED CREDITOR ON YOUR BANKRUPTCY APPLICATION FOR YOU KNOW YOU OWE SOMEBODY MONEY AND IT MIGHT AS WELL BE BANK OF AMERICA, OR CHASE, OR WELLS FARGO, ETC.

Consult with your bankruptcy Attorney to ask them how they handle MERS loans.   You can also contact Attorney Steve Vondran’s office (offices in Phoenix, Arizona and Newport Beach, California servicing the Greater Phoenix / Scottsdale area and all areas of California) to discuss your case.

WHAT HAPPENS IF WE LIST THE ALLEGED LOAN CREDITOR / BENEFICIARY AS UNSECURED AND CHALLENGE THE DEBT AS DISPUTED?

This is another important issue, if they are not the true creditors, and their debt is challenged on a bankruptcy petition, then what happens next?  How is this handled in a BK Court?  Contact our office to setup a attorney consultation.  Toll Free (877) 276-5084.

ARE THERE ANY CASES THAT TALK ABOUT MERS LOANS AND PRETENDER LENDERS?

Yes, there are a good number of MERS cases that come out of Bankruptcy Courts.  Our office, and its BK clerk are working to brief these cases and present a discussion on our blogs located at www.LoanModRadio.com, www.AdversaryProceeding.com, www.ForeclosureDefenseResourceCenter.com, and www.BKAttorneys.net.

Please check these sites for more information.  There are also some good cases that have come out of California, Arizona, Kansas, and Arkansas that we will be highlighting on our foreclosure defense blogs.  So stay posted or subscribe to our newsletter at Loan Mod Radio (the foreclosure defense show we used to air on California Angels Radio).

IS IT MALPRACTICE NOT TO CHALLENGE YOUR ALLEGED CREDITOR IN A BK SETTING WHERE THE LOAN AT ISSUE IS A MERS LOAN?

Again, for now this is an open question.  If you are a BK attorney, perhaps you should be challenging MERS loans and demanding true creditors, lenders and beneficiaries prove such before allowing them to lift a stay in bankruptcy Court.  Perhaps you should be charging an extra fee (whether your client can afford it or not – yes there are extra costs above and beyond your normal BK Chapter 7 fee), and perhaps you can use an outside firm like mine to conduct PROOF OF CLAIM CHALLENGES, ENGAGE IN STAY LITIGATION, OR TO FILE ADVERSARY PROCEEDINGS TO CHALLENGE THE EXTENT OR VALIDITY OF A LIEN.  To those BK attorneys in California or Arizona (where we are licensed to practice law) who want to discuss co-counseling MERS cases, we are available for discussion at (877) 276-5084.

CONCLUSION – MERS (AND OTHER “PRETENDER LENDERS” AS NEIL GARFIELD CALLS THEM) IN BANKRUPTCY COURT.

In the world of securitized loans where the note and deed of trust is often separated by the use of MERS (the software company) and where it is often not clear who holds your loan or who your lender might be (this is often kept a big secret), it may be time to consider whether you should challenge these entities claims that they are your true creditor who is owed the money, and who has the right to foreclose on your loan, or lift your automatic stay in a bankruptcy court.  The ramifications of taking such a position may threaten the “Wizard of Oz” hiding behind the loan curtain, but it also may work to your ultimate benefit.  It is not clear who Bankruptcy Judges will treat such claims, but where you have a good faith belief the alleged “creditor” is just trying to pull a fast one because “you owe somebody it just might as well be me” and where you have bona fide debts, including potential deficiency judgment liability you want to discharge, perhaps the Bankruptcy Court may be your “court of last resort” to “make them produce the note.”  These are strategies our firm is willing to investigate, consider, and allege where appropriate.

Also, you may want to bookmark a good reference site for Produce the Note issues – http://www.ProduceTheNoteAttorney.com.

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Keywords:  bankruptcy Chapter 7 / bankruptcy Adversary Proceeding / Bankruptcy Prove they are a Creditor / QWR / Debt Validation Letter / Arizona BK Attorney / Phoenix BK Attorney / Scottsdale bankruptcy / California Bankruptcy Lawyer / Orange County Bankruptcy Lawyer / Securitized Loans / Phoenix Foreclosure Defense Lawyer / Phoenix Foreclosure Defense Attorney / Scottsdale Loan Modification / 949 Foreclosure Defense / 602 Foreclosure Defense Law / 480 Foreclosure Defense Attorney / Filing Chapter 7 / Unsecured Creditors in MERS Loans / MERS loans / Mortgage backed Securities / Trustee of a TRUST and MERS / Produce the Note Attorney / Produce the Note Lawyer

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This is an advertisement and communication pursuant to state bar rules.  No guarantees or representations as to any case outcome are ever given, and no predications made.  Every case, lender, servicer, property, borrower, jury, and legal theory is different.  Please do not email confidential information as there is not guarantee of confidentiality and no attorney-client relationship is formed until and unless a retainer agreement is signed by Client and Attorney .

IF THE LENDERS WILL NOT PRODUCE THE NOTE WILL THEY AT LEAST “PRODUCE THE SHORT SALE?”

We are getting more and more calls from people who have decided to give up on the hopes of principal loan balance reduction (we have always told people principal loan balance reductions are like a bigfoot sighting) and instead seek to short sell their property letting the bank deal with the property, especially where the stubborn bank (that got their bailout) refuses to help the homeowner save their home by providing a reasonable and meaningful loan modification.

Now, in the context of shot sales, there are a few things to consider:

(1)  Will you be liable for a deficiency judgment (meaning if the lender allows you to sell your home for less than its worth, can the lender come back against you for a deficiency judgment?

We have talked about deficiency judgments in Arizona on one of our other websites: Click here for more general legal information: http://www.arizonadeficiencyjudgment.com/

(2)  Are there tax implications involved with the lender forgiving debt owed?

(3)  Are you entitled to $1,500 relocation expenses following a short sale under the HAFA (Short Sales Incentives law)?

(4)  Do you qualify for HAFA?

We outlined the general qualifications for HAFA and some of the general rules on our HAFA short sale blog which can be found here: http://activerain.com/blogsview/1546150/short-sales-overview-before-and-in-anticipation-of-hafa

(5)  Can a forensic loan audit and letter to your lender help assist in them accepting a short sale over forcing you into foreclosure?  Do you have any predatory lending violations that you can leverage?  Is it better to file a lawsuit against your lender?

We have previously outlined some of the things we look for in an Attorney forensic loan audit on this website: http://vondranlegal.com/2009/08/15/what-is-a-forensic-loan-audit/

(6)  What other options might you have if the lender refuses to accept your short sale?  Options such as filing bankruptcy or pursuing a deed-in-lieu of foreclosure?

Our Arizona bankruptcy website can be found at www.ArizonaBankruptcyResourceCenter.com

(7)  If the lender insists on denying your short sale, have they followed the foreclosure process that would permit them to legally foreclose on you?

(8)  Are there outstanding issues that can be solved with a Qualified Written Request under RESPA?

We have discussed in general terms the topic of Qualified Written Request under another blog that can be found here: http://www.foreclosuredefenseresourcecenter.com/forensicloan-loan-audits/qualified-written-request/

(9)  Do you have a right to rescind your loan under Truth in Lending (TILA) extended three-year right to rescind?

We have a website dedicated to truth in lending rescission rights (TILA) which can be found here: http://www.rescindmyloan.net/a-general-overview-of-truth-in-lending-law-and-the-right-to-rescind/

These are some of the loss mitigation and foreclosure defense questions/issues we deal with on a daily basis.  If you are facing any of the above legal issues, you might want to think about retaining a real estate and foreclosure lawyer to protect your interests.  The banks, lenders, and loan servicers have lawyers on their side and they are probably hoping you don’t take this step on your end.  In California, the lenders backed SB94, a law that prevents any lawyer or broker from accepting any advance fees for loan modifications which has literally allowed lenders to force California homeowners to be unrepresented in the loan modification context.  This is the way they wanted it done, and the California legislature went along with it.   In Arizona, you may still hire a lawyer to assist you, at least for the time being.

For  more information about hiring a Phoenix Short Sale Lawyer, please visit our website at www.PhoenixShortSaleLawyer.com

KEYWORDS:  PHOENIX SHORT SALE LAWYER / SCOTTSDALE SHORT SALE LAWYER / ARIZONA SHORT SALE LAWYER / SHORT SALE ATTORNEY / PHOENIX SHORT SALE ATTORNEY / SCOTTSDALE SHORT SALE ATTORNEY / ARIZONA SHORT SALE ATTORNEY / ARIZONA FORECLOSURE LAWYER / PHOENIX REAL ESTATE LAWYER / SCOTTSDALE FORECLOSURE ATTORNEY / PHOENIX BANKRUPTCY LAWYER / PHOENIX BK LAWYER / REAL ESTATE LOSS MITIGATION / DEED-IN-LIEU OF FORECLOSURE / ARIZONA INJUNCTION / FILING LIS PENDENS / PHOENIX LOAN MODIFICATION / SCOTTSDALE LOAN MODIFICATION / ARIZONA LOAN MODIFICATION / TILA RESCISSION / RESPA QUALIFIED WRITTEN REQUEST

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This is an advertisement and communication pursuant to state bar rules.  All websites listed herein are provided as general legal information only.

California Plaintiff goes in pro per and files “Produce the Note” challenge to stop foreclosure…….

Unfortunately, court says “no way” and declares THERE IS NO REQUIREMENT THAT THE ANYONE PRODUCE THE ORIGINAL PROMISSORY NOTE AS A PRE-REQUISITE TO PURSUING A PRIVATE TRUSTEE SALE.  Here are a few snipets from the case:

MY COMMENTS ARE IN BOLD AND MERELY REPRESENT MY OPINION.

Chilton v. Federal Nat. Mortg. Ass’n, Slip Copy, 2009 WL 5197869 (E.D.Cal.)



ORDER RE PROPOSED ORDER TO SHOW CAUSE AND MOTION FOR TEMPORARY RESTRAINING ORDER



Plaintiff filed a complaint on December 16, 2009, alleging that Defendant, Federal National Mortgage Association, violated unspecified provisions of federal law within “Title 15 U.S.C. and/or Title 18 U.S.C.” because Defendant initiated non-judicial foreclosure on her property, located in Clovis, California, without possessing the genuine original note.” She advances no other bases for relief. 

Plaintiff has also filed an “order to show cause and motion for temporary restraining order,” in an attempt to block the foreclosure process.
To obtain temporary or permanent injunctive relief, a plaintiff must demonstrate likelihood of success on the merits.  Here, Plaintiff’s only legal theory has been resoundingly rejected as a basis for relief. It is well-established that non-judicial foreclosures can be commenced without producing the original promissory note.

