We have been getting a slew of calls from Arizona and California homeowners calling us after their house has been sold at a foreclosure sale. Here are a sample of the kinds of things we are CONSTANTLY hearing:
- “Can you help me, they just sold my house without warning, I got no notice of the sale…..?”
- “Can I sue my lender, I was in a trial plan modification agreement (on my second or third payment, etc.) and my lender just foreclosed on me. What’s the deal, I thought I was approved by HAMP….?”
- “My house was sold but the lender did not follow the foreclosure laws….can you sue those &^!**#* to get my house back?”
- “The lender has posted a notice of sale on my door, but I think they are trying to work out a modification with us so I am not going to do anything for the meantime hoping they will give me a modification that allows me to keep my house.”
- “Truth in Lending (“TILA Audits”), what’s that? My loan was 2.5 years ago, and it was a refinance transaction but I will not deal with that issue right now, I have a “law center” working on my case, they are in control of everything.”
- “I am just going to file for Chapter 7 Bankruptcy, that will save my house from foreclosure right?”
- “I just made my final trial plan modification payment so that will stop the foreclosure sale right?”
- “the lady on the phone at the lenders office told me to stop making payments and they will work out the loan modification for me, that should do the trick right?”
- “my loan modification file has been submitted to a negotiator for review, therefore, I do not have to worry about them foreclosing on me.”
- “the loan servicer said they were willing to work with me to save my home, and that after submitting financial information over the phone they said I qualify, that puts me in a good and safe position right?”
This is just a sample of the kinds of things we hear from callers to our law firm. We are a bit surprised of the gullibility and naieviety of some of the people who think the banks are their friends, and their to help them share in the bailout money. This couldn’t be further from the truth. In our experience, yes, there are loan modifications getting done, but NO, everyone does not qualify, and everyone will not be helped by HAMP, HAFA and similar programs.
THE “LENDER LENDER PLEASE DONT MAKE ME TENDER” PROBLEM
Here is the crux of the “having trust and faith in your banks, lenders, and loan servicers” of the problem, if a lender forecloses on your property, whether you were in the middle of HAMP review, HAFA review, etc., and regardless of whether the foreclosure laws in Arizona or California were followed, if your house is foreclosed, the first thing a lender will say when we file a lawsuit is “your client cannot tender the full balance of the loan so therefore you cannot challenge the foreclosure sale process.”
What? Say that again? OK, If your house is sold, and you want to try to set aside the sale challenging a wrongful foreclosure, and if you file a civil lawsuit, the lenders will cite several cases as precedent that you cannot challenge the unlawful acts of a lender, loan servicer, trustee, MERS (whatever the case may be) in an attempt to set aside the foreclosure sale UNLESS YOU CAN ALLEGE THAT YOU ARE READY, WILLING AND ABLE TO TENDER THE FULL BALANCE OF THE MORTGAGE YOU OWE.
Yes, I know that sounds a little strange, unfair, and inequitable. They will argue in their answer, motion for demurrer, motion in opposition to preliminary injunction etc., that you have no right to “ask for equity” (i.e. to quiet title or set aside a trustee sale) unless you “do equity.”
Does this hold up, well folks, it is the law, and judges are supposed to follow the law. Of course, there is at least one challenge, there is a 100 year old rule that says the Courts do not have to require a full tender “where it would be unjust to require such.” So, I suppose there is always hope, but perhaps the same chances of winning a lottery, who knows.
At any rate, the moral of this story is this: THINK CAREFULLY BEFORE YOU TRUST A SINGLE WORD YOUR LENDER OR LOAN SERVICER SAYS. THEM TELLING YOU THAT YOU ARE ELIGIBLE FOR HAMP OR HAFA (SHORT SALES) OR A LOAN MOD, OR THEM GIVING YOU A TRIAL PLAN, ETC., THIS DOES NOT MEAN THEY WILL NOT SECRETLY AND DECEPTIVELY SELL YOUR HOME UNDER A CLOUD OF DECEPTION AND THEN HAVE THEIR LAWYERS TELL THE JUDGE “YOUR HONOR, THEY CANNOT CHALLENGE MY CLIENT’S NONSENSE AND ILLEGAL ACTIVITIES UNDER THE FORECLOSURE LAWS BECAUSE THE BORROWER CANNOT TENDER.”
Just giving you a heads up. The minute you are facing foreclosure (i.e. you get a notice to accelerate or a notice of default, do yourself a favor, seek out the services of a foreclosure attorney. Have your loan reviewed for a TILA violation that may raise an extended three year rescission right, and/or find other predatory lending violations that may be compensible/actionable in a court of law. The lenders and loan servicers fear very little in this process, and they have lawyers working on their side telling them how they can use the law in their favor, avoid compliance with foreclosure laws, remove cases to federal court etc. You need someone on your side to see if you have any legal rights, see if you can rescind your loan, see if you can obtain an injunction to stop foreclosure where the lenders refuse to play by the rules, file bankruptcy where applicable, or pursue a short sale that may save your credit from the harmful effects of foreclosure, etc. In the war on foreclosure, you have to be decidedly proactive, rather than reactive. The house you save may be your own.
Steve Vondran, Esq. is an attorney licensed to practice law in California and Arizona. He is currently assisting homeowners in foreclosure defense cases, bankruptcy chapter 7, predatory lending litigation, TILA audits, Short sales, Deed-in-lieu of foreclosure, injunctions, lis pendens, and deficiency judgment issues.
He can be reached at (877) 276-5084 or emailed at steve@vondranlaw.com
We are getting more and more calls from people who have decided to give up on the hopes of principal loan balance reduction (we have always told people principal loan balance reductions are like a bigfoot sighting) and instead seek to short sell their property letting the bank deal with the property, especially where the stubborn bank (that got their bailout) refuses to help the homeowner save their home by providing a reasonable and meaningful loan modification.
Now, in the context of shot sales, there are a few things to consider:
(1) Will you be liable for a deficiency judgment (meaning if the lender allows you to sell your home for less than its worth, can the lender come back against you for a deficiency judgment?
We have talked about deficiency judgments in Arizona on one of our other websites: Click here for more general legal information: http://www.arizonadeficiencyjudgment.com/
(2) Are there tax implications involved with the lender forgiving debt owed?
(3) Are you entitled to $1,500 relocation expenses following a short sale under the HAFA (Short Sales Incentives law)?
(4) Do you qualify for HAFA?
We outlined the general qualifications for HAFA and some of the general rules on our HAFA short sale blog which can be found here: http://activerain.com/blogsview/1546150/short-sales-overview-before-and-in-anticipation-of-hafa
(5) Can a forensic loan audit and letter to your lender help assist in them accepting a short sale over forcing you into foreclosure? Do you have any predatory lending violations that you can leverage? Is it better to file a lawsuit against your lender?
We have previously outlined some of the things we look for in an Attorney forensic loan audit on this website: http://vondranlegal.com/2009/08/15/what-is-a-forensic-loan-audit/
(6) What other options might you have if the lender refuses to accept your short sale? Options such as filing bankruptcy or pursuing a deed-in-lieu of foreclosure?
Our Arizona bankruptcy website can be found at www.ArizonaBankruptcyResourceCenter.com
(7) If the lender insists on denying your short sale, have they followed the foreclosure process that would permit them to legally foreclose on you?
(8) Are there outstanding issues that can be solved with a Qualified Written Request under RESPA?
We have discussed in general terms the topic of Qualified Written Request under another blog that can be found here: http://www.foreclosuredefenseresourcecenter.com/forensicloan-loan-audits/qualified-written-request/
(9) Do you have a right to rescind your loan under Truth in Lending (TILA) extended three-year right to rescind?
We have a website dedicated to truth in lending rescission rights (TILA) which can be found here: http://www.rescindmyloan.net/a-general-overview-of-truth-in-lending-law-and-the-right-to-rescind/
These are some of the loss mitigation and foreclosure defense questions/issues we deal with on a daily basis. If you are facing any of the above legal issues, you might want to think about retaining a real estate and foreclosure lawyer to protect your interests. The banks, lenders, and loan servicers have lawyers on their side and they are probably hoping you don’t take this step on your end. In California, the lenders backed SB94, a law that prevents any lawyer or broker from accepting any advance fees for loan modifications which has literally allowed lenders to force California homeowners to be unrepresented in the loan modification context. This is the way they wanted it done, and the California legislature went along with it. In Arizona, you may still hire a lawyer to assist you, at least for the time being.
