Justia Banking Opinion Summaries

In 2004, Brown obtained a $450,000 loan secured by a deed of trust recorded against her Oakland property, identifying Washington Mutual as the lender and beneficiary and CRC as the trustee. Washington Mutual failed in 2008. The FDIC was appointed its receiver and sold Chase many of the assets and liabilities (P&A Agreement). In 2011, CRC recorded a notice of default as trustee for Chase, claiming that Brown was in arrears by $60,984.42. Chase then assigned the deed of trust to Deutsche Bank; CRC remained as the trustee and recorded a notice of sale. In 2012, Brown filed the first of three lawsuits challenging the foreclosure. In 2013, CRC executed a third notice of sale. Two days later, Brown filed her third lawsuit, alleging that the assignment to Deutsche Bank was invalid and the foreclosure proceedings were initiated without authority. The trial court granted a request for judicial notice, which covered foreclosure-related documents, filings from the earlier lawsuits, and the P&A Agreement, then dismissed without leave to amend. The court of appeal affirmed. Brown‟s contention that Deutsche Bank and CRC lacked authority to enforce the deed of trust was contradicted by matters subject to judicial notice. View "Brown v. Deutsche Bank Nat. Trust Co." on Justia Law

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

Plaintiff alleged defendants (Bank of America, Wells Fargo Bank, Citibank and the Mortgage Electronic Registration Systems, Inc. (MERS)) wrongfully foreclosed on his home. The trial court sustained a demurrer to a third amended complaint and entered a judgment of dismissal. On appeal, plaintiff contended the foreclosure was wrongful because irregularities in the securitization of his mortgage deprived defendants of authority to foreclose, and because the foreclosure occurred while the loan servicer was reviewing his loan for a modification under the Home Affordable Modification Program (HAMP). The Court of Appeal agreed with the latter contention, and reversed as to plaintiff’s cause of action against the loan servicer for violation of Business and Professions Code section 17200 et seq. (UCL). The Court also reversed some of the orders denying leave to amend. The Court concluded that plaintiff has otherwise stated a cause of action for wrongful foreclosure, provided the party conducting the foreclosure sale was an agent of the loan servicer. Plaintiff should be given leave to amend to allege that agency relationship, if true. Finally, plaintiff has otherwise stated a cause of action for cancellation of the trustee’s deed upon sale, but has failed to join the foreclosing trust deed beneficiary as a defendant. The foreclosing beneficiary, who allegedly purchased the property at the foreclosure sale, was an indispensable party. Provided the property is still owned of record by the foreclosing beneficiary, and not by a bona fide purchaser for value, plaintiff should be given leave to amend to add the foreclosing beneficiary as a party to the cause of action for cancellation of instruments. In all other respects the judgment was affirmed. View "Majd v. Bank of America" on Justia Law

Plaintiff-appellant FirstMerit Bank, N.A. sought to enforce a money judgment against defendant-respondent Diana Reese by applying for an order assigning Reese’s interest in two trusts to FirstMerit and an order restraining her from otherwise disposing of her right to payment under the trusts. The trial court denied the motion. FirstMerit appealed, arguing: (1) Cod Civ. Proc. section 708.510 gave the trial court authority and jurisdiction to order Reese to assign FirstMerit funds she receives from the trusts; (2) section 708.520 gave the court authority to issue an order restraining Reese from transferring her interest in the trusts; and (3) section 709.010 did not affect the court’s authority or jurisdiction to enter such orders. Finding no reversible error, the Court of Appeal affirmed. View "FirstMerit Bank v. Reese" on Justia Law