THAT’S THE PART THAT HURTS. I SUPPOSE ANYONE WHO SHOWS UP ON FORECLOSURE DAY CLAIMING TO BE THE HOLDER OF THE LOAN (WHETHER IT IS MERS PRETENDING TO BE THE BENEFICIARY OR THE NOMINEE OF THE LENDER, THE LOAN SERVICER PRETENDING TO BE THE HOLDER OF THE LOAN OR SOME OTHER THIRD PARTY, LIKE WALLMART FOR EXAMPLE, CLAIMING TO BE THE HOLDER OF THE LOAN) GETS AN UNFETTERED RIGHT TO FORECLOSE, AND A FREE PASS FROM ANY JUDICIAL SCRUTINY WHATSOEVER.

The Court went on to state:

“Non-judicial foreclosure under a deed of trust is governed by California Civil Code Section 2924 which relevant section provides that a “trustee, mortgagee or beneficiary or any of their authorized agents” may conduct the foreclosure process.” California courts have held that the Civil Code provisions “cover every aspect” of the foreclosure process, (case cited), and are “intended to be exhaustive,”(another case cited). There is no requirement that the party initiating foreclosure be in possession of the original note. 

AFTER LEVELING THIS BLOW THE COURT CITED A FEW OTHER CASES THAT RESULTED IN THE SAME OUTCOME FOR PLAINTIFFS ASSERTING THE “PRODUCE THE NOTE” FORECLOSURE DEFENSE STRATEGY (OBVIOUSLY IN AN ATTEMPT TO TELL FUTURE LITIGANTS IN CALIFORNIA “GIVE UP TRYING TO VERIFY ANYONES CREDENTIALS”):

(1) See, e.g., Nool v. HomeQ Servicing, — F.Supp.2d —-, 2009 WL 2905745 (Sep. 4 2009) (”There is no requirement that the party initiating foreclosure be in possession of the original note.”); 

(2) Candelo v. NDEX West, LLC, 2008 WL 5382259, at *4 (E.D.Cal. Dec.23, 2008) (”No requirement exists under statutory framework to produce the original note to initiate non-judicial foreclosure.”);

(3) Putkkuri v. ReconTrust Co., 2009 WL 32567, *2 (S.D.Cal. Jan.5, 2009)  (”Production of the original note is not required to proceed with a non-judicial foreclosure.”); 

(4) Phillips v. MERS Mortgage Electronic Registration Systems, 2009 WL 3233865, 9 (E.D.Cal.2009); Vargas v. Reconstruction Co., 2008 U.S. Dist. LEXIS 100115, at *8-9 (E.D.Cal. Dec. 1, 2008).


WE HAVE PREVIOUSLY DISCUSSED THE KANSAS SUPREME COURT CASE THAT DISCUSSED THE ROLE OF MERS IN WHICH THE COURT SEEMED TO SUGGEST THAT MERS WAS NOT A BENEFICIARY UNDER THE DEED OF TRUST JUST BECAUSE THEY SAY THEY ARE IN THE DOCUMENT. THE COURT ADDRESSED PLAINTIFF’S RELIANCE ON THAT CASE:

“Plaintiff’s reliance on Landmark National Bank v. Kessler, 216 P.3d 158, 2009 Kan. LEXIS 834 (Kan.2009), is misplaced. That case concerned a company, Mortgage Electronic Registration Systems, Inc. (”MERS”), that acted on behalf of a lender to finalize a second mortgage on Kessler’s home. For procedural reasons not relevant to the present case, it became necessary for the Kansas court to determine whether MERS possessed an interest in the second mortgage, eventually concluding that under the specific facts of that case, MERS was more like an agent than a buyer/owner of the note.”

THE COURT CONTINUED:

“In reaching this conclusion, the Landmark court noted: 
Indeed, in the event that a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity, the mortgage may become unenforceable.  “The practical effect of splitting the deed of trust from the promissory note is to make it impossible for the holder of the note to foreclose, unless the holder of the deed of trust is the agent of the holder of the note. [Citation omitted.] Without the agency relationship, the person holding only the note lacks the power to foreclose in the event of default. The person holding only the deed of trust will never experience default because only the holder of the note is entitled to payment of the underlying obligation. [Citation omitted.] The mortgage loan becomes ineffectual when the note holder did not also hold the deed of trust.” Bellistri v. Ocwen Loan Servicing, LLC, 284 S.W.3d 619, 623 (Mo.App.2009).”


THE COURT CHIMED IN ON THIS LEGAL REQUIREMENT:

“This language merely stands for the proposition that one possessing the deed of trust cannot foreclose on a mortgage without (1) also possessing some interest in the promissory note, or (2) obtaining permission to act as agent of the note-holder. This has nothing whatsoever to do with possession of the “original” promissory note document, i.e., the original piece of paper with original signatures, etc., the possession of which is not required to initiate non-judicial foreclosure in California. Because Plaintiff cannot possibly establish any likelihood of success on her current claim for relief, it is not necessary to set her motion for temporary injunctive relief for hearing. Her motion is DENIED. IT IS SO ORDERED.”


There you have it friends, as we have been telling callers to our office seeking foreclosure defense, DO NOT RELY ON “PRODUCE THE NOTE” AS A SILVER BULLET FORECLOSURE DEFENSE THAT IS GOING TO STOP YOUR FORECLOSURE WITH AN INJUNCTION AND GET YOUR HOUSE FOR FREE. IF THERE ARE GLARING IRREGULARITIES, AND OTHER LEGAL GROUNDS TO GET YOU INTO COURT VALIDLY, THEN YOU MAY WANT TO TAG ON THIS CLAIM AND SEE IF YOU CAN GET A DIFFERENT OUTCOME FROM A DIFFERENT JUDGE, BUT SUFFICE IT TO SAY AS A STAND-ALONE LEGAL THEORY, THERE IS SIMPLY NOT MUCH TEETH TO THE THEORY. MOST OF THE CASES WHERE YOU HEAR OF SOME SUCCESS COME FROM FLORIDA AND OHIO AND OTHER “JUDICIAL FORECLOSURE” STATES WHERE THE LENDER IS FORCED TO FILE IN COURT TO START THE FORECLOSURE PROCESS. IN THESE CASES, THE ISSUE BECOMES A QUESTION OF “STANDING” AND “REAL PARTY IN INTEREST.” THERE IS ALSO THE BANKRUPTCY ANGLE THAT WE WILL BE EXPLORING IN GREATER DETAIL IN FUTURE POSTS.

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In a similar case, NEWBECK v. WASHINGTON MUTUAL BANK, Slip Copy, 2010 WL 291821 (N.D.Cal.), the Court essentially held the same way when a Plaintiff tried to argue “produce the original note” as a strategy to set aside a foreclosure sale that had already occurred. In this case the Court first discussed the dreaded issue of challenging a foreclosure sale that had already been finalized, and the Court’s comments shed light on how one-sided the laws are when you dare take on a “lender” in Court

“Plaintiffs ask the Court to set aside Washington Mutual’s foreclosure sale of their property. They assert that Washington Mutual did not have possession of the original mortgage note or the deed of trust under which it was secured and, as a result, it was not entitled to foreclose. A plaintiff seeking to set aside a foreclosure sale must first allege tender of the amount of the secured indebtedness. Abdallah v. United Savings Bank, 43 Cal.App.4th 1101, 1109, 51 Cal.Rptr.2d 286 (1996) (citing FPCI RE-HAB 01 v. E & G Investments, Ltd., 207 Cal.App.3d 1018, 1021-22, 255 Cal.Rptr. 157 (1989)); Smith v. Wachovia, 2009 WL 1948829, at *3 (N.D.Cal.). Without pleading tender or the ability to offer tender, a plaintiff cannot state a cause of action to set aside a foreclosure sale. Karlsen v. Am. Savings & Loan Ass’n, 15 Cal.App.3d 112, 117, 92 Cal.Rptr. 851 (1971) (citing Copsey v. Sacramento Bank, 133 Cal. 659, 662 (1901)); Smith, 2009 WL 1948829, at * 3 (citing Karlsen ). Plaintiffs allege neither tender nor their ability to offer tender. Thus, they do not state a claim to set aside the foreclosure sale.

THIS MEANS, IF YOU ARE CHALLENGING A FORECLOSURE SALE AND SEEK TO SET IT ASIDE (ON WHATEVER PROPER GROUNDS YOU MAY HAVE) YOU NEED TO AT LEAST ALLEGE A WILLINGNESS AND ABILITY TO TENDER. IF ALL ELSE FAILS, YOU MAY WANT TO TELL THE JUDGE THAT YOU WILL TENDER THE FULL BALANCE DUE AFTER YOU COLLECT ON YOUR FRAUD JUDGEMENT. SOMETIMES THIS MAY BE ALL YOU HAVE WHEN YOU ARE WAY UPSIDE DOWN ON YOUR PROPERTY.

THE COURT THEN WENT ON TO DISCUSS WHAT MIGHT HAPPEN EVEN IF YOU COULD TENDER:

“Even if they alleged tender, the basis on which they appear to seek relief does not support their claim. In California, there is no requirement that a trustee produce the original promissory note prior to a non-judicial foreclosure sale. See, e.g., Pantoja v. Countrywide Home Loans, Inc., 640 F.Supp.2d 1177, 1186 (N.D.Cal.2009); Smith, 2009 WL 1948829, at *3; Neal v. Juarez,2007 WL 2140640, *8 (S.D.Cal.) (citing R.G. Hamilton Corp. v. Corum, 218 Cal. 92, 94, 97, 21 P.2d 413 (1933); Cal. Trust Co. v. Smead Inv. Co., 6 Cal.App.2d 432, 435, 44 P.2d 624 (1935)).California Civil Code Sections 2924 through 2924k ”provide a comprehensive framework for the regulation of a non-judicial foreclosure sale pursuant to a power of sale contained in a deed of trust.” Knapp v. Doherty, 123 Cal.App.4th 76, 86, 20 Cal.Rptr.3d 1 (2004) (quoting Moeller v. Lien, 25 Cal.App.4th 822, 830, 30 Cal.Rptr.2d 777 (1994)). Knapp explains the non-judicial foreclosure process as follows: Upon default by the trustor [under a deed of trust containing a power of sale], the beneficiary may declare a default and proceed with a nonjudicial foreclosure sale. The foreclosure process is commenced by the recording of a notice of default and election to sell by the trustee. After the notice of default is recorded, the trustee must wait three calendar months before proceeding with the sale. After the 3-month period has elapsed, a notice of sale must be published, posted and mailed 20 days before the sale and recorded 14 days before the sale. Knapp, 123 Cal.App.4th at 86, 20 Cal.Rptr.3d 1 (citation omitted).

