Tag Archives: non-judicial foreclosure

Michigan Court Concludes that the Servicer of the Loan Was Not in Violation of the Notice or Loan-Modification Requirements of Michigan’s Foreclosure-by-Advertisement Statute

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The Michigan court in deciding the home mortgage foreclosure case of Pettey v. CitiMortgage, Inc., 2013 U.S. App. LEXIS 22299, 2013 FED App. 0936N (6th Cir.), 2013 WL 5832535 (6th Cir. Mich. 2013), concluded that the servicer of the loan was not in violation of the notice or loan-modification requirements of Michigan’s foreclosure-by-advertisement statute, Mich. Comp. Laws § 600.3204, because the mortgagors failed to take action under the statute that would have triggered the servicer’s notice and loan-modification obligations.

In doing so, the court affirmed the district court’s rejection of the mortgagors’ unjust-enrichment and deceptive acts and unfair practices claims. Moreover, the court was persuaded that the district court’s grant of the servicer’s motion to dismiss and denial of the mortgagors’ motion for reconsideration were proper. The court relied on the reasoning handed down by the lower court in their opinion, with the caveat that defects or irregularities in a foreclosure proceeding resulted in a foreclosure that was voidable, not void ab initio.

California Northern District Court Dismissed Plaintiff’s Claims Due to Flawed Reliance on Non-California Law

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The California Northern District Court in deciding Newbeck v. Washington Mutual Bank, et al., No. C 09-1599 CW (N.D. Cal., 2010), dismissed the plaintiff’s claims.

In reaching this conclusion, the California Northern District Court noted that plaintiff‘s reliance on non-California law was flawed.

The court further noted that the plaintiff, in using non-California law to analyze judicial foreclosures, was erroneous and misplaced. The court noted that the law cited also did not support a claim to set aside a non-judicial foreclosure.

Eastern District of California Found That MERS Was Not Required to Register to do Business in California

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The United States District Court, Eastern District of California, in deciding Bogdan v. Countrywide Home Loans, 09-1055 (E.D. Cal. 2010), found that MERS was not required to register to do business in California.

The Eastern District of California, after considering the plaintiff’s contentions, also dismissed the plaintiff’s fraud and unfair competition claims against MERS.

Eastern District of California Dismisses Plaintiff’s Wrongful Foreclosure Claims Due to Plaintiffs’ Lack of Tender

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The United States District Court, Eastern District of California in deciding the case of Small v. Mortgage Electronic Registration Systems, Inc., et al., No. 2:09-CV-0458 (E. D. Cal., 2010), concluded that dismissing the plaintiff’s wrongful foreclosure claims due to lack of tender by the plaintiffs was appropriate.

Plaintiffs filed their foreclosure action, naming three entities and two individuals as defendants, and alleged causes of action for unlawful foreclosure and unlawful eviction.

Defendants sought dismissal of plaintiffs’ complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) on the grounds that plaintiffs failed to state any cognizable claim. After considering the plaintiff’s claims, the court dismissed them due to lack of tender by the plaintiff.

Court Finds That MERS, as the Beneficiary Under the Deed, Had the Authority to Assign its Beneficial Interest

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The United States District Court, Northern District California in Benham v. Aurora Loan Services, No. C-09-2059, (N.D.Cal. 2009) dismissed the plaintiff’s claims in the entirety.

The plaintiff brought a litany of claims. Among the plaintiff’s claims, was that MERS and violated the Rosenthal Fair Debt Collection Practices Act (“RFDCPA” or “Rosenthal Act”), Cal. Civ. Code 1788 et seq. FAC ¶¶ 62-65. Plaintiff also alleged negligence and fraud.

After considering the plaintiff’s contentions the court dismissed all of the plaintiff’s claims. The court found, that MERS as the beneficiary under the deed of trust had the authority to assign its beneficial interest under the deed of trust to assignee.

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

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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.

Southern District of California Holds that Production of Original Note is Not Required to Proceed with a Non-Judicial Foreclosure

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The United States District Court for the Southern District of California in Putkkuri v. Recontrust Co., Case No. 08cv1919 WQH (AJB) (S.D.Cal. 2009) granted the defendants’ motion to dismiss.

The plaintiff in this case demanded written proof of the defendants’ right to proceed in foreclosure, and the plaintiff claimed that no such proof had been offered. The plaintiff alleged that the defendants “engaged in a pattern and practice of utilizing the non-judicial foreclosure procedures of this State to foreclose on properties when they do not, in fact, have the right to do so.”

The plaintiff also alleged that in pursuing non-judicial foreclosure, defendants falsely represented that they had a right to payment under plaintiff’s residential loan, which was secured by the deed of trust. However, after considering the plaintiff’s claims the court dismissed them, holding that production of the original note is not required to proceed with a non-judicial foreclosure.