Constructive fraud consists:
1. In any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault, or any one claiming under him, by misleading another to his prejudice, or to the
prejudice of any one claiming under him; or,
2. In any such act or omission as the law specially declares to be fraudulent, without respect to actual fraud.
VIOLATION OF CIVIL CODE §1572
84. Plaintiff reallege and incorporates by reference the above paragraphs as though set forth fully herein.
85. The misrepresentations by Defendants’ and/or Defendants’ predecessors, failures to disclose, and failure to investigate as described above were made with the intent to induce Plaintiff to obligate himself on the Loan in reliance on the integrity of Defendants and/or Defendants’ predecessors.
86. Plaintiff is an unsophisticated customer whose reliance upon Defendants and/or Defendants’ predecessors was reasonable and consistent with the Congressional intent and purpose of California Civil Code § 1572 enacted in 1872 and designed to assist and protect consumers similarly situated as Plaintiff in this action.
87. As an unsophisticated customer, Plaintiff could not have discovered the true nature of the material facts on their own.
88. The accuracy by Defendants and/or Defendants’ predecessors of representation is important in enabling consumers such as Plaintiff to compare market lenders in order to make informed decisions regarding lending transactions such as a loan.
89. Plaintiff was ignorant of the facts which Defendants and/or Defendants’ predecessors misrepresented and failed to disclose.
90. Plaintiffs reliance on Defendants and/or Defendants’ predecessors was a substantial factor in causing their harm.
91. Had the terms of the Loan been accurately represented and disclosed by Defendants and/or Defendants’ predecessors, Plaintiff would not have accepted the Loan nor been harmed.
92. Had Defendants and/or Defendants’ predecessors investigated Plaintiff’s financial capabilities, they would have been forced to deny Plaintiff on this particular loan.
93. Defendants and/or Defendants’ predecessors conspired and agreed to commit the above mentioned fraud.
94. As a proximate result of Defendants and or Defendants’ predecessors fraud, Plaintiff has suffered damage in an amount to be determined at trial.
95. The conduct of Defendants and/or Defendants’ predecessors as mentioned above was fraudulent within the meaning of California Civil Code § 3294(c)(3), and by virtue thereof Plaintiff is entitled to an award of punitive damages in an amount sufficient to punish and make an example of the Defendants.
VIOLATION OF § 1788.17 OF THE RFDCPA
77. Plaintiff reallege and incorporates by reference the above paragraphs as though set forth fully herein.
78. California Civil Code §1788.17 requires that Defendants comply with the provisions of 15 U.S.C. § 1692, through their acts including but not limited to, the following:
(a) The Defendants violated California Civil Code § 1788.17 by engaging in conduct, the natural consequence of which is to harass, oppress, and abuse persons in connection with the collection of the alleged debt, a violations of 15 U.S.C. § 1692(d);
(b) The Defendants violated California Civil Code § 1788.17 by misrepresenting the status of the debt, a violations of 15 U.S.C. § 1692(e)(s)(A);
(c) The Defendants violated California Civil Code § 1788.17 by using unfair or unconscionable means to collect or attempt to collect a debt, a violation 15 U.S.C. § 1692(f); and
(d) The Defendants violated California Civil Code § 1788.17 by using deceptive means to collect or attempt to collect a debt from the Plaintiff, a violation of 15 U.S.C. § 1692e(10).
80. The foregoing violations of 15 U.S.C. § 1692 by Defendants result in separate
violations of California Civil Code § 1788.17.
81. The forgoing acts by Defendants were willful and knowing violations of Title
1.6C of the California Civil Code (FRDCPA), are sole and separate violations under California Civil Code § 1788.30(b), and trigger multiple $1,000.00 penalties.
82. California Civil Code § 1788.17provides that Defendants are subject to the remedies of 15 U.S.C. § 1692(k), for failing to comply with the provisions of 15 U.S.C. § 1692(b)(6) and § 1692(c)c.
83. The foregoing acts by Defendants were intentional persistent, frequent, and devious violations of 15 U.S.C. § 1692, which trigger additional damages of $1,000.00 under 15 U.S.C. § 1692(k)(a)(2)(A).
VIOLATION OF CALIFORNIA CIVIL CODE 2923.6
64. Plaintiff reallege and incorporate by reference the above paragraphs as though set forth fully herein.
65. Defendants’ Pooling and Servicing Agreement (hereinafter “PSA”) contains a duty to maximize net present value to its investors and related parties.
66. California Civil Code 2823.6 broadens and extends this PSA duty by requiring servicers to accept loan modifications with borrowers.