I SUPPOSE YOU ARE NEVER ALLOWED TO ASK WHO THE “BENEFICIARY” IS OR MAKE ANYONE PROVE THAT POINT BEFORE THEY TAKE YOUR HOUSE. ARE YOU ALSO ALLOWED TO ASK WHO THE BENEFICIARY IS FOR PURPOSES OF COMPLIANCE WITH CALIFORNIA CIVIL CODE SECTION 2923.5 AND THE DECLARATION THAT IS MADE UNDER THIS SECTION? WE WILL DISCUSS THIS ISSUE IN ANOTHER BLOG POST.

ANYWAY, I DIGRESS, THE COURT CONTINUED:

“A properly conducted nonjudicial foreclosure sale constitutes a final 13 adjudication of the rights of the borrower and lender.” Plaintiffs have not pointed to controlling authority to show that this statutory scheme requires production of the original promissory note or deed of trust. Thus, even if they alleged tender, to the extent that they allege irregularities in the foreclosure sale based on Washington Mutual’s failure to produce the original promissory note or deed of trust, they do not state a claim.

AS DISCUSSED ABOVE, ONLY OUT OF STATE CLAIMS FOR PRODUCE THE NOTE WERE CITED (THESE COME FROM THE JUDICIAL FORECLOSURE STATES).

“Plaintiffs cite various out-of-state cases, which apply non-California law to judicial foreclosure actions. See In re Foreclosure Actions, 2007 WL 4034554 (N.D.Ohio); In re Foreclosure Cases, 2007 WL 3232430 (N.D.Ohio); Landmark Nat’l Bank v. Kessler, 289 Kan. 528, 216 P.3d 158 (2009); U.S. Bank Nat’l Ass’n v. Ibanez, 2009 WL 3297551 (Mass.Land Ct.). Because these cases do not apply California’s non-judicial foreclosure sale statutes, they do not support Plaintiffs’ position.”
SO THERE YOU HAVE IT, MORE PROOF OF THE MOUNTAIN YOU MUST CLIMB TO GET TO THE PROMISED LAND. AS WE TELL OUR CLIENTS, FORECLOSURE DEFENSE IS NOT AN EASY BUSINESS.

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KEYWORDS: CALIFORNIA FORECLOSURE DEFENSE LAWYER / PHOENIX FORECLOSURE DEFENSE LAWYER / ARIZONA LOAN MODIFICATION LAWYER / PRODUCE THE NOTE FORECLOSURE DEFENSE STRATEGY / SCOTTSDALE LOAN MODIFICATION / PHOENIX BANKRUPTCY LAWYER / PHOENIX BK ATTORNEY / NEWPORT BEACH FORECLOSURE LAWYER / INJUNCTION TO STOP FORECLOSURE / TRO / LIS PENDENS / SB1137 / FILE CHAPTER 7 BANKRUPTCY / MERS / SECURITIZED LOANS / QWR.

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AUTHORS NOTE: IF THE CALIFORNIA FORECLOSURE STATUTES GOVERN THE FORECLOSURE SALE PROCESS, AND IF NOTHING ELSE REALLY MATTERS, THEN YOU NEED TO TAKE A CLOSE LOOK AT WHETHER THAT STATUTE IS BEING COMPLIED WITH WHEN LOOKING TO OBTAIN AN INJUNCTION TO HALT FORECLOSURE.

Is Produce the Note foreclosure strategy the same as “Quiet Title”? No – Overview of California Quiet Title Law

QUIET TITLE ACTIONS IN CALIFORNIA – A BASIC OVERVIEW

The following is general legal information and is not to be construed as legal advice or a substitute for legal advice.  The information below many not be complete, accurate, or up-to-date as law can, and does frequently change.  For specific questions about your quiet title case, contact a real estate or foreclosure defense attorney to review the facts of your case.

Steve Vondran, Esq. practices Real Estate, Foreclosure Defense & Bankruptcy Law in Phoenix, Arizona, and California where he is licensed to practice law.  He can be reached atsteve@vondranlaw.com or (877) 276-5084.

CALIFORNIA QUIET TITLE LAW – A GENERAL OVERVIEW

The statutory provisions for Quiet Title in California can be found in the California Code of Civil Procedure Sections 760.10-760.060.  A Quiet Title action is basically a legal action that seeks to “quiet title” to property where adverse claims are made against the property.  For example, where a lender wrongfully forecloses on a property and claims the property as their own, but the homeowner challenges this.

Here is the California Quiet Title Statutory Law (there are also cases interpreting these quiet title provisions).  Bolded and italics material are provided by me:

760.010.  As used in this chapter:

(a) “Claim” includes a legal or equitable right, title, estate, lien, or interest in property or cloud upon title.

(b) “Property” includes real property, and to the extent

applicable, personal property.

760.020.  (a) An action may be brought under this chapter to establish title against adverse claims to real or personal property or any interest therein.

(b) An action may be brought under this chapter by parties to an agreement entered into pursuant to Section 6307 or 6357 of the Public Resources Code to confirm the validity of the agreement.

(c) Nothing in this section shall be construed to limit the right of members of the public to bring or participate in actions challenging the validity of agreements entered into pursuant to Section 6307 or 6357 of the Public Resources Code.

760.030.  (a) The remedy provided in this chapter is cumulative and not exclusive of any other remedy, form or right of action, or proceeding provided by law for establishing or quieting title to property.

(b) In an action or proceeding in which establishing or quieting title to property is in issue the court in its discretion may, upon motion of any party, require that the issue be resolved pursuant to the provisions of this chapter to the extent practicable.

760.040.  (a) The superior court has jurisdiction of actions under this chapter.

(b) The court has complete jurisdiction over the parties to the action and the property described in the complaint and is deemed to have obtained possession and control of the property for the purposes of the action with complete jurisdiction to render the judgment provided for in this chapter.

(c) Nothing in this chapter limits any authority the court may have to grant such equitable relief as may be proper under the circumstances of the case.

760.050.  Subject to the power of the court to transfer actions, the proper county for the trial of an action under this chapter is:

(a) Where the subject of the action is real property or real and personal property, the county in which the real property, or some part thereof, is located.

(b) Where the subject of the action is personal property, the county in which the personal property is principally located at the commencement of the action or in which the defendants, or any of them, reside at the commencement of the action.

760.060.  The statutes and rules governing practice in civil actions generally apply to actions under this chapter except where they are inconsistent with the provisions of this chapter.

CALIFORNIA QUIET TITLE LAW SUMMARY

So, in short, the main purpose of a quiet title action is to establish title against adverse claims to real property or personal property.  As set forth above, the remedy of quiet title can be combined with other causes of action or other remedies. And, in any action or proceeding in which establishing or quieting title to property is in issue, the court may, in its discretion and on the motion of any party, require that the issue be resolved pursuant to the California Code Of Civil Procedure provisions relating to quiet title actions.

In regards to proper jurisdiction for a California quiet title lawsuit, the quiet title lawsuit must be brought in the superior court of the county where the real property is located. Once the Quiet Title Action is before the court, the court has complete power to determine title issues.

NOTE: SECTION 761.020-761.040 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE SETS FORTH SPECIFIC PLEADING REQUIREMENTS AND LIS PENDES RULES WHEN FILING A QUIET TITLE LAWSUIT.  THE RULES CAN BE FOUND HERE:

761.010.  (a) An action under this chapter is commenced by filing a complaint with the court.

(b) Immediately upon commencement of the action, the plaintiff shall file a notice of the pendency (THIS IS THE “LIS PENDENS” WE HAVE TALKED ABOUT THIS IN OTHER BLOG ARTICLES) of the action in the office of the county recorder of each county in which any real property described in the complaint is located.

LIS PENDENS NOTE (NOW CALLED THE NOTICE OF PENDENCY OF ACTION): This lis pendens puts other parties on notice of your claim to real property and usually stops anyone from buying or selling your real property while the lawsuit is pending.  The lis pendens can later be removed, or dissolved by Court order.  Please note, there are very specific requirements for filing a lis pendens that you will need to be familiar with (google “vondran lis pendens” for more information).

761.020.  The complaint shall be verified and shall include all of the following:

(a) A description of the property that is the subject of the action. In the case of tangible personal property, the description shall include its usual location. In the case of real property, the description shall include both its legal description and its street address or common designation, if any.

(b) The title of the plaintiff as to which a determination under this chapter is sought and the basis of the title. If the title is based upon adverse possession, the complaint shall allege the specific facts constituting the adverse possession.

(c) The adverse claims to the title of the plaintiff against which a determination is sought.

(d) The date as of which the determination is sought. If the determination is sought as of a date other than the date the complaint is filed, the complaint shall include a statement of the reasons why a determination as of that date is sought.

(e) A prayer for the determination of the title of the plaintiff against the adverse claims.

REQUIREMENTS OF THE DEFENDANTS ANSWER TO A CALIFORNIA QUIET TITLE LAWSUIT:

761.030.  (a) The answer shall be verified and shall set forth:

(1) Any claim the defendant has.

(2) Any facts tending to controvert such material allegations of the complaint as the defendant does not wish to be taken as true.

(3) A statement of any new matter constituting a defense.

(b) If the defendant disclaims in the answer any claim, or suffers judgment to be taken without answer, the plaintiff shall not recover costs.

761.040.  (a) The defendant may by cross-complaint seek affirmative relief in the action.

(b) If the defendant seeks a determination of title as of a date other than the date specified in the complaint, the cross-complaint shall include the date and a statement of the reasons why a determination as of that date is sought.

PARTIES IN A CALIFORNIA QUIET TITLE ACTION (PARTY ISSUES).

California Code of Civil Procedure Section 762.010-762.090 states that the when filing the Quiet Title Lawsuit, the Plaintiff must name as defendants all persons known or unknown claiming an interest in the property and other rules regarding proper parties in a quiet title action are addressed in these sections.

Here are those Sections:

762.010.  The plaintiff shall name as defendants in the action the persons having adverse claims to the title of the plaintiff against which a determination is sought.

762.020.  (a) If the name of a person required to be named as a defendant is not known to the plaintiff, the plaintiff shall so state in the complaint and shall name as parties all persons unknown in the manner provided in Section 762.060.

(b) If the claim or the share or quantity of the claim of a person required to be named as a defendant is unknown, uncertain, or contingent, the plaintiff shall so state in the complaint. If the lack of knowledge, uncertainty, or contingency is caused by a transfer to an unborn or un-ascertained person or class member, or by a transfer in the form of a contingent remainder, vested remainder subject to defeasance, executory interest, or similar disposition, the plaintiff shall also state in the complaint, so far as is known to the plaintiff, the name, age, and legal disability (if any) of the person in being who would be entitled to the claim had the contingency upon which the claim depends occurred prior to the commencement of the action.

762.030.  (a) If a person required to be named as a defendant is dead and the plaintiff knows of a personal representative, the plaintiff shall join the personal representative as a defendant.