For more information about hiring a Phoenix Short Sale Lawyer, please visit our website at www.PhoenixShortSaleLawyer.com
KEYWORDS: PHOENIX SHORT SALE LAWYER / SCOTTSDALE SHORT SALE LAWYER / ARIZONA SHORT SALE LAWYER / SHORT SALE ATTORNEY / PHOENIX SHORT SALE ATTORNEY / SCOTTSDALE SHORT SALE ATTORNEY / ARIZONA SHORT SALE ATTORNEY / ARIZONA FORECLOSURE LAWYER / PHOENIX REAL ESTATE LAWYER / SCOTTSDALE FORECLOSURE ATTORNEY / PHOENIX BANKRUPTCY LAWYER / PHOENIX BK LAWYER / REAL ESTATE LOSS MITIGATION / DEED-IN-LIEU OF FORECLOSURE / ARIZONA INJUNCTION / FILING LIS PENDENS / PHOENIX LOAN MODIFICATION / SCOTTSDALE LOAN MODIFICATION / ARIZONA LOAN MODIFICATION / TILA RESCISSION / RESPA QUALIFIED WRITTEN REQUEST
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FORECLOSURE ISSUES: CAN A LENDER PURSUE A DEFICIENCY JUDGMENT IN ARIZONA?
GENERAL LEGAL PRINCIPLES BY STEVE VONDRAN ATTORNEY. Mr. Vondran is licensed to practice law in California and Arizona and maintains an office in Newport Beach, California and Phoenix, Arizona. He currently practices in the area of Real Estate, Foreclosure Defense, and Bankruptcy. He can be reached at (877) 276-5084.
The following is general legal information only and is not to be relied upon as legal advice or a substitution for legal advice. As law frequently change, and as new cases interpret the law, the following may be inaccurate, out-of-date or missing law pertinent to you case. Therefore, do not rely on the following and seek the assistance of a qualified real estate and foreclosure attorney to assist you in your case. Where tax issues are involved, you should also seek the advice of a tax attorney or CPA.
- WHAT IS A “DEFICIENCY JUDGMENT” IN ARIZONA?
Let’s say you have a first mortgage for $500,000 and your house is worth $350,000. If the lender/loan servicer refuses to provide a meaningful loan modification, or any modification for that matter, and if they will not permit a short sale (yes, lenders and loan servicers can and do frequently deny both), then your house gets scheduled for a foreclosure sale.
Most properties in California and Arizona are sold via a Private Trustee Sale (partially so they can get away with whatever they want), but let’s say the private sale only generates a bidder who bids $350,000 and let’s say this represents fair market value and the lender decides to sell the property for this amount.
Following the sale, the lender will recoup its $350,000, but will obviously be short $150,000 from the $500,000 it was originally owed. For most lenders, they want the homeowner to pay the difference (the $150,000), and if the lender persists they can seek to file a lawsuit seeking a “deficiency judgment” against you, as homeowner.
Obviously the only thing worse than being foreclosed on is having the lender try to come back after you for the $150,000 they feel they are owed pursuant to the terms of the note you signed.
As a homeowner, this can keep you up at night wondering “can they come back at me?” This is a question we get all the time as real estate foreclosure defense and loan modification counsel.
The routine answer we give is “the lenders can try anything they want and don’t be surprised to see them pull anything.” Now, we also tell them that in Arizona, if you have a “purchase money” loan there is a good chance the lender can get NOTHING from you following a foreclosure sale that does not net the full value of the outstanding loan balance owed. That is good news for you. But then, the big question becomes, what is a purchase money loan? And what if I have a first and second mortgage? Let’s take a look at these issues.
- WHAT TYPES OF ARZIONA PROPERTY ARE PROTECTED FROM DEFICIENCY JUDGMENTS? A REVIEW OF A FEW OF THE ARIZONA CASE LAW DEALING WITH THE TOPIC OF DEFICIENCY JUDGMENT.
As we discussed above, purchase money loans in Arizona are protected against deficiency judgments. But does this cover residential AND investment properties or one or the other?
Arizona protects people who purchase property. If you had to worry about losing both your down payment, and facing a deficiency judgment if the loan goes bad, many potential Arizona home buyers may choose to rent instead. This would prohibit new developments.
Under the Arizona Revised Statutes (A.R.S. 33-729(A)), when a mortgage is given to secure the payment of the balance of the purchase price, or to secure a loan to pay all or part of the purchase price of a residential property TWO AND ONE HALF ACRES OR LESS that is limited to and utilized for either a SINGLE ONE FAMILY OR SINGLE TWO FAMILY RESIDENCE the mortgagee cannot collect a deficiency judgment out of any of the other assets of the homeowner (the lien of the property shall not extend to any other property of the judgment debtor).
