Daniels v. Select Portfolio Servicing, Inc.

The Danielses obtained a $650,000 adjustable rate loan secured by a deed of trust on their Santa Cruz residence. When their interest rate adjusted upward, they spent years in unsuccessful attempts to obtain a loan modification from their then-loan servicer, Bank of America (BofA). In the process, they fell behind on their loan payments, allegedly at the behest of BofA. They sued BofA and several other entities to prevent a non-judicial foreclosure sale of their home and to collect monetary damages. The trial court dismissed without leave to amend. The court of appeal reversed and remanded, holding that: when a lender acquires by assignment a loan being administered by a loan servicer, the lender may be liable to the borrower for misrepresentations made by the loan servicer, as the lender‟s agent, after that assignment; and, a loan servicer may owe a duty of care to a borrower through application of the “Biakanja” factors, even though its involvement in the loan does not exceed its conventional role. View "Daniels v. Select Portfolio Servicing, Inc." on Justia Law