(b) If a person required to be named as a defendant is dead, or is believed by the plaintiff to be dead, and the plaintiff knows of no personal representative:

(1) The plaintiff shall state these facts in an affidavit filed with the complaint.

(2) Where it is stated in the affidavit that such person is dead, the plaintiff may join as defendants “the testate and intestate

successors of ____ (naming the deceased person), deceased, and all persons claiming by, through, or under such decedent,” naming them in that manner.

(3) Where it is stated in the affidavit that such person is believed to be dead, the plaintiff may join the person as a defendant, and may also join “the testate and intestate successors of ____ (naming the person) believed to be deceased, and all persons claiming by, through, or under such person,” naming them in that manner.

762.040.  The court upon its own motion may, and upon motion of any party shall, make such orders as appear appropriate:

(a) For joinder of such additional parties as are necessary or proper.

(b) Requiring the plaintiff to procure a title report and designate a place where it shall be kept for inspection, use, and copying by the parties.

762.050.  Any person who has a claim to the property described in the complaint may appear in the proceeding. Whether or not the person is named as a defendant in the complaint, the person shall appear as a defendant.

762.060.  (a) In addition to the persons required to be named as defendants in the action, the plaintiff may name as defendants “all persons unknown, claiming any legal or equitable right, title, estate, lien, or interest in the property described in the complaint adverse to plaintiff’s title, or any cloud upon plaintiff’s title thereto,” naming them in that manner.

(b) In an action under this section, the plaintiff shall name as defendants the persons having adverse claims that are of record or known to the plaintiff or reasonably apparent from an inspection of the property.

(c) If the plaintiff admits the validity of any adverse claim, the complaint shall so state.

762.070.  A person named and served as an unknown defendant has the same rights as are provided by law in cases of all other defendants named and served, and the action shall proceed against unknown defendants in the same manner as against other defendants named and served, and with the same effect.

762.080.  The court upon its own motion may, and upon motion of any party shall, make such orders for appointment of guardians ad litem as appear necessary to protect the interest of any party.

762.090.  (a) The state may be joined as a party to an action under this chapter.

(b) This section does not constitute a change in, but is

declaratory of, existing law.

WHO BEARS THE BURDEN OF PROOF IN A CALIFORNIA QUIET TITLE ACTION?  THE ANSWER WILL USUALLY DEPEND ON WHETHER DEFENDANT HOLDS LEGAL TITLE OR WHETHER TITLE IS DISPUTED.

In a California Quiet Title lawsuit (WHERE LEGAL TITLE VESTS IN DEFENDANTS), the Plaintiff must bear the burden of proof (this is the case in most civil lawsuits).  The normal burden of proof in a civil lawsuit is “preponderance of the evidence.”  However, in a Quiet Title action, the standard of proof is higher and the Plaintiff must establish its right to title by “CLEAR AND CONVINCING” proof.  See California Evidence Code Section 662 which discusses the burden of proof in a Quiet Title case:

662.  The owner of the legal title to property is presumed to be the owner of the full beneficial title. This presumption may be rebutted only by clear and convincing proof.

IF TITLE TO REAL PROPERTY IS “DISPUTED” (AS OPPOSED TO HAVING LEGAL TITLE HELD BY A DEFENDANT) THEN THE TYPICAL “PREPONDERANCE OF THE EVIDENCE” STANDARD WILL APPLY.

A JUDGEMENT IN A QUIET TITLE ACTION IS NORMALLY CONCLUSIVE ON ALL PARTIES KNOWN OR UNKNOWN WHO WERE PARTIES TO THE ACTION.

California Code of Civil Procedure Section 764.030 States:

764.030.  The judgment in the action is binding and conclusive on all of the following persons, regardless of any legal disability:

(a) All persons known and unknown who were parties to the action and who have any claim to the property, whether present or future, vested or contingent, legal or equitable, several or undivided.
  Except as provided in Section 764.045, all persons who were not parties to the action and who have any claim to the property which was not of record at the time the lis pendens was filed or, if none was filed, at the time the judgment was recorded.

HOWEVER, A QUIET TITLE ACTION WILL NOT NORMALLY AFFECT TITLE TO PARTIES WHO WERE NOT A PARTY TO THE ACTION IF THEIR CLAIM WAS KNOWN, OR REASONABLY SHOULD HAVE BEEN KNOWN.

California Code of Civil Procedure Section 764.045 states:

764.045.  Except to the extent provided in Section 1908, the judgment does not affect a claim in the property or part thereof of any person who was not a party to the action if any of the following conditions is satisfied:

(a) The claim was of record at the time the lis pendens was filed or, if none was filed, at the time the judgment was recorded.
(b) The claim was actually known to the plaintiff or would have been reasonably apparent from an inspection of the property at the time the lis pendens was filed or, if none was filed, at the time the judgment was entered. Nothing in this subdivision shall be construed to impair the rights of a bona fide purchaser or encumbrancer for value dealing with the plaintiff or the plaintiff’s successors in interest.

THERE ARE NO DEFAULT JUDGMENTS – EVIDENCE IS REQUIRED IN A QUIET TITLE LAWSUIT:

California Code of Civil Procedure Section 764.010 States:

764.010.  The court shall examine into and determine the plaintiff’s title against the claims of all the defendants. The court shall not enter judgment by default but shall in all cases require evidence of plaintiff’s title and hear such evidence as may be offered respecting the claims of any of the defendants, other than claims the validity of which is admitted by the plaintiff in the complaint. The court shall render judgment in accordance with the evidence and the law.

Quiet Title Case: Mangindin v. Washington Mutual Bank, 637 F. Supp.2d 700, (N.D. Cal.) 2009.

QUIET TITLE IN THE FORECLOSURE CONTEXT: TENDER ISSUES

Under California law, a plaintiff seeking to quiet title in the face of a foreclosure must allege tender or an offer of tender of the amount borrowed.  See Arnolds Management Corp v. Eischen, 158 Cal.App.3d 575, 578, 205 Cal.Rptr. 15 (1984).  This may make Quiet Title a more difficult proposition in a foreclosure case.

QUICK SUMMARY OF CALIFORNIA QUIET TITLE LAW

(1) THE COMPLAINT AND ANSWER TO A QUIET TITLE ACTION MUST BE VERIFIED (ESSENTIALLY MEANING MADE UNDER OATH) AND NAME ALL KNOWN OR UNKNOWN PARTIES CLAIMING AN INTEREST IN THE PROPERTY.

(2) THE QUIET TITLE COMPLAINT MUST DESCRIBE THE PROPERTY WITH A LEGAL DESCRIPTION AND COMMON ADDRESS DESCRIPTION.

(3) PLAINTIFF IN A CALIFORNIA QUIET TITLE ACTION MUST SET FORTH WHAT THE ADVERSE CLAIMS (SETTING FORTH SPECIFIC FACTS) ARE AND WHAT TYPE OF DETERMINATION IS SOUGHT.

(4) QUIET TITLE ACTION MUST SET FORTH THE DATE THE DETERMINATION IS SOUGHT AND A PRAYER FOR RELIEF TO DETERMINE PLAINTIFF’S TITLE AGAINST THE ADVERSE CLAIMS.

(5) A QUIET TITLE LAWSUIT MUST BE BROUGHT IN THE PROPER COUNTY.

(6) ANY PERSON WHO CLAIMS AN ADVERSE INTEREST IN THE PROPERTY MAY JOIN IN THE LAWSUIT EVEN IF THEY WERE NOT NAMED AS A A DEFENDANT.

(7) A QUIET TITLE LAWSUIT REQUIRES PROPER USE OF THE LIS PENDENS PROCEDURE (NOTICE OF PENDENCY OF ACTION).

(8) IN A QUIET TITLE ACTION, THE OWNER OF LEGAL TITLE (CHECK THE TITLE REPORT) IS PRESUMED TO BE THE OWNER, AND THIS CAN ONLY BE REBUTTED BY A SHOWING OF CLEAR AND CONVINCING EVIDENCE TO THE CONTRARY.

(9) GENERALLY SPEAKING, THERE ARE NO JURY TRIALS IN A QUIET TITLE ACTION AS THESE ACTIONS ARE “EQUITABLE” IN NATURE (NOT SEEKING MONEY DAMAGES) SO THE COURT WILL DECIDE PLAINTIFF’S CLAIM AND EQUITABLE DEFENSES MAY BE ASSERTED BY OPPOSING PARTIES.  THE EXCEPTION WOULD BE IF PLAINTIFF IS OUT OF POSSESSION OF THE PROPERTY AND IS FILING THE QUIET TITLE ACTION TO REGAIN POSSESSION – IN THESE CIRCUMSTANCES THE CLAIM MAY BE DEEMED “LEGAL” IN NATURE AND A JURY TRIAL MAY BE REQUESTED.  SEE MEDEIROS V. MEDEIROS, 177 CAL APP. 2d 69, (1960).  THE PRUDENT PRACTICE IS TO ALWAYS REQUEST A JURY TRIAL WHEN FILING A PLEADING IF THAT IS WHAT YOU WANT.  RAISE IT OR WAIVE IT IS THE GENERAL RULE.

(10) GENERALLY SPEAKING, A JUDGMENT IN A QUIET TITLE LAWSUIT IS CONCLUSIVE AND BINDING ON ALL PARTIES TO THE LITIGATION, BUT MAY NOT BE BINDING ON PARTIES NOT INVOLVED IN THE QUIET TITLE LAWSUIT BUT WHOS CLAIMS WERE KNOWN OR REASONABLY APPARENT.  THERE ARE NO DEFAULT JUDGMENTS – CLEAR EVIDENCE IS REQUIRED.

(11) IN A QUIET TITLE ACTION IN THE FORECLOSURE OF A RESIDENCE, THE COURT MAY REQUIRE THE PLAINTIFF TO “DO EQUITY” OR TENDER AMOUNTS OWED OR IN ARREARS OR PAY THE ENTIRE BALANCE.  A PARTY CANNOT USUALLY “GET EQUITY” IF THEY DON’T “DO EQUITY”.

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Visit our other websites at www.RescindMyLoan.net / www.VondranLegal.com / www.OptionArmLawyer.com / www.BKAttorneyS.net / www.ForeclosureDefenseResourceCenter.com /www.ProduceTheNoteAttorney.com / www.TrialPlanFraud.com / www.LoanModificationRipoff.net / www.LoanModSolutions.net / www.VondranLaw.com / www.LoanModLegal.com (the Southern California Foreclosure Defense Radio Show).

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KEYWORDS: CALIFORNIA LIS PENDENS / PENDENCY OF ACTION / QUIET TITLE ACTION / CALIFORNIA QUIET TITLE LAWSUIT / BURDEN OF PROOF IN QUIET TITLE CASE / QUIET TITLE IN FORECLOSURE CASE / LAWSUIT TO QUIET TITLE / CALIFORNIA FORECLOSURE DEFENSE LAWYER / PHOENIX FORECLOSURE LAWYER.

