Editor: David Reiss
Brooklyn Law School

October 15, 2013

California Eastern District Court Notes There is no Requirement for the Production of the Original Note to Initiate a Non-Judicial Foreclosure Sale Under California Law

By Ebube Okoli

The California Eastern District Court in Castaneda et al v. Saxon Mortgage Services, Inc. et al., No. 2:2009cv01124 (E.D. Cal. 2010) dismissed the plaintiff’s claim alleging wrongful foreclosure due to foreclosing party’s lack of note.

Plaintiffs Cesar and Suzzanne Castaneda filed this action against defendants Saxon Mortgage Services, Inc., plaintiffs’ action purported to state a claim for “wrongful foreclosure” against Saxon. Plaintiffs attempted to base this claim on California Commercial Code section 3301, alleging that Saxon was not in possession of the note, was not a beneficiary, assignee or employee of the entity in possession of the note, and was therefore not a “person entitled to enforce” the security interest on the property in accordance with section 3301. (SAC ¶¶ 187-89.)

The court however found that section 3301 did not govern non-judicial foreclosures, which is governed by California Civil Code section 2924.Further, the court noted there is no requirement for the production of the original note to initiate a non-judicial foreclosure sale under California law.

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