The Myth Mongers will come out in force saying this opinion means assignment snafus can void an otherwise perfectly just non-judicial foreclosure.
In fact, it says that a borrower may sue to undo a non-judicial foreclosure on the basis that the foreclosing party did not own beneficial interest in the note because of a flawed assignment of the note.
The court specifically denied suggesting the borrower may preemptively sue to prevent the foreclosure because of a questionable assignment.
Other courts in California have repeatedly held that the borrower has no standing to sue regarding the wrongful assignment of the note or a breach of the pooling and servicing agreement because the borrower did not suffer an injury from it, does not receive benefits from it, and never became a party to it.
The opinion cited numerous other opinions, including Glaski, showing that a VOID assignment deprives an alleged creditor of the “standing” (right) to order a foreclosure in a non-judicial foreclosure situation. The court made the point that a borrower needs such a protection in a non-judicial foreclosure. Otherwise, anybody could order a foreclosure and force a sale of the property for borrowers NOT in default.
This means the trial court might award damages to Yvanova for the wrongful foreclosure. It does appear that a non-existent entity made a void assignment to Deutschebank NTC as trustee for a Morgan Stanley securitization trust after the bankruptcy and asset transfer for New Century Mortgage Corporation.
Yvanova’s case will now go back to trial where she might decide to renew her effort to undo the foreclosure because of a faulty assignment, and to get the court to award her damages. The court might deny her as other courts have others who challenged an allegedly faulty assignment. But she will most likely collect damages for the wrongful foreclosure and loss of her house.
What’s the bottom line issue here?
Plain and simple – the assignment has NOTHING to do with whether the borrower owes the debt and must ultimately forfeit the property to foreclosure sale for breaching the note.
This is such a HARD CORE OBLIGATION that numerous states allow the non–judicial foreclosure process to become the equivalent of repossessing a car on which the borrower fails to make timely payments. The principle: creditors should not have to bear the expense of slogging through lengthy litigation in order to force a recalcitrant borrower to give up the collateral for the loan in default. Creditors do NOT owe borrowers a free house.
However, a VOID assignment makes proper foreclosure impossible, and a court should punish the trustee and creditor who execute a foreclosure, even for a borrower in default.
And in that case, the right creditor will straighten out ownership of the note (possibly by a blank indorsement), and order the foreclosure anew. This time the borrower in default will lose the house for good.
Is there another issue of importance here?
Yes. upwards of 95% of all home loan borrowers have suffered injuries in the form of appraisal fraud, mortgage fraud, legal errors, contract breaches, and/or regulatory law breaches. To discover these, the borrower must hire a competent professional to conduct a comprehensive examination of all documents related to the loan transaction. With an examination report in hand to prove the injuries, the borrower may negotiate a favorable settlement or sue for damages. Only such an examination, and artfully presenting the causes of action revealed in the exam report, can provide a reliable way for the borrower to end up with cash in hand or other financial compensation for the injuries.
If you need or want such a mortgage examination, or want to discuss your case, fill in the contact form at http://mortgageattack.com
IN THE SUPREME COURT OF CALIFORNIA
TSVETANA YVANOVA, )
Plaintiff and Appellant, )
) Ct.App. 2/1 B247188
NEW CENTURY MORTGAGE )
CORPORATION et al., )
) Los Angeles County
Defendants and Respondents. ) Super. Ct. No. LC097218