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ATTORNEY FEES - IN MOST CASES WE CHARGE AN UP-FRONT RETAINER AND HOURY FEE.  IN SOME CASES, HOWEVER, WE MAY BE ABLE TO CHARGE A CONTINGENCY FEE OR FLAT RATE FEE.  FOR MORE INFORMATION ABOUT CONTINGENCY FEES YOU CAN CHECK US OUT AT WWW.CONTINGENCYCASE.COM AN ONLINE DATABASE OF CONTINGENCY LAWYERS WHO MAY AGREE TO TAKE YOUR CASE ON A CONTINGENCY FEE BASIS.

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THIS IS AN ADVERTISEMENT AND COMMUNICATION PURSUANT TO STATE BAR RULES.   COPYRIGHT 2010 ALL RIGHTS RESERVED.  WE ONLY SEEK TO SOLICIT CLIENTS IN ARIZONA AND CALIFORNIA WHERE THE LAW OFFICES OF STEVEN C. VONDRAN IS LICENSED TO PRACTICE LAW.

CONSUMER LOAN MODIFICATION WARNING: JASON ADELMAN LITTLE LEAGUE COACH FROM BAKERSFIELD AND CREATIVE DAY CONCEPTS

It has been a while since we showcased the MOD SCAMMER of the MONTH.  But we have a new one for you.  Mr. Jason Adelman who resides in the State of Nevada and works for a company calledCreative Day Concepts.  Guy coaches a little league team in Nevada area.  We have contacted his little league district to put them on notice of their potential liability in having this low-life handing around.

Jason Adelmann is the CLASSIC LOAN MODIFICATION SCAMMER.  Warning to NEVADA and CALIFORNIA HOMEOWNERS – he wants your money and cares less about compliance with state laws dealing with loan modification.  Jason Adelman, we are hereby calling you out.

Once my office caught up with this loan modification ripoff artsist he came clean and admitted his wrongdoing.  In fact, he stated he had no idea what the California Laws for loan modification are and he was hoping that his attorney “partner” would back him and would have compliance issues dealt with.  One problem, when I asked him who his “attorney-backed” Nevada Attorney was, he went limp and silent.  He was afraid to speak because he knew he got his hand caught in the non-compliance cookie jar.  In fact, it is doubtful he has a lawyer backing him.  Probably part of his loan mod scam.

After a conversation or two he agreed he was in the wrong and promised to correct his errant ways and pay back my California loan modification client.  Here is the loan mod scam agreement he promised to sign.

MUTUAL RELEASE AND SETTLEMENT AGREEMENT

RE:              Mr. XXXXXXXXXX Plaintiff v. Creative Day Concepts, Mr. Jason Adelman (“Settling Defendants”)

WHEREAS, Mr. XXXXXXXXXXXX (hereinafter referred to as “Plaintiff”), have asserted a claim against Creative Day Concepts, Mr. Jason Adelman and any other related entity including his “attorney-backed” partner who shall remain nameless (hereinafter “Settling Defendants”) in regard to loan modification services.  Plaintiff and Settling Defendants Collectively may be referred to as “the Parties.”

WHEREAS, Settling Defendants deny any liability in connection with the alleged claims; and warrant that no legal action is currently pending against the Plaintiff;

WHEREAS, for valuable consideration the Parties to this Agreement wish to reach a full and final settlement of all matters and causes of action arising out of the facts, complaints, and claims between the Parties;

WHEREAS, this Settlement Agreement and Mutual Release shall be deemed confidential pursuant to the California rules of Evidence and shall not be admissible in any Court or other legal proceeding for any purpose whatsoever;

THEREFORE, the parties agree to mutually settle the above action and dispute and the Parties agree to mutually release and forever discharge each-other, including forever discharging all claims against Settling Defendants, including, but not limited to Paul Pope.

TERMS AND CONDITIONS OF MUTUAL RELEASE AND SETTLEMENT:

1.   Payment to Plaintiff:  In consideration for the agreement to dismiss all claims and causes of action relating to this incident, Plaintiff agrees to accept the total sum of $3,200.00 (THREE THOUSAND TWO HUNDRED DOLLARS) WHICH SHALL BE PAID IN FULL AND WHICH SETTLEMENT SHALL BE DEEMED COMPLETE UPON SUCH FUNDS CLEARING ATTORNEYS BANK ACCOUNT.

Such payment  shall be made payable to The Law Offices of Steven C. Vondran, Esq., Client Trust Account and shall be sent to The Law Offices of Steven C. Vondran, 2415 East Camelback Road, Suite 700, Phoenix, AZ 85016. All payments owed under this Agreement shall be addressed and made payable as described in this section.   This offer to settle shall expire November 30, 2009 at 5pm.  Upon receipt and confirmation of funds, Plaintiff agrees to maintain all information in connection with the case and settlement agreement as confidential.

2.  Mutual Release:

(A)  As consideration for this Settlement, the Parties, their agents, spouses, heirs, employees, executors, administrators and assigns do hereby fully release and discharge each other, from and against any and all suits, demands, and/or liabilities of whatever kind or natures, including, but not limited to any liability in any way connected with and/or arising from the events and/or consequences alleged between the Parties and/or described by way of any Complaint and/or answer thereto.

The Parties agree to fully, completely, irrevocably, and mutually release each-other from any and all claims relating to this incident (and further agree to release Plaintiffs attorney from any and all legal action of any kind), except in the event any of the settling defendants (as set forth herein), institutes any type of legal action or preceding against the Plaintiff(s) or Plaintiff’s attorney, which relates to any of the claims or assertions referenced or covered herein, in which case this agreement shall become null and void and Plaintiff may file or re-institute any lawsuit against any or all the parties.

(B)  Civil Code Section 1542 Waiver: In releasing each of the parties hereto as above described, all parties waive all rights described in Civil of the State of California, Section 1542, which reads as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO THE CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN ITS FAVOR AT THE TIME OF EXECUTING THE RELASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR.”

The Parties understand the above-quoted provisions of the California Civil Code Section 1542 and knowingly enter into this waiver because it is their intention in executing this release to discharge each other for all claims for relief, whether known or unknown that may be asserted by each of them.  The Parties acknowledge and agree that this waiver is an essential and material term of this Release and the release provisions contained herein and that without such waiver the settlement described in this release would not have been entered into.

(C)   This release shall not release any party to this Agreement from performance of his obligations under this Settlement Agreement.

3.  No Promise or Inducement:  No promise or inducement has been made other than those specifically set forth in this Settlement Agreement.  This Settlement Agreement is executed by the Parties to this Agreement without reliance on any representations of the Parties or their representatives concerning the nature, extent of damages, or legal liability, and after full review by the legal counsel for each party.

4.  Counterparts:  The parties to this Agreement may execute this Agreement in two or more counterparts, which shall, in aggregate, be signed by all the parties, and each counterpart shall be deemed an original instrument as against any party who signed it.

5 Construction:  This release shall not be construed against the party preparing it, but shall be construed as if all parties jointly prepared this release and any uncertainty and ambiguity shall not be interpreted against any one party.  All words and terms shall be given their ordinary and plain meaning.  Titles or captions contained in this full release are inserted  only as a matter of convenience and fore reference and in no way define, limit, extend, or describe the scope of the release or the intent of any provisions hereof.

(A) California Law Applies: this release is to be performed in California, and be interpreted, enforced and governed by and under the laws of the State of California regardless of any choice of law conflicts.

6.  Modification:   The release shall not be modified by any party by oral representation made before or after the execution of this release.  All modifications must be in writing and signed by parties.

7.  Further Documents: The parties shall execute and deliver all documents and perform all further acts that may be reasonably necessary to effectuate the provisions of this release.

8.  Advise of Counsel: Each party acknowledges that it has been represented by counsel of its own choice (or had the opportunity for such legal review and advice) in the negotiations leading up to the execution of this release and that its representative has read this release and has had it fully explained to him, her or it, by his, her or its, counsel and having no objections hereby freely executes such.

(A) Attorney Fees and Costs: Each party hereto shall bear its own attorney fees and costs arising from the actions of their own counsel in connection with this settlement and mutual release of all claims.

9.  Entire Agreement: This release contains the entire agreement between the signatories hereto.  The terms of this release are contractual and not mere recital.  This release is executed without reliance upon any representation by any person concerning the nature or extent of damages or legal liability therefore, and the undersigned have carefully read and understand the contents of this release and sign the same as their own free act.

(A) Severability: In the event any of the provisions of this release are deemed to be invalid and unenforceable, those provisions shall be severable from the remainder of the release, and shall not cause the invalidity or unenforceability of the balance of this release.

10.  Authority to Settle:  By signing below, Mr. Jason Adelman (on behalf of “Settling Defendants”) represents he has authority to enter into this agreement on behalf of all “Settling Defendants.”

 

 

 

 

 

 

The foregoing hereby read, understood, and agreed by (execution by both parties is required to effectuate settlement under this agreement):

PLAINTIFF:

DATED:  ____________________, 2009                        ____________________________________
Mr. XXXXXXX, Plaintiff

 

SETTLING DEFENDANTS:

DATED:  ____________________, 2009                        ____________________________________
Mr. Jason Adelman, for Defendants

Only one problem, Jason Adelmann is the typical loan mod scammer in that he refuses to follow through with what he says he will do (just like all the loan modification lies he tells).  The wrost part is he likes to coach little leaguers in Nevada and what a shame it is if your Clients are drafted by this loan modification scam artist.

Rest assured, once we find his “attorney-backed” partner we will be calling him out and suing him too.

Suffice it to say for now, this is chapter one.  Jason Adelman of Creative Concepts wants to skate free continuing his career of lies of non-compliance in the State of California.  But we will not stop until justice is served.  People like Jaspn Adelmann of Creative Concepts will be brought to justice and exposed as the lying, cheating, scammer that he is.

This foreclosure crises has brought out the loan modification bozos like Jason Adelmann who have to be stopped before their callous ways injure more homeowners.  Mr. Jason Adelman is not afraid to lie to collect his fee.  California and Arizona homeowners are warned to be on the lookout for Creative Day Concepts and Mr. Jason Adelman who refuses to acknowledge California loan modification laws in his pursuit of profits.

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Jason Adelman Updates

(1) It appears his company is called Creative Day Concepts AKA – No Stress Foreclosure AKA – Department of Foreclosure Prevention AKA – Utah Financial. Ever wonder why a company would have so many names?

