Wrongful Foreclosure 2923.5 and 2923.6 the recent holdings

21 May

To start with, Gaitan is an unreported case, and should not be cited, nor rely on by the court. But more to the point, Gaitan is the only case in California to so hold. It summarily states that there is no private cause of action without much discussion. No other court so held.

The cases dealing with the issue of private cause of action deal specifically with section 2923.6 dealing with the duty of the servicers to the investors in modifying loans, and very generally, in fact conclusionary, with section 2923.5. both statutes were enacted under the Perata Mortgage Relief Act. Almost all the cases, excluding Gaitan, which is unreported, dismissed section 2923.5 claim (the one in which the lender must give preforeclosure notice to the borrower) on the merits, while dismissing section 2923.6 for lack of private cause of action.

Here is the reasoning for no private cause of action in section 2923.6. It is easily distinguished from the other non judicial foreclosure statutes:
“[N]othing in Cal. Civ.Code § 2923.6 imposes a duty on servicers of loans to modify the terms of loans or creates a private right of action for borrowers. The Perata Mortgage Relief Act was enacted relatively recently, and thus California courts have had little chance to examine its provisions. Nevertheless, section 2923.6, passed along with section 2923.5, clearly does not create a private right of action. That section solely “creat[es] a duty between a loan servicer [*19] and a loan pool member. The statute in no way confers standing on a borrower to contest a breach of that duty.” Farner v. Countrywide Home Loans, No. 08cv2193 BTM (AJB), 2009 U.S. Dist. LEXIS 5303, 2009 WL 189025, at *2 (S.D. Cal. Jan. 26, 2009). Other courts to consider this question have agreed unanimously with the Farner court. See Tapia v. Aurora Loan Servs., LLC, No. 1:09-cv-01143 AWI (GSA), 2009 U.S. Dist. LEXIS 82063, 2009 WL 2705853, at *1 (E.D. Cal. Aug. 25, 2009); Anaya v. Advisors Lending Group, No. CV F 09-1191 LJO DLB, 2009 U.S. Dist. LEXIS 68373, 2009 WL 2424037, at *8 (E.D. Cal. Aug. 5, 2009); Pantoja v. Countrywide Home Loans, Inc., F. Supp. 2d , No. C 09-01615 JW, 2009 U.S. Dist. LEXIS 70856, 2009 WL 2423703, at *7 (N.D. Cal. July 9, 2009); Connors v. Home Loan Corp., No. 08cv1134-L(LSP), 2009 U.S. Dist. LEXIS 48638, 2009 WL 1615989, at *7 (S.D. Cal. June 9, 2009).
II compiled the cases in California dealing with the private cause of action as it relates to the statutory scheme for non judicial foreclosure and they clearly treat section 2923.6 differently from the other statutes and for a good reason.. I hope this will help.
Kuoha v. Equifirst Corp
., Slip Copy, 2009 WL 3248105, S.D.Cal.,2009
(Deciding section 2923.5 claim on the merits but citing Anaya v. Advisors Lending Group No. CV F 09-1191, 2009 WL 2424037, (E.D.Cal., Aug.5, 2009) for the proposition that there is no private right of action, although Anaya dealt only with Section 2923.6.)
Anaya v. Advisors Lending Group
No. CV F 09-1191, 2009 WL 2424037, (E.D.Cal., Aug.5, 2009) (No private cause of action to enforce section 2923.6)
Gaitan v. Mortgage Electronic Registration Systems
, not Reported in F.Supp.2d, 2009 WL 3244729
C.D.Cal.,2009. (Section 2923.5 contains no language that indicates intent to create a private right of action.)
Yulaeva v. Greenpoint Mortg. Funding, Inc
., Slip Copy, 2009 WL 2880393, E.D.Cal.,2009.
(In light of plaintiff’s concession that there was no private right of action to enforce 2923.5, the court declined to independently evaluate the legislature’s intent.)
Ortiz v. Accredited Home Lenders, Inc, 639 F.Supp.2d 1159, S.D.Cal.,2009
(the court rejected the bank’s argument that there was no private cause of action to enforce section 2923.5, and noted that while the Ninth Circuit has yet to address this issue, the court found no decision from this circuit where a § 2923.5 claim had been dismissed on the basis advanced by bank.)
Lee v. First Franklin Financial Corp
., Slip Copy, 2009 WL 1371740, E.D.Cal.,2009.
(Deciding a claim based on Section 2923.5 on the merits.)
Gentsch v. Ownit Mortgage Solutions Inc
., 2009 WL 1390843, (E.D.Cal., May 14, 2009)
(Ortiz’ court indicated that this case decided a claim based on section 2923.5 on the merits, but I could not open the case)
Permpoon v. Wells Fargo Bank Nat. Ass’n
, Slip Copy, 2009 WL 3214321, S.D.Cal.,2009.
(No private cause of action under section 2923.6, but deciding section 2923.5 on the merits)
Nool v. HomeQ Servicing
, 653 F.Supp.2d 1047, E.D.Cal.,2009.
(Granting leave to amend a claim under section 2923.6, but noting that there is no authority that supports a private right of action under this section. Mentioning that plaintiff sought leave to amend a claim under section 2923.5, without any further discussion.)
Paek v. Plaza Home Mortg., Inc
., Not Reported in F.Supp.2d, 2009 WL 1668576, C.D.Cal.,2009.
(Dismissing claim under 2923.5 on the merits, because plaintiff’s allegations were inadequate to “raise a right to relief above the speculative level.” And dismissing claim under 2923.6 on the merits, but quoting Farner v. Countrywide Home Loans, 2009 WL 189025 at *2 (S.D.Cal. Jan. 26, 2009) that “nothing in section 2923.6 imposes a duty on servicers of loans to modify the terms of loans or creates a private right of action for borrowers.”).
Farner v. Countrywide Home Loans
, Not Reported in F.Supp.2d, 2009 WL 189025, S.D.Cal.,2009 (nothing in section 2923.6 imposes a duty on servicers of loans to modify the terms of loans or creates a private right of action for borrowers.)
Collins v. Power Default Services, Inc
., Slip Copy, 2010 WL 234902, N.D.Cal.,2010.
(Citing In Connors v. Home Loan Corp., District Court for the Southern District of California determined that there was no private right of action under section 2923.6. but granting leave to amend claim for “Violation of Statutory Duties” alleging that Defendants “failed to give proper notice under California law,” and issued ” notice of trustee’s sale that was not compliant with California law” to identify the statutory duties were violated, noting specifically possible sections 2924(a)(1), and 2924f.)
Connors v. Home Loan Corp
., Slip Copy, 2009 WL 1615989, S.D.Cal.,2009
(no private right of action with respect to section 2923.6.)
Glover v. Fremont Inv. and Loan
, Slip Copy, 2009 WL 5114001, N.D.Cal.,2009.
(No private right of action with respect to section 2923.6, but granting leave to amend re claim under 2923.5, to include factual allegations to support the bare legal conclusions.)
Reynoso v. Chase Home Finance
, Slip Copy, 2009 WL 5069140, N.D.Cal.,2009
(Section 2923.6 does not create a private right of action for purported violations of its provisions)
Tapia v. Aurora Loan Services, LLC
, Slip Copy, 2009 WL 2705853, E.D.Cal.,2009.
(“California Civil Code section 2923.6 does not create a cause of action for Plaintiff. Subdivision (a) of the section applies only to servicers and parties in a loan pool.” )
Reynoso v.Paul Financial, LLC
, Slip Copy, 2009 WL 3833298, N.D.Cal.,2009.
(Plaintiff’s claim for specific performance to modify the loan terms pursuant to section 2923.6(a), dismissed with prejudice. “Nothing in Cal. Civ.Code § 2923.6 imposes a duty on servicers of loans to modify the terms of loans or creates a private right of action for borrowers.”)
Enders v. Countrywide, Home Loans, Inc
., Slip Copy, 2009 WL 4018512, N.D.Cal.,2009.
(No private cause of action for section 2923.6)
Biggins v. Wells Fargo & Co.
2009 WL 2246199 (N.D.Cal.,2009)
(dismissing a section 2923.6 claim for being a “stand-alone claim for relief” and informing parties that it could be brought under a § 17200 claim).
Dizon v. California Empire Bancorp, Inc
., Not Reported in F.Supp.2d, 2009 WL 3770695, C.D.Cal.,2009.
(No private right of action under section 2923.6)
Santos v. Countrywide Home Loans
, Slip Copy, 2009 WL 3756337, E.D.Cal.,2009.
(No private cause of action under 2923.6)
Maguca v. Aurora Loan Services
, Not Reported in F.Supp.2d, 2009 WL 3467750, C.D.Cal.,2009.
(No private right of action for 2923.6, and deciding section 2923.5 on the merits: cause of action for violation of section 2923.5 dismissed because the allegations in the complaint were conclusory, and were contradicted by the notice of default provided by Aurora.)
Butera v. Countrywide, Home Loans, Inc
., Slip Copy, 2009 WL 3489873, E.D.Cal.,2009.
(No private right of action under section 2923.6. But citing section 2924(a)(1), and quoting Munger v. Moore, 11 Cal.App.3d 1, 7, 89 Cal.Rptr. 323 (1970): ‘trustee or mortgagee may be liable to the trustor or mortgagor for damages sustained where there has been an illegal, fraudulent or wilfully oppressive sale of property under a power of sale contained in a mortgage or deed of trust.”’, and finding that complaint lacks facts of foreclosure irregularities or facts to support wrongful foreclosure to warrant dismissal of the fourth claim.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: