Golden State Foreclosure Tales

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MORTGAGE EXPERT
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Distressed borrowers in California who are fighting the foreclosure process are lobbing allegations that include forged signatures, violations of mortgage regulations and failed modification attempts. Some of the borrowers are seeing success.

A summary judgment in favor of U.S. Bank, N.A., was overturned on Sept. 11 by the Court of Appeals of California, Fourth District. The borrower, Pam Ragland, claims that the mortgage broker in the June 2002 transaction with Downey Savings forged her signature on some of the loan documents to conceal that the mortgage was adjustable-rate.

Downey failed in November 2008, and U.S. Bank took over its assets — including Ragland’s loan.

When the trial court dismissed Andrea Skov’s action against defendants including U.S. Bank, N.A., as trustee for Credit Suisse First Boston CSFB 2004-AR3, alleging improprieties in the non-judicial foreclosure process, Skov appealed. The Court of Appeals of California, Sixth District, found that her second amended complaint sufficiently pleaded a violation of Civil Code section 2923.5.2, and it reversed the judgment. Skov, who stopped making payments in June 2009, had financed her Saratoga, Calif., home with a $1.5 million loan.

“In sum, there is a factual issue as to whether there was compliance with the requirements of section 2923.5 prior to the filing of the notice of default,” the decision stated. “Accordingly, the trial court erred in sustaining the demurrer.”

While the U.S. Court of Appeals, Ninth Circuit, affirmed a trial court dismissal of claims by Richard Gale that First Franklin Loan Services violated the Truth-in-Lending Act when it failed to respond to his phone calls, the appeals court allowed Gale to proceed with his claims that Franklin and the other defendants engaged in illegal conduct by wrongfully foreclosing on his property. The case was remanded for the district court to consider state law claims.

After she completed a trial modification payment plan as part of the Home Affordable Modification Program process, Divinia Abigail Barroso’s payment was lowered by Ocwen Loan Servicing LLC from the trial payment amount of $1,302 to $1,295 in October 2009. She signed a revised modification agreement in December 2009 and made $1,300 payments until April 2010.

Then Barroso learned on May 7, 2010, that the property had been foreclosed the previous month. She filed a complaint, and the trial court issued an order sustaining a demurrer. Barroso filed an appeal with the Court of Appeals of California, Second District, and the demurrer was reversed to the extent it is based on allegations regarding the modification agreement.

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