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Deed of Trust

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Yee owned a home in LA; Hon owned one in San Francisco.  They were romantically involved and were business partners in a company that ordered $141,000 of goods from Panrox, giving Panrox deeds of trust on both houses.  The business didn't pay Panrox which commenced an action to collect the debt.  Court records reflected it was settled in 1998, and… Read More

Before a nonjudicial foreclosure sale, the borrower/owner filed a worngful foreclosure suit against the deed of trust beneficiary and recorded a lis pendens.  This case holds that the purchaser at the nonjudicial foreclosure sale who thereafter brought an unlawful detainer action against the borrower/owner was wrongly awarded judgment because it did not prove it duly perfected title given the lis… Read More

Borrowers lacked standing to challenge the assignment of their deed of trust from the prior beneficiary to La Salle Bank as Trustee for  WaMu 2006-AR19 when the correct name of the assignee was La Salle Bank as Trustee for WaMu Mortgage Pass-Through Certificates Series 2006-AR19 Trust.  Whether an abbreviation of the full name or a misnomer, the incorrect designation of… Read More

Particularly as amended in 2019, Civ. Code 2923.7 requires a loan servicer to appoint a SPOC for each borrower who seeks a foreclosure alternative.  The borrower need not specifically request a SPOC in order to trigger the statute.  Interpreting Civ. Code 2924.12, the decision holds that for post-foreclosure damages purposes, the court must analyze harm in three steps.  First, did… Read More

The Supreme Court holds that lenders and loan servicers do not owe borrowers a duty of care in handling their loan modification applications.  Lender and borrower are in privity of contract, and the economic loss rule prevents recovery for purely economic loss based on negligence between contracting parties.  The Biakanja factors apply only to parties not in privity of contract. … Read More

A party cannot acquire good title by adverse possession against the beneficiary of a deed of trust that was recorded on the property before the alleged adverse possession began.  This is for third reasons.  First, the beneficiary has no right to possession of the property until after foreclosure on the deed of trust.  Since the beneficiary cannot oust the alleged… Read More

Under Family Code 1102(a), both spouses must sign a deed of trust that encumbers real estate held as community property.  If one spouse does not sign the deed of trust, that spouse can invalidate the deed of trust.  Here, the property was deeded to the spouses as joint tenants, but under Family Code 760 property acquired during marriage is presumed… Read More

As this decision explains, Civil Code 2911 provides that a lien is extinguished when the statute of limitations has run on the principal obligation that the lien secures.  This statute has limited application to deeds of trust.  While the lien of a deed of trust that is enforceable by judicial action (i.e., a judicial foreclosure action under CCP 725a) expires… Read More

Robin held a senior deed of trust. Crowell held a junior lien on the same property.  Robin commenced a judicial foreclosure action against the debtor and the property but failed to name and serve Crowell as a defendnat in the suit.  Some years after the judicial foreclosure sale, Robin brought this quiet title action against Crowell to "complete" the judicial… Read More

The Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”) preempts a Nevada law that limited deficiency judgments on foreclosure to the amount by which the price the owner paid to acquire the loan exceeded the foreclosure sale price.   Read More

A borrower lacks standing to challenge foreclosure based on late assignment of the loan to a securitized trust as breach of the trust agreement renders the assignment voidable, not void, the borrower is not a third party beneficiary of that agreement, and the defects do not harm the borrower who would be foreclosed anyway.  Read More

CCP 580d does not bar a creditor from suing a borrower to collect on a note secured by a junior lien that was extinguished by a non-judicial foreclosure of a senior lien, even if the creditor also held the senior lien on which it non-judicially foreclosed.  Read More