67. Pursuant to California Civil Code 2823.6(a), a servicer acts in the best interest of all parties if it agrees to or implements a loan modification where the (1) loan is in payment default, and (2) anticipated recovery under the loan modification or workout plan exceeds the anticipated recovery through foreclosure on a net present value basis.
68. California Civil Code 2823.6(b) now provides that the mortgagee, beneficiary, or authorized agent offer the borrower a loan modification or workout plan if such a modification or plan is consistent with its contractual or other authority.
69. Plaintiffs’ loan is presently in default.
70. Plaintiffs are willing, able, and ready to execute a modification of their loan on the following terms:
(a) New Loan Amount: insert amount
(b) New Interest Rate: insert amount
(c) New Loan Length: insert amount
(d) New Payment: insert amount
71. The present fair market value of the property is insert value.
72. The Joint Economic Committee of Congress estimated in June, 2007, that the average foreclosure results in $77, 935.00 in costs to the homeowner, lender, local government, and neighbors.
73. Of the $77,935.00 in foreclosure costs, the Joint Economic Committee of Congress estimates that the lender will suffer $50,000.00 in costs in conducting a non-judicial foreclosure on the property, maintaining, rehabilitating, insuring, and reselling the property to a third party. Freddie Mac places this loss higher at $58,759.00.
74. The anticipated recovery through foreclosure on a net present value basis is $525,000.00 or less.
75. The recovery under the proposed loan modification at $insert amount exceeds the net present recovery through foreclosure of $insert amount by over $5,000.00.
76. Pursuant to California Civil Code §2823.6, Defendants are now contractually bound to accept the loan modification as provided above.
Defendants’ Lack of Standing to Enforce A Non-Judicial Foreclosure Pursuant To California Commercial Code § 3301
46. A promissory note is person property and the deed of trust securing a note is a mere incident of the debt it secures, with no separable ascertainable market value. California Civil Code §§ 657, 663. Kirby v. Palos Verdes Escrow Co., 183 Cal. App. 3d 57, 62.
47. Any transfers of the notice and mortgage fundamentally flow back to the note:
“The assignment of a mortgage without a transfer of the Indebtedness confers no right, since debt and security are inseparable and the mortgage alone is not a subject of transfer, ” Hyde v. Mangan (1891) 88 Cal. 319, 26 P 180, 1891 Cal LEXIS 693; Johnson v, Razy (1919)181 Cal 342, 184 P 657; 1919 Cal LEXIS 358; Bowman v. Sears (1923, Cal App) 63 Cal App 235, 218 P 489, 1923 Cal App LEXIS 199; Treat v. Burns (1932) 216 Cal 216, 13 P2d,724, 1932 Cal LEXIS 554.
48. ”A mortgagee’s purported assignment of the mortgage without an assignment of the debt which is secured is a legal nullity.” Kelley V. Upshaw (1952) 39 Cal 2d 179, 246 P2d 23, 1952 Cal. LEXIS 248.
49. ”A trust deed has no assignable quality independent of the debt; it may not be assigned or transferred apart from the debt; and an attempt to assign the trust deed without a transfer of the debt is without effect.” Domarad v. Fisher & Burke, Inc. (1969 Cal. App. 1st Dist) 270 Cal. App. 2d 543, 76 Cal. Rptr. 529, 1969 Cal. App. LEXIS 1556.
50. The Promissory Note is a negotiable instrument.
51. Transferring a Deed of Trust by itself does not allow enforcement of the instrument unless the Promissory Note is properly negotiated.
52. Where an instrument has been transferred, enforceability is determined based upon possession.
53. California Commercial Code § 3301 limits a negotiable instrument’s enforcement to the following:
“Person entitled. to enforce” an Instrument means (a) the holder of the instrument, (b) a nonholder in possession of the instrument who has the rights of a holder, or (c) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to
Section 3309 or subdivision (d) of Section 3418. A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.
54. None of the Defendants are present holders of the instrument.
55. None of the Defendants are nonholders in possession of the instrument who has
rights of the holder.
56. None of the Defendants are entitled to enforce the instrument pursuant to section 3309 or subdivision (d) of Section 3418.
57. Defendants have no enforceable rights under California Commercial Code 3301(a) to enforce the negotiable instrument.
58. Since there is no right to enforce the negotiable instrument, the Notice of Default provisions of California Civil Code § 2924 and Notice of Sale provisions of California Civil Code § 2924(f) were likewise never complied with, and there is no subsequent incidental right to enforce any deed of trust and conduct a non-judicial foreclosure.
Plaintiff Suffered Damages As A Result of Defendants’ Conduct:
59. As a direct result of Defendants’ acts, Plaintiff has incurred actual damages consisting of mental and emotional distress, nervousness, grief, embarrassment, loss of sleep, anxiety, worry, mortification, shock, humiliation, indignity, pain and suffering, and other injuries.
