California Trend: Homeowners have Standing to Challenge Assignments

21TruthInLendingLaws

California Trend: The Truth Matters

By Attorney Charles Marshall, Southern California

Time to provide some of the backstory to how the recent breakthrough decision of Gieseke v. Bank of America came about. Of course it goes back to Yvanova (February 2016). This blog has addressed that decision on many occasions. And then there is Keshtgar v. U.S. Bank (April 2016). I’ve blogged a bit about that decision as well.

Between those two cases, back in early March, the case of Lundy v. Selene Finance became relevant. Unlike the two California Supreme Court decisions of Yvanova and Keshtgar, Lundy it is a U.S. District Court case (Northern District of California), and moving forward as I write this on several causes of action at the trial level- including quiet title and wrongful foreclosure.

One Jon Tigar is the presiding judge in Lundy. He issued an order to show cause in early March, on the Monday following a Friday filing of an opposition to a pending motion to dismiss.

The order to show cause issued then was much like the order to show cause issued by the 9th Circuit Court of Appeals, prior to the monumental Gieseke decision: Both orders to show cause directed defendants to submit written briefing as to why their position as defendants, in light of Yvanova, should not be disregarded- with the respective plaintiffs prevailing.

In the event, the Lundy order to show cause was ultimately upheld in major portions, those portions proving pivotal to the the later Gieseke decision: To wit, plaintiffs do have standing to contest void assignments associated with certain mortgage loans, even in cases in which the subject property had not gone to sale.

You will recall, regular readers of my blog posts, that a narrow interpretation of the Yvanova holding meant that it did not apply to so-called ‘test cases’, those in which the subject property had not yet been sold at a foreclosure sale. Yet Keshtgar changed all that. And although Keshtgar was not decided until late-April 2016, Judge Tigar in his order-to-show-cause considered staying the entire Lundy matter pending a decision in Keshtgar. Remember as well that Keshtgar’s review by the California Supreme Court itself was stayed pending resolution of Yvanova.

What a chain of events: Argument about the importance of Keshtgar as a pre-auction lawsuit is put into the opposition by the plaintiff’s attorney to an otherwise routine motion to dismiss in Lundy.  Judge Tigar sees the clear rationale for applying Keshtgar’s analysis to Yvanova-related cases, and issues an order to show cause as to why defendants should not fail in their motion to dismiss. Then that line of argument is in the 9th Circuit’s backdrop to the Giseke order to show cause, and voila, pre-auction lawsuits are now established as viable in California.

What this all means for borrowers, particularly in non-judicial foreclosure cases, is that Lundy is an early trend to what I believe we will see much more of in California and elsewhere: Lawsuits going to trial, or garnering good settlements as defendants continue to avoid trial. More and more of these lawsuits will avoid being dismissed on demurrers and motions to dismiss, even surviving motions for summary judgment. Naturally not all of these types of cases will move forward, but so many will, that the law likely will be reworked even more in the homeowner’s direction in the next year or so, and the good fight we have fought all of these years, will result in a lot more wins for our side.

To Contact Attorney Charles Marshall:

Email: cmarshall@marshallestatelaw.com
Website: marshallesquire.com
Phone number: 619.807.2628, 619.755.7825

5 Responses

  1. Did not reblog this anywhere, but enjoyed reading the mindset…

  2. Hey everybody;
    Does anybody around here know how to do Securitization Audits without costing a fortune?

    Thank you and Make it a Great Day.

    Scott Thompson
    816-206-2594
    http://www.columbiamortgageplus.com

  3. I have no evidence that trust’s moolah funded loans, though I believe they did or at least that the people involved in this maelstrom wouldn’t have hesitated to funnel those monies down to the closing table. But to the extent it’s true, and thus so are Mr. G’s arguments about that, I just read that fraud includes “a secret plan not to fulfill the contract when it was made”. I’d say having no intention to fund a loan by and with good faith / one’s own funds is a secret plan not to fulfill the contract. The borrower, for pete’s sake, is putting the title to his home in a trust for which the named lender is the damn beneficiary and what kind of bull is that when that party isn’t really a party at all? You can loan money you borrowed, but you can’t loan stolen money in a legitimate deal and then try to stand on a non-existant right. If there were fraud by the secret plan, there are remedies for both the borrower and the victim imo. The victim of the absconded funds might have an equitable remedy against the borrower,* but not the way they’re posturing this bs (using false reliance on inapplicable rules and laws) and causes of action against the thief. And the thief should get his reward from the borrower, too. I mean, if someone takes your car, you’re not necessarily damaged, but they’ll still have to go to jail, right? (unless you’re headquartered on wall street)
    This is only one argument against investors’ funds being used to fund loans at the closing table, but it’s one that should squarely belong to the borrower to make without argument he has no standing to make it.

    *In order to avail himself of an equitable remedy against the borrower, shouldn’t the victim of theft have to barrel thru the thief first? How is it equitable not to?.

  4. Reblogged this on Deadly Clear and commented:
    Dig deeper into the documents and you will find the agreements and the data fields driving the system specifically include the mortgagors.

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: