California Eviction Judgment Cures a Wrongful Foreclosure

24 Apr

March 31, 2011 Posted In: Mortgage

By Law Office of James J. Falcone on March 31, 2011 9:50 PM | Permalink

In a recent court decision homeowners in Los Angeles were foreclosed. The foreclosing lender then filed an eviction action (unlawful detainer); the former owners stipulated the eviction judgment. The Homeowners filed suit for wrongful foreclosure.

The claim was that a Notice of Default was recorded on behalf of ‘Option One’ as beneficiary, but there was no substitution showing that Option One was the new beneficiary of record, and the foreclosure was conducted on behalf a trustee for which there was no substitution recorded.

The court dismissed the homeowners lawsuit. The court found that no substitution showing Option One as the new beneficiary of record with the statutory authority to designate a substituted trustee. The beneficiary of record remained Home Loans USA, Inc., the original beneficiary and lender to plaintiff in her refinance transaction. But even so, the eviction judgment which the homeowners stipulated to was res judicata as to plaintiffs’ claims in this action which all arise from the alleged invalidity of the foreclosure sale- they essentially agreed that it was already determined that there were no defects in the foreclosure, and that the lender had good title with which to evict them. “Res Judicata” means that the issue was already determined by a court.

The court stated “By stipulating to judgment against them, plaintiffs conceded the validity of Wells Fargo’s allegations that the sale had been duly conducted and operated to transfer “duly perfected” legal title to the property.”

Unlawful Detainer is a quick proceeding, and the trial seldom gets 30 minutes of court time. This decision will encourage sophisticated foreclosing lenders to move to eviction quickly to cut off claims of wrongful foreclosure, and sophisticated homeowners to hire a real estate attorney to represent them. It is nearly impossible to prove defects in the foreclosure at an eviction trial, and the owner must file their own suit and obtain an injunction from it going forward while they litigate the foreclosure.

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8 Responses to “California Eviction Judgment Cures a Wrongful Foreclosure”

  1. Carrie Bekker April 24, 2011 at 12:10 pm #

    Filing a quiet title suit is the only way to beat the banksters at their own game. And, while you’re at it, include as defendants the notary bond company, the notary, and the person whose signature was notarized because the only way you’ll get that notary bond is to sue them.

    If you’re looking for an excellent lawyer in LA and Ventura counties, please email me.

    • John Vitencz April 24, 2011 at 9:29 pm #

      I would be interested in further information on the
      legal approaches to filing quiet title suit. My “originator lender” is/was Washington Mutual Bank FA and California Reconveyance Company is the “original” and indicated current Trustee and also functioning as a debt collector. The successor servicer is presently JPMorgan Chase Bank NA. The refi loan was a HUD loan
      and FDIC facilitaded the insolvency transition to Chase
      becoming the successor servicer. I do not know who the “holder in due course” is presently-if any.

    • cindy johnson April 26, 2011 at 10:46 am #

      Hi Carrie,

      My name is Cindy and I am overwhelmed (to say the least) and in need of “good” advice and legal direction. I am 63 yrs. old and had home foreclosed on April 12,2011. Embarrassed to say that I paid mod. company to file appl. package with bank of america and to stop sale date. They told me they sent everything in to the bank in time. I talked to bank only to discover that mod. co. did nothing, did not submit modification appl. nothing. Tried to stop sale with NACA but fannie mae said since they did not receive mod. package, they would not stop sale.
      I gave bank of america my complete savings retirement to catch up a while ago. Everything I have is tied up in home. Lost my teaching job. Have no family, no where to go, can’t afford to rent. My home is the ONLY thing I have left in life. I realize that bank does not care in the least about any of this.

      Want to get home back. Want to get modification and live happily ever after. Don’t understand all this legal info I am reading about and so don’t know if there is fraud or any errors in my foreclosure. Do know that on refi from Dec. 2007 (after recently reviewing it closely)there are major errors in the closing costs, double charges, ended up paying close to $10,000 closing costs for final hud costs sheet never saw.
      May I have the name and phone number of the attorney you are referring to in your above blog? Or anyone reputable you think may assist me in an attempt to negotiate with bank, fannie mae or whatever it takes to keep my home?
      Thank you so very much Carrie.
      Cindy Johnson
      (909) 944-8033
      (909) 908-1347 cell

    • oliza July 30, 2011 at 12:07 am #

      Chase Bank tried twice to foreclose my house in 10/2010 & 5/2011. I don’t have an attorney yet, it just I got scammed thousands and thousands of $$$$ to some scumbags lawyer who took my money and left. Please refer one that can save my house and no more ripping off lawyers.

    • JOHN C. HACKER III September 29, 2011 at 12:09 pm #

      CARRIE,GOD PLEASE HELP ME ,IM having to file yet another answer to a unlawful detainer summons and complaint,from my neighbor whom loaned me 12,000 dollars and turned out to be the first guy in line whom bought my home in an illegal and wrongful forclosure thru OCWEN SERVICING CO., IM STILL IN MY HOME THAT MY FOLKS BOUGHT IN 1967,AND HAS BEEN IN MY NAME SINCE 1999. theres nothing even recorded at county clerks office giving >NOMINEE/DEBT COLLECTOR, standing or merit to do what theyve done,i just gave these people 12,000.00 dollars and made all my payments ontime,GOD,LADY PLEASE HELP ME IM IN TEARS ,

  2. business review May 5, 2011 at 12:19 am #

    The stated intent of the legislation is to provide homeowners who are at risk of losing their homes due to foreclosure or nonpayment of taxes with the information necessary to make informed decisions regarding the sale or transfer of his or her home to on equity purchaser..The first thing to remember is that the statute only applies to foreclosure-rescue transactions which is specifically defined as transactions in which i residential real property in foreclosure is conveyed to an equity purchaser equity purchaser is defined in the statute as any person who acquires a legal equitable or beneficial ownership interest in any residential real property as a result of a foreclosure-rescue transaction but specifically excludes interests obtained through foreclosure court order and various intra-family conveyances ii the homeowner maintains a legal or equitable interest in the residential real property conveyed i.e. Of particular importance is a provision that creates a rebuttable presumption that the foreclosure rescue transaction is really a loan transaction.

  3. Los Angeles Bankruptcy Attorney October 27, 2011 at 10:23 pm #

    Your website is helping so many homeowners.

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