(2) The addresses we have been able to obtain for Jason Adelman:

Address – 4900 California Avenue Tower B-210

Bakersfield, CA 93309

 5330 Office Center Court, Suite 59

Bakersfield, CA 93309

 5201 California Avenue, Suite 380

Bakersfield, CA 93309

 

Nevada – Creative Day Concepts

4760 South Pecos Road, Suite 103

Las Vegas, Nevada 89121

 

Home – 15626 Sammie Avenue

Bakersfield, CA 93314

 

1000 Norris Road

Bakersfield, CA 93308
Phone numbers we have been able to obtain via public sources

888-281-1363

661-633-1905

661-377-2937

661-428-0086

661-340-9049

 

1. 3.      It appears Jason Aldeman is also a youth football coach – Golden Empire Youth Football

 Should a guy who promises loan modifications, principal reduction and money-back guarantees (who does not have the properly approved advanced fee agreement, is not a real estate broker, and who on information and belief accepted at least one notice of default case in violation of the California Foreclosure Consultant Act (and who agrees to a settlement and then disappears) be permitted to act as a mentor and coach for youth in the community? If My kids played in the Golden Empire Youth Football league, I would call Ron White (see his number below) and complain that I do not want a guy who blatantly violates the law in the name of profits, and who has obvious issues being truthful and honing up for his wrong-doing coaching my kids in a youth football league. Make your voice be known, help put a loan mod scammer to a halt.

 

5630 District #123

Bakersfield, CA 93313

 

Ron White – Director of Youth Football at Golden Empire Youth Football.

661-837-4393

661-201-1283

(4) It appears Jason Adelman’s wife’s name is Jennifer Lynn Adelman – She is the stated Secretary of Creative Day Concepts, Inc. a Nevada Corporation. It is not clear what role she plays, if any, in aiding, abetting, supporting and encouraging Mr. Jason Aldeman.

(5) Jason Aldeman’s Brother appears to be Mark Adelman – who is the Treasurer of Creative Day Concepts, Inc. – On information and belief he lives in the San Diego area. Again, it is not clear to what degree, if any, Mark Aldeman is involved in aiding, abetting, supporting and encouraging Mr. Jason Aldeman in his foreclosure defense business.

HERE ARE SOME OF THE VIOLATION WE WILL BE ALLEGING AGAINST JASON ADELMAN IN A CIVIL LAWSUIT:

(1) FRAUD AND DECEPTION: Offering 100% money back guarantees with no intent to honor such;

(2) FALSE ADVERTISING / 17200: JASON ALDEMAN Claims he is a “Loan Modification Specialist” (this is on his business card that he uses to illegally generate business in California) and it appears he claims he has been doing this foreclosure work for years.

(3) VIOLATION OF CALIFORNIA FORECLOSURE DEFENSE LAW: On information and belief, Mr. Aldeman has taken clients that have a Notice of Default in the State of California. Not being exempted under the law, he is in violation of the foreclosure defense law which carries stiff penalties which we plan to pursue.

If you have been ripped off or scammed by Mr. Jason Adelman, Creative Day Concepts, No Stress foreclosure or Department of Foreclosure Prevention, please contact our office to discuss a class action lawsuit.

Jason Adelman’s email address is jason@cdayc.com .  If you were scammed by Jason Adelman and Creative Day Concepts, email him and ask him for a copy of your loan modification file so we can review your case.

Oh, and one last development, Jason Aldeman now appears to be running “New Life Investing” in Bakersfield. Don’t ask me how this relates to his expertise in loan modifications – also you might want to check and see if he has the proper licensing and credentials, if one is needed.  His number at New Life Investing is (661) 323-5151.

Produce the Note is one theory, Financial Elder Abuse in California may be another

PREDATORY LENDING MEETS ELDER ABUSE: ARE LENDERS PERMITTED TO FORECLOSE ON PREDATORY OPTION ARM LOANS AND OTHER COMPLICATED FINANCIAL PRODICTS IN THE STATE OF CALIFORNIA?

The following article discusses general legal information on the topic of elder abuse and foreclosure defense. This article contains general legal information and not specific legal advice. In addition, the article, cases, and analysis may not be complete and comprehensive or up-to-date. Steve Vondran, Esq. is licensed to practice law in California and Arizona. He practices law in the area of Real Estate, Bankruptcy, and Foreclosure Defense. He can be reached at steve@vondranlaw.com.

INTRODUCTION TO ELDER ABUSE AND PREDATORY LENDING

The elderly population (over 65 years of age) is one of the fastest growing segments of society. Medical science is helping people live longer, more productive lives. However, it is fairly common knowledge that as each of us grow older, whether we like it or not, we lose some of our mental and physical capacities.

In the context of mortgage loans, it may mean that elderly persons become less able to comprehend sophisticated financial products such as Option Arm Loans (pay options ARM / “pick-a-pay loans) and Reverse Mortgages and other adjustable rate mortgage and interest-only loan products that differ from the traditional 30 year fixed rate mortgage most California homeowners grew up on.

The California Attorney General’s Office has issued a guide for “financial elder abuse.” In this guide, (which you can find at the Attorney General website), they state:

“Financial elder abuse is the theft of money or property from an elder….it can be as simple as taking money from a wallet and as complex as manipulating a victim into turning over property to an abuser.”

The publication goes on to state: “This form of abuse can be devastating because an elder victim’s life savings can disappear in the blink of an eye, leaving them unable to provide for their needs and afraid of what an uncertain tomorrow will bring.”

The guide discusses “recognizing the warning signs” and states: “while financial elder abuse can take many forms, the most widespread abuses include telemarketing fraud, identity theft, predatory lending, and home improvement and estate planning scams.” Telemarketing fraud could come in the form of dealing with a loan broker over the telephone who attempts to coerce an elderly homeowner into believing a certain type of loan (ex. An Option Arm Loan) is the best for the homeowner (when in fact the borrower has no ability to repay a loan that builds negative amortization and which is likely to “recast” in the near future), or falsely trumping up a homeowners income in order to ensure a loan is funded and the broker is paid.

In the section discussing “Predatory Lending” the publication states:

“More than 80% of Americans aged 50 and older are homeowners. Elders are often the target of unscrupulous lenders who pressure them into high-interest rate loans that they may not be able to repay. Older homeowners are often persuaded to borrow money through home equity loans for home repairs, debt consolidation, or to pay health care costs. These loans are sold as “miracle financial cure,” and homeowners are devastated to find out they cannot afford to pay off the loans, and as a result, may lose their home. Often these loans are packed with excessive fees, costly credit insurance, pre-payment penalties, and balloon payments.”

Even California Banker’s Association (an association of California Banker’s) discusses the concept of elder financial abuse on its website – www.calbankers.com – by stating “Common elder abuse scenarios – obtaining money or property by undue influence, misrepresentation, or fraud….” This suggests that even Banker’s in California realize that elder abuse is “common” and that it is wrongful. But what is to be done about it? What is to be done when lenders and brokers advise and “steer” and influence elder homeowners into entering into loan transactions with sophisticated non-traditional loan products and artificially falsify income documentation because they know there is no true ability to repay the loan, much less qualify for it in the first place.

This is precisely the scenario in many cases that we see in our role as foreclosure defense counsel for elderly homeowners facing foreclosure or facing eviction following foreclosure. It is against this back-drop that we must act, to what extent will the California Courts exercise their inherent equitable power to protect elderly homeowners (over 65 years of age at the signing of the loan documents or an elder dependent adult) where the loan product is seen to be the product of fraud or deception (such as steering, false trumping of income, intentional misrepresentations, or other fraudulent and deceptive business practices) perpetrated by predatory brokers, lenders and loan servicers who seek profit over fiduciary duty?

CALIFORNIA ELDER ABUSE LAW

•A.    California Elder Abuse Statute

CALIFORNIA CODES

WELFARE AND INSTITUTIONS CODE

SECTION 15600-15601

 INTRODUCTION SECTION

 

 15600. (a) The Legislature recognizes that elders and dependent

adults may be subjected to abuse, neglect, or abandonment and that

this state has a responsibility to protect these persons.

 (b) The Legislature further recognizes that a significant number

of these persons are elderly. The Legislature desires to direct

special attention to the needs and problems of elderly persons,

recognizing that these persons constitute a significant and

identifiable segment of the population and that they are more subject

to risks of abuse, neglect, and abandonment.

 (c) The Legislature further recognizes that a significant number

of these persons have developmental disabilities and that mental and

verbal limitations often leave them vulnerable to abuse and incapable

of asking for help and protection.

 (d) The Legislature recognizes that most elders and dependent

adults who are at the greatest risk of abuse, neglect, or abandonment

by their families or caretakers suffer physical impairments and

other poor health that place them in a dependent and vulnerable

position.

 (e) The Legislature further recognizes that factors which

contribute to abuse, neglect, or abandonment of elders and dependent

adults are economic instability of the family, resentment of

caretaker responsibilities, stress on the caretaker, and abuse by the

caretaker of drugs or alcohol.

 (f) The Legislature declares that this state shall foster and

promote community services for the economic, social, and personal

well-being of its citizens in order to protect those persons

described in this section.

 (g) The Legislature further declares that uniform state

guidelines, which specify when county adult protective service

agencies are to investigate allegations of abuse of elders and

dependent adults and the appropriate role of local law enforcement is

necessary in order to ensure that a minimum level of protection is

provided to elders and dependent adults in each county.

 (h) The Legislature further finds and declares that infirm elderly

persons and dependent adults are a disadvantaged class, that cases

of abuse of these persons are seldom prosecuted as criminal matters,

and few civil cases are brought in connection with this abuse due to

problems of proof, court delays, and the lack of incentives to

prosecute these suits.

 (i) Therefore, it is the intent of the Legislature in enacting

this chapter to provide that adult protective services agencies,

local long-term care ombudsman programs, and local law enforcement

agencies shall receive referrals or complaints from public or private

agencies, from any mandated reporter submitting reports pursuant to

Section 15630, or from any other source having reasonable cause to

know that the welfare of an elder or dependent adult is endangered,

and shall take any actions considered necessary to protect the elder

or dependent adult and correct the situation and ensure the

individual’s safety.

 (j) It is the further intent of the Legislature in adding Article

8.5 (commencing with Section 15657) to this chapter to enable

interested persons to engage attorneys to take up the cause of abused

elderly persons and dependent adults.

 DEFINITIONS SECTION

 15610.07. “Abuse of an elder or a dependent adult” means either of

the following:

(a) Physical abuse, neglect, financial abuse, abandonment,

isolation, abduction, or other treatment with resulting physical harm

or pain or mental suffering.

  

15610.23. (a) “Dependent adult” means any person between the ages

of 18 and 64 years who resides in this state and who has physical or

mental limitations that restrict his or her ability to carry out

normal activities or to protect his or her rights, including, but not

limited to, persons who have physical or developmental disabilities,

or whose physical or mental abilities have diminished because of

age.

 

15610.25. “Developmentally disabled person” means a person with a

developmental disability specified by or as described in subdivision

(a) of Section 4512.