Here is what this section says:
| 33-729. Purchase money mortgage; limitation on liability
A. Except as provided in subsection B, if a mortgage is given to secure the payment of the balance of the purchase price, or to secure a loan to pay all or part of the purchase price, of a parcel of real property of two and one-half acres or less which is limited to and utilized for either a single one-family or single two-family dwelling, the lien of judgment in an action to foreclose such mortgage shall not extend to any other property of the judgment debtor, nor may general execution be issued against the judgment debtor to enforce such judgment, and if the proceeds of the mortgaged real property sold under special execution are insufficient to satisfy the judgment, the judgment may not otherwise be satisfied out of other property of the judgment debtor, notwithstanding any agreement to the contrary. B. The balance due on a mortgage foreclosure judgment after sale of the mortgaged property shall constitute a lien against other property of the judgment debtor, general execution may be issued thereon, and the judgment may be otherwise satisfied out of other property of the judgment debtor, if the court determines, after sale upon special execution and upon written application and such notice to the judgment debtor as the court may require, that the sale price was less than the amount of the judgment because of diminution in the value of such real property while such property was in the ownership, possession, or control of the judgment debtor because of voluntary waste committed or permitted by the judgment debtor, not to exceed the amount of diminution in value as determined by such court. |
Note: this section says only the “judgment debtor” is not liable, but it does not mention any co-guarantors of the loan. Therefore, it is quite likely a guarantor on the loan could still be liable for a deficiency judgment.
What about investment properties? The statute above says there is no deficiency judgments if the property is a “single one family” or “single two family” but it says nothing about whether this property must be owner-occupied. In the case of Northern Arizona Properties v. Pinetop Properties Group, 151 Ariz. 9, P.2d 501 (App. 1986) the court held that an “investment condominium” was protected against a default judgment even though the unit was not utilized as a dwelling by borrower. The Court held that the investment condo unit was nevertheless a “shelter where people live.” This case is good for owners of residential investment property in Arizona that is deemed purchase money as there would be no deficiency judgment under these circumstances.
What about a “Blanket” Deed of Trust that secures the repayment of six individual condo units and their 6 separate promissory notes? The Court addressed this situation in PNL Credit v. Southwest Pacfiic Investments, Inc. 179 Ariz. 259, 877 P.2d 832 (App. 1994). In this case, the lender held ONE (1) blanket deed of trust over 6 individual condo units. The owner wanted to be deficiency judgment free and argued that the Arizona deficiency judgment statute protected him from personal liability for the deficiency balance. The Court disagreed saying that the plain meaning of the statute was to protect “single one family” and “single two family” dwellings, and that in this case, the owner was trying to protect “multiple single family dwellings” (which was not protected given the plain meaning of the statute. Had their been a deed of trust for each of the individual condo units, each would have been protected, but there was only one blanket deed of trust covering all 6 properties and this did not qualify for deficiency judgment protection.
Here is some language from the case for your reading enjoyment:
Applicability of the Arizona Anti-Deficiency Statute:
PNL argues that the trust property encumbered by its deed of trust is not protected under the anti-deficiency statute because it consists of four condominium units and is thus not limited to a single one-family or a single two-family dwelling. We agree. That statute reads in relevant part:
“If trust property of two and one-half acres or less which is limited to and utilized for either a single one-family or a single two-family dwelling is sold pursuant to the trustee’s power of sale, no action may be maintained to recover any difference between the amount obtained by sale and the amount of the indebtedness and any interest, costs and expenses.”
PNL’s loan to SW Pacific’s predecessor was secured by a single blanket deed of trust originally encumbering six separate condominium units. At the time of the trustee’s sale, four units remained encumbered by the deed of trust. Although the loan was evidenced by multiple promissory notes, A.R.S. section 33-814(G) focuses on the nature of the “trust property,” not the number of underlying obligations. Courts generally must follow a statute’s language when that language is plain and unambiguous. Mid Kansas, 167 Ariz. at 128, 804 P.2d at 1316.Thus, the anti-deficiency statute protects “trust property” that is “limited to and utilized” as “ single one-family or single two-family dwellings.”