60. Plaintiff incurred out of pocket monetary damages.
61. Plaintiff continues to incur monetary damages.
62. Plaintiff will incur the loss of their personal residence if a non-judicial foreclosure is allowed to proceed.
63. Each of Defendants harassing acts were so willful, vexatious, outrageous, oppressive, and maliciously calculated enough, so as to warrant statutory penalties and punitive damages.
Defendants’ Lack Standing To Conduct A Non-Judicial Foreclosure Pursuant To California Civil Code 2932.5
35. Defendants have no standing to enforce a non-judicial foreclosure.
36. Defendants are strangers to this transaction, and have no authority to go forward with the foreclosure and Trustee’s Sale.
37. Plaintiff executed a Promissory Note (hereinafter the “Note”) and a Deed of Trust to insert defendant.
38. Insert defendant is the Lender and only party entitled to enforce the Note and any security interest with it.
39. Insert defendant is not listed anywhere in the Deed of Trust or Promissory Note.
40. In California, California Civil Code § 2932.5 governs the Power of sale under an assigned mortgage, and provides that the power of sale can only vest in a person entitled to money payments: “Where a power to sell real property is given to a mortgagee, or other encumbrancer, in an instrument intended to secure the payment of money, the power is part of the security and vests in any person who by assignment becomes entitled to payment of the money secured by the instrument. The power of sale may be exercised by the assignee if the assignment is duly acknowledged and recorded.”
41. The Insert County County Recorder’s Office does not contain any evidence
of a recorded assignment from insert defendants, to insert defendant,
42. Insert defendant has never assigned their rights under the Note.
43. The power of sale may not be exercised by any of the Defendants since there was never an’ acknowledged and recorded assignment pursuant to California Civil Code § 2932.5.
44. Since the Defendants did not comply with California Civil Code
§2932.5, the Notice of Default provisions of California Civil Code § 2924 and Notice of Sale provisions of California Civil Code §2924(f) were likewise never complied with.
45. Insert defendant never complied with the Notice of Default provisions of California Civil Code §2924 and Notice of Sale provisions of California Civil Code §2924(f).
They can’t foreclose if they did not get it endorsed and the party they purchase from could not endorse they where out of business!31 Dec
Defendants Are Not Holders In Due Course Since Plaintiff Was Duped Into An Improper Loan And There Is No Effective Endorsement:
21. Plaintiff incurred a “debt” as that term is defined by California Civil 17 Code §1788(d) and 15 U.S.C. § 1692a(5), when he obtained a Loan on their Personal Residence.
22. The loan is memorialized via a Deed of Trust and Promissory Note, each of which contain an attorney fees provision for the lender should they prevail in the enforcement of their contractual rights.
23. Plaintiff has no experience beyond basic financial matters.
24. Plaintiff was never explained the full terms of their loan, including but not limited to the rate of interest how the interest rate would be calculated, what the payment schedule should be, the risks and disadvantages of the loan, the prepay penalties, the maximum amount the loan payment could arise to.
25. Certain fees in obtaining the loan, were also not explained to the Plaintiff, including but not limited to “underwriting fees,” “MERS registration fee,” “appraisal fees,” “broker fees”, “loan tie in fees,” etc.
26. A determination of whether Plaintiff would be able to make the payments as specified in the loan was never truly made.
27. Plaintiff’s income was never truly verified.
28. Plaintiff was rushed when signing the documents, the closing process provided no time for review and took minutes to accomplish.
29. Plaintiff could not understand any of the documents and signed them based on representations and the trust and confidence the Plaintiff placed in Defendants’ predecessors.
30. Plaintiff is informed and believe that Defendants and/or Defendants’ predecessors established and implemented the policy of failing to disclose material facts about the Loan, failing to verify Plaintiff’s income, falsifying Plaintiff’s income, agreeing to accept a Yield Spread Premium, and causing Plaintiff’s Loan to include a penalty for early payment.
31. Plaintiff is informed and believes that Defendants and/or Defendants’ predecessors established such policy so as to profit, knowing that Plaintiff would be unable to perform future terms of the Loan.
32. Plaintiff was a victim of Fraud in the Factum since the forgoing misrepresentations caused them to obtain the home loan without accurately realizing, the risks, duties, or obligations incurred.
33. The Promissory Note contains sufficient space on the note itself for endorsement whereby any assignment by allonge is ineffective pursuant to Pribus v. Bush, 118 Cal. App. 3d 1003 (May 12, 1981).
34. Defendants are not holders in due course due to Fraud in Factum and ineffective endorsement.