 

 15610.27. “Elder” means any person residing in this state, 65 years

of age or older.

 

15610.30. (a) “Financial abuse” of an elder or dependent adult

occurs when a person or entity does any of the following:

 

(1) Takes, secretes, appropriates, obtains, or retains real or

personal property of an elder or dependent adult for a wrongful use

or with intent to defraud, or both.

 

(2) Assists in taking, secreting, appropriating, obtaining, or

retaining real or personal property of an elder or dependent adult

for a wrongful use or with intent to defraud, or both.

 

(3) Takes, secretes, appropriates, obtains, or retains, or assists

in taking, secreting, appropriating, obtaining, or retaining, real

or personal property of an elder or dependent adult by undue

influence, as defined in Section 1575 of the Civil Code.

 

(b) A person or entity shall be deemed to have taken, secreted,

appropriated, obtained, or retained property for a wrongful use if,

among other things, the person or entity takes, secretes,

appropriates, obtains, or retains the property and the person or

entity knew or should have known that this conduct is likely to be

harmful to the elder or dependent adult.

  

(c) For purposes of this section, a person or entity takes,

secretes, appropriates, obtains, or retains real or personal property

when an elder or dependent adult is deprived of any property right,

including by means of an agreement, donative transfer, or

testamentary bequest, regardless of whether the property is held

directly or by a representative of an elder or dependent adult.

 

UNDUE INFLUENCE FOR ELDER ABUSES PURPOSES: (AS REFERENCED ABOVE)

1575. Undue influence consists:

1. In the use, by one in whom a confidence is reposed by another,

or who holds a real or apparent authority over him, of such

confidence or authority for the purpose of obtaining an unfair

advantage over him;

2. In taking an unfair advantage of another’s weakness of mind;

or,

3. In taking a grossly oppressive and unfair advantage of another’s

necessities or distress.

 

 WRIT OF ATTACHMENT

 15657.01. Notwithstanding Section 483.010 (SEE BELOW) of the Code of Civil

Procedure, an attachment may be issued in any action for damages

pursuant to Section 15657.5 for financial abuse of an elder or

dependent adult, as defined in Section 15610.30. The other provisions

of the Code of Civil Procedure not inconsistent with this article

shall govern the issuance of an attachment pursuant to this section.

In an application for a writ of attachment, the claimant shall refer

to this section. An attachment may be issued pursuant to this section

whether or not other forms of relief are demanded.

 

 483.010. (a) Except as otherwise provided by statute, an attachment

may be issued only in an action on a claim or claims for money, each

of which is based upon a contract, express or implied, where the

total amount of the claim or claims is a fixed or readily

ascertainable amount not less than five hundred dollars ($500)

exclusive of costs, interest, and attorney’s fees.

(b) An attachment may not be issued on a claim which is secured by

any interest in real property arising from agreement, statute, or

other rule of law (including any mortgage or deed of trust of realty

and any statutory, common law, or equitable lien on real property,

but excluding any security interest in fixtures subject to Division 9

(commencing with Section 9101) of the Commercial Code). However, an

attachment may be issued where the claim was originally so secured

but, without any act of the plaintiff or the person to whom the

security was given, the security has become valueless or has

decreased in value to less than the amount then owing on the claim,

in which event the amount to be secured by the attachment shall not

exceed the lesser of the amount of the decrease or the difference

between the value of the security and the amount then owing on the

claim.

(c) If the action is against a defendant who is a natural person,

an attachment may be issued only on a claim which arises out of the

conduct by the defendant of a trade, business, or profession. An

attachment may not be issued on a claim against a defendant who is a

natural person if the claim is based on the sale or lease of

property, a license to use property, the furnishing of services, or

the loan of money where the property sold or leased, or licensed for

use, the services furnished, or the money loaned was used by the

defendant primarily for personal, family, or household purposes.

(d) An attachment may be issued pursuant to this section whether

or not other forms of relief are demanded.

   

•B.     California Elder Abuse Case-Law

                                                          REPORTED DECISIONS

•1.      Zimmer v. Nawabi, 566 F. Supp.2d 1025, 2008 WL 7123093, (2008). In this case a Plaintiff elderly homeowner (79 years old) filed a lawsuit against a BROKER for elder abuse and a host of other legal claims including breach of fiduciary duty. The gravamen of Plaintiff’s complain was that the Broker lied about the amount of cash-out proceeds that would be tendered to Plaintiff at the close of the loan., and lied about the monthly payment amount and undisclosed Yield Spread Premium (YSP), and other non-disclosure of material terms of the loan. There was also an issue of a fraudulent release of legal claims Defendants fraudulently created and Plaintiff was instructed to sign the loan documents without reading them. This financial elder abuse case was also brought in the context of Plaintiff’s house facing foreclosure.

The Defendants argued there was no financial abuse or elder abuse and sought to dismiss Plaintiff’s claims. The Court failed to dismiss such claims and discussed the claim of Elder Abuse by stating: “Zimmer has a claim for financial elder abuse pursuant to Welfare and Institutions Code Section 15657 et seq. against Golden State (the Broker) because Golden State defrauded Zimmer out of the equity in her house while she was over 65 years old. She is entitled to actual and punitive damages and attorney fees.”

 In regard to the Elder Abuse cause of action, the Court also stated: “Financial elder abuse is defined in subsection 15610.30(a), which provides: “Financial abuse” of an elder or dependent adult occurs when a person or entity does any of the following: (1) takes, secretes, appropriates or retains real or personal property of an elder or dependent adult to a wrongful use or with intent to defraud or both. (2) Assists in taking, secreting, appropriating or retaining real or personal property of an elder or dependent adult to a wrongful use or with intent to defraud or both.

The court went on to hold that under Cal. Welf. & Inst. Code Section 15610.30(a)(1)-(2), “a person or entity is deemed to have taken, secreted, appropriated or retained property for a wrongful use, if among other things, the the person or entity takes, secretes, appropriates, or retains possession of property in bad faith. Id Section 15610.30(b). A person or entity is deemed to have acted in bad faith if the person or entity knew or should have known that the elder had the right to have the property transferred or made readily available to the elder or to his representative. Id Section 15610.30(b)(1). Lastly, a persona should have known of such right “if, on the basis of the information received by the person or entity or the person or entity’s authorized third party, or both, it is obvious to a reasonable person that the elder has such a right. The Court determined that the Broker’s obtaining of fees (personal property) in the amount of $10,700 was wrongfully obtained under these circumstances indicating false statements and misrepresentations.

The Court in Zimmer also addressed the issue of breach of fiduciary duty. To this issue the court stated: “A mortgage broker breaches his fiduciary duty to borrower under California law if he provides materially misleading and incomplete information regarding the terms of the loan, even if correct terms are in the loan documents and borrower does not read documents.” In addition the Court stated, “when brokering loans for borrower of modest means and limited experience in financial affairs, mortgage broker has a duty of oral disclosure of material loan terms and counseling, which require him to disclose orally the true rate of interest, penalty for late payments, and other material terms of the loan. The court found the elderly homeowner/borrower to be of limited means and lacking financial savvy in financial matters. The court pointed to the elderly homeowner’s “14 years of education.”

The court went on to state that: “Under California law, a mortgage loan broker acts in a fiduciary capacity that “not only imposes on him the duty of acting in the highest good faith toward his principal, but precludes the agent from obtaining any advantage over the principal. The duty obligates brokers to make a full and accurate disclosure of the terms of a loan to borrowers and always act in utmost good faith toward their principles.”

Finally, the Zimmer court addressed “enhanced remedies” under California’s elder abuse statute. “To utilize the Elder Abuse Act’s enhanced remedies, a plaintiff must prove by clear and convincing evidence that the defendant has been guilty of recklessness, oppression, fraud, or malice in the commission of the abuse. Id Section 15610.30(b)(2). A preponderance of the evidence standard governs a Plaintiff’s ability to recover “all other remedies otherwise provided by law.”

NOTE: Although Zimmer held that a loan broker (as opposed to a lender), who owed the borrower a fiduciary duty, was liable for elder financial abuse, such cause of action may also extend to a “financial institution” or lender who may or may not owe a fiduciary duty as discussed in the Toscano case below.

UNREPORTED DECISIONS

Note: There are a fair amount of unreported decisions I found dealing with financial elder abuse. To me, it means the Courts may be willing to help out a senior, and yet for various reasons, the court may not want the case reported.

(1) Darone Case (2001 WL 34144398). In this case the Court set forth the requirements to prove a prima facie case for financial elder abuse. Specifically, the Court held:

“Here, then, in order to state a claim of actionable financial abuse…..Plaintiff must allege: (a) that she is an “elder”, (b) that Defendant “took, secreted, appropriated her “money or property”, © that Defendant did so “to a wrongful use or intent to defraud, or both” and (d) that in doing so, Defendant was guilty of “recklessness, oppression, fraud or malice.” The Court held in Darone that there was no fiduciary duty required to state a claim for elder abuse despite defendants contentions.

•2.      Toscano v. Ameriquest Mortgage Company (non-reported in F.Supp 2d, 2007 WL 3125023 (E.D. Cal), (2007). In this case, a lender (as opposed to a loan broker) sought to dismiss financial elder abuse claims levied against him. The lender argued they owed no fiduciary duty to the borrower-homeowner, and therefore could not be liable for elder financial abuse. In Toscano, Plaintiff was a 65 year man who spoke only english. Although the loan was negotiated in Spanish, the loan documents were written in English. Defendant advised Plaintiff that the loan at issue (a loan at or below 6.3% interest) was the best loan for Plaintiff. The documents Plaintiff signed had loan terms of 7%. The Court held that a fiduciary relationship was not required to state a claim for financial elder abuse under California law. The Cout also went on to set forth a fiduciary duty test that would create a duty of care, even to lenders and financial institutions (as opposed to brokers) and set forth the test as follows:

“In California, the test for determining whether a financial institution owes a duty of care to the borrower-client involves the balancing of carious factors, among which are: (1) the extent to which the transaction was intended to affect the plaintiff, (2) the foreseeability of harm to him, (3) the degree of certainty that the plaintiff suffered injury, (4) the closeness of the connection between the defendants conduct and the injury suffered, (5) the moral blame attached to the defendants conduct, and (6) the policy or preventing future harm.” The Court stated “A FIDUCIARY RELATIONSHIO CAN ARISE WHERE THE LENDER BECOMES HEAVILY ENTANGLED WITH THE BORROWER.”

Although this case is not citeable, it does given reason to believe that the Courts may so hold this way in any future case, allowing a borrower to bring a claim of financial elder abuse against both a broker and the lender. The Lender could be seen as “assisting” financial elder abuse in these types of cases. More problematic is the case of the “holder in due course” lender who will claim no liability whatsoever for acts of elder abuse that may have been committed at the loan origination stage. See below for more on holder in due course defense.

 LEGAL ARGUMENTS SEEKING TO ENJOIN FORECLOSURE OF LOANS ORIGINATED AS THE PRODUCT OF ELDER ABUSE

•1.      A LENDER OR LOAN SERVICER SHOULD NOT BE PERMITTED TO FORECLOSE ON A PREDATORY ELDER ABUSE LOAN (THE FRUITS OF THE POISOINOUS TREE) WHERE THE RESULT IS TO LEAVE AN ELDERLY PERSON WITHOUT SAFE AND AFFORDABLE HOUSING SOLUTIONS.

It is common knowledge that many loan servicers may prefer foreclosing on homes, rather than modifying loans, due to financial incentives often provided for in various pooling and servicing agreements. These loan servicers likely enjoyed making money off the servicing of these loans that are the product of elder abuse, as well as other predatory loans such as pay option ARM loans (Pick-a-pay negative amortization loans).

This is a strong public policy argument to be made that a Court should step in and exercise its equitable powers to prevent a foreclosure where an elderly California homeowners is about to be foreclosed upon and kicked out of their homes and thrust into an uncertain future.

As discussed below, California Business and Professions Code Section 17203 grants Courts the express authority “as may be necessary to restore to any person in interest, any money or property, real or personal, which may have been acquired by means of such unfair competition.”

Where a violation of the California Elder abuse statutes can be shown, this violation can serve as an underlying violation sufficient for California Business and Professions Code Section 17200 purposes (17200 prohibits acts of unfair competition such as violations of other statutes), and the Court should restore the loan proceeds and loan payments back to Plaintiff – similar to a TILA rescission claim and/or return any foreclosure property back to the homeowner. These are just an example of the types of arguments that could and should be made to the judge.

The other option, of allowing the elderly victim to be “kicked to the curb” should not be permitted even where a subsequent lender claims it is a “holder in due course.” The subsequent lenders “create the marketplace” for these types of loans, and “enjoy the fruits of the poisonous tree.” But for their secondary market purchases of these types of predatory loans, the original lenders (who would be forced to hold their own garbage loans) would not abuse California elderly homeowners who would have direct recourse against them.

•2.      THE COURTS SHOULD PROTECT CALIFORNIA ELDERLY HOMEONWERS WHO WERE STEERED INTO COMPLEX AND NON-TRADITIONAL FINANCIAL PRODUCTS AND SHOULD DEMAND THAT THE LENDER OR LOAN SERVICER SHOW GOOD CAUSE BEFORE PURSUING A JUDICIAL FORECLOSURE SALE OR AN UNLAWFUL DETAINER ACTION (FOLLOWING A FORECLOSURE SALE THAT WAS NOT STOPPED).

As referenced in this memorandum, the State of California protects elderly citizens (those over 65) from fraudulent, oppressive, wrongful and harmful acts that threaten to cause irreparable harm. In the Case of Hernandez v. Stabach, 145 Cal.App.3d 309, 193 Cal. Rptr. 350 (1983), the Court granted a preliminary injunction preventing Defendant (a Landlord accused of retaliatory eviction – an “unfair” and “illegal” act under California Business and Professions Code Section 17200) from filing an unlawful detainer action to evict the non-rent paying tenant until such time as the Defendant Landlord appeared in the Superior Court and obtained leave of Court, (by showing good cause for the eviction) which would permit such unlawful detainer action to be filed. In Stabach, the Court held:

“The challenged portion of the preliminary injunction does not enjoin defendant from initiating unlawful detainer actions against any Plaintiff for nonpayment of rent……or deny him access to the courts. Rather, it requires only that he obtain leave of Superior Court to institute such actions in the municipal court. The injunction does not prohibit the institution of unlawful detainer actions if a showing of good cause is made.”

The Court went on to state:
“California Business and Professions Code Section 17203 provides: Any person performing or proposing to perform an act of unfair competition within this state may be enjoined in any court of competent jurisdiction. THE COURT MAY MAKE SUCH ORDERS OR JUDGEMENTS, INCLUDING THE APPOINTMENT OF A RECEIVER, AS MAY BE NECESSARY to prevent the use or employment by any person of any practice which constitutes unfair competition, as defined in this chapter, or as may be necessary to restore to any person in interest, any money or property, real or personal, which may have been acquired by means of such unfair competition.”

The Court finalized its opinion by stating:
“We conclude that it was within the court’s inherent equity power and the power conferred upon it by Business and Professions Code Section 17203 to enjoin defendant from evicting or attempting to evict any plaintiff without first obtaining permission from the court. By requiring defendant to seek leave of court, the trial court sought to MONITOR AND PREVENT DEFENDANT’S RETALIATORY ATTEMPTS TO EVICT TENANTS THAT ASSERT THEIR RIGHTS.”

The Stabach case suggests the courts have the express and inherent power to assist victims of elder financial abuse in the State of California. The question remains, will, and to what extent are the Courts willing to go to in order to protect past victims of financial elder abuse in the context of mortgage loans (hidden fees, bait and witch tactics, fraud in the factum, nondisclosure of material loan terms, false and fraudulent trumping of income, steering clients into the wrong financial product etc.)? In each of these scenarios the broker and lender (and subsequent investor of the loan on the secondary market) each enjoy handsome profits, fees and enjoy the fruits of loan origination at the elder homeowners expense and at time, to the loss of their property.

 

POTENTIAL PITFALLS TO ASSERTING A PREDATORY LENDING CLAIM, IN THE FORM OF AN ELDER ABUSE VIOLATION, IN THE CONTEXT OF A FORECLOSURE DEFENSE CASE

•1.      Holder in Due Course: Where a company purchases a loan on the secondary market (i.e. they were not the originator of the loan, they will often claim they are a “holder in due course” and cannot be held liable for fraud, deception, elder abuse, etc. at the origination stage of the loan. This is a good argument in most cases. If a party can successfully assert holder in due course status, there are limited claims a party can make against them. We have addressed the issue of holder in due course status in other blog posts. Just google “vondran holder in due course” and you should be able to find it. Just know this is a potential defense in every predatory lending case, including elder abuse cases. The trick is to show the secondary lender is not a holder in due course and not entitled to HDC protection against liability.

 

•2.      Federal Preemption: As if matters weren’t bad enough, and the chips stacked in favor of the powerful lenders and their mighty lobbiest in D.C., there is another doctrine of law that seeks to aid lenders in battling predatory lending claims like elder abuse. In many cases, the lenders or loan servicers who are named as defendants in lawsuits will claim the Plaintiff-homeowners claims are pre-empted by Federal law. One of these laws is HOLA. Again, we have another article that addresses this issue. Google “vondran pre-emption predatory lending.” Again, for purposes of this article, be aware that there are defenses that will be raised to every predatory lending claim you seek to raise. That is the battle folks.

                                                                    CONCLUSION

Elders over 65 are one of the fastest growing segments of our society. People are living longer. That being said, many seniors grew up on 30 year fixed mortgages and are now being enticed with exotic and toxic loan products such as negative amortization loans, reverse mortgages, interest-only products, and adjustable rate mortgage products. Seniors can be particularly vulnerable when dealing with greedy and financially savvy loan brokers and lenders who seek profits over fiduciary duty and a sense of fair play. Someone has to protect seniors who are victimized in the predatory loan process. It is simply unfair to treat seniors in California like every other borrower. Seniors often survive on a fixed income, and if they are forced to the streets by Courts and Financial institutions that could care less about their well-being we can truly admit we are devolving as a society. The California elder abuse law should be used to prevent foreclosure where brokers, lenders, servicers, and other financial institutions don’t play by the rules and abuse seniors who deserve protection. The Courts must take a case-by-case approach and enjoin wrongful foreclosure and return property to the Senior where elder abuse is affirmatively shown to have been perpetrated.

 

 ELDER ABUSE LINKS

 National Center on Elder Abuse: www.ncca.aoa.gov

 National Clearinghouse on Abuse Later in Life: www.ncall.com

 Senior Care Attorney: www.SeniorCareAttorneys.com

 National Academy of Elder Law Attorneys: www.naela.org

 OptionArmLawyer: www.OptionArmLawyer.com

 RescindMyLoan: www.RescindMyLoan.net

  OTHER FORECLOSURE DEFENSE AND BANKRUPTCY LINKS

 Foreclosure Defense Show: www.LoanModRadio.com

 BK Attorney Steve: www.BKAttorneyS.net

 Foreclosure Defense Resource Center: www.ForeclosureDefenseResourceCenter.com

 Trial Plan Fraud: www.TrialPlanFraud.com

 Vondran Law: www.VondranLaw.com and www.Vondranlegal.com

 Vondran Blogs: http://activerain.com/attorneysteve

 Foreclosure Defense Radio Show (Loan Modification Radio) www.LoanModRadio.com

 LOOKING FOR A LAWYER TO TAKE YOUR CASE ON A CONTINGENCY FEE BASIS?  WE TAKE WORLD SAVINGS AND WACHOVIA LOANS ON CONTINGENCY.  TO FIND A LAWYER WHO MAY TAKE A CASE ON CONTINGENCY FEE BASIS IN YOUR AREA SEARCH THE DATABASE AT WWW.CONTINGENCYCASE.COM.

Arizona bankruptcy resources

When you are considering filing for bankruptcy in the Greater Phoenix Arizona region (Phoenix, Scottsdale, Tempe, Mesa, etc.), you will likely be filing your case in the United States Bankruptcy Court for the District of Arizona. 

The address for the United States Bankruptcy Court for the District of Arizona is 230 N. First Ave, Suite 101, Phoenix, AZ 85003.  The general telephone numbers are 602-682-4000 / 800-556-9230.

To find your bankruptcy filing office in Arizona use this tool: http://www.azb.uscourts.gov/ZipTool.aspx.

Here is a link to common forms and publications that may assist you in filing for bankruptcy in Phoenix Arizona with or without a Phoenix bankruptcy Lawyer http://www.azb.uscourts.gov/default.aspx?PID=73.

Here are some Arizona bankruptcy links of interest that may assist you in understanding the bankruptcy process in Phoenix, Arizona: http://www.azb.uscourts.gov/default.aspx?PID=9.

More good information about filing for bankruptcy in and around Phoenix Arizona can be found at www.BKAttorneyS.Net

KEYOWRDS: PHOENIX BANKRUPTCY ATTORNEY / PHOENIX BANKRUPTCY LAWYER / SCOTTSDALE BANKRUPTCY LAWYER / SCOTTSDALE BANKRUPTCY ATTORNEY /FOUNTAIN HILLS BANKRUPTCY LAWYER /FOUNTAIN HILLS BANKRUPTCY ATTORNEY /CREDITORS HEARING / AUTOMATIC STAY / ADVERSARY PROCEEDING / LIEN STRIP