In contrast to this case, in Mid Kansas the lender sought to waive its security and sue on four separate construction loans, each secured by four separate deeds of trust, and each encumbering a single substantially completed home. 167 Ariz. at 124-25, 804 P.2d at 1312-13. The lender had previously conducted a trustee’s sale on a second-position blanket deed of trust on the four properties. The borrower in Mid Kansas argued that the anti-deficiency statute prevented the lender from suing on the first-position notes after having non-judicially foreclosed the second-position blanket deed of trust. The supreme court held that the anti-deficiency statute did not apply because the uncompleted, unoccupied homes did not constitute “dwellings.” Because the court concluded that the borrower was not protected by the anti-deficiency statute, the court did not consider the issue of whether trust property consisting of multiple single-family homes falls within the protection of the anti-deficiency statute. In the court of appeals’ Mid Kansas opinion, however, this court did reject the lender’s argument that the four lots combined were not “trust property of two and one-half acres or less,” stating that, if the four lots had been owned by four individual homeowners as opposed to the one developer, this court would construe the anti-deficiency statute broadly enough to protect the homeowners from deficiency judgments. 163 Ariz. at 239, 787 P.2d at 138.
The Orians claim that there were in effect four separate but concurrent trustee’s sales. We do not agree. There was but one deed of trust and, consequently, one trustee’s sale. The Orians also claim that the trial court made specific findings that the four condominium units involved were four single family dwelling units. However, PNL does not challenge the finding that the condominium units constitute “dwellings,” which is what the trial court focused on. As PNL correctly argues, the anti-deficiency statute requires the trust property to not only be utilized as a dwelling, but also be limited to a single one-family or a single two-family dwelling. The trust property here consisted of four single-family condominium units. Interpreting the statute to protect trust property consisting of multiple single-family dwellingswould violate the language of the statute.
The Orians further argue that PNL is attempting to exclude commercial developers from the protection of the anti-deficiency statute. The supreme court in Mid Kansas held that the anti-deficiency statute’s protection extends to commercial owners of qualifying residential property. 167 Ariz. at 128, 804 P.2d at 1316. PNL’s argument correctly focuses on the type of property protected, not the type of borrower protected. The trust property here simply does not qualify as protected property.
What about mortgaging one home (a borrowers primary residence) to purchase another (second home in Oregon)? Many people have purchased second homes in the housing boom, especially given the availability of stated income loans, ARM loans, option arm loans with teaser rates, etc.. The case of Cely v. Deconcini, McDonald, Brammer, Yetwin, and Lacy, P.C., 166 Ariz. 500, 803 P.2d 911 (App. 1997) answered this question holding that the borrower who used their primary residence as collateral for a second home was not protected by the Arizona anti-deficiency statute. Here are a few golden nuggets from that case:
“In Baker v. Gardner, our supreme court held that the holder of a note and security device may not waive the security and sue on the note to hold the maker personally liable for the unpaid balance when the security falls within the limited class of purchase money mortgages and deeds of trust described in Arizona’s anti-deficiency statutes. We hold in this case that when one home is mortgaged to secure the purchase of a second home, the mortgage is not a purchase money security interest and the mortgage anti-deficiency statute does not apply.”
“Arizona’s mortgage anti-deficiency statute, A.R.S. § 33-729(A), restricts the remedy upon default of creditors with purchase money mortgages. The statute provides that a creditor may not foreclose on a purchase money mortgage and then pursue the debtor for a deficiency. Further, as the Arizona Supreme Court held in Baker v. Gardner, the creditor may not waive the mortgage altogether and sue the debtor personally on the note. 160 Ariz. at 104, 770 P.2d at 772.
A.R.S. § 33-729(A) provides:
Purchase money mortgage; limitation on liability:
If a mortgage is given to secure the payment of the balance of the purchase price, or to secure a loan to pay all or part of the purchase price, of a parcel of real property of two and one-half acres or less which is limited to and utilized for either a single one-family or single two-family dwelling, the lien of judgment in an action to foreclose such mortgage shall not extend to any other property of the judgment debtor, nor may general execution be issued against the judgment debtor to enforce such judgment, and if the proceeds of the mortgaged property sold under special execution are insufficient to satisfy the judgment, the judgment may not otherwise be satisfied out of other property of the judgment debtor, notwithstanding any agreement to the contrary.”
THE GROPP MORTGAGE WAS NOT ORIGINALLY A PURCHASE MONEY MORTGAGE
Our supreme court has relied on the similarity between Arizona’s anti-deficiency statutes and those in California to interpret our statutes. Baker v. Gardner, 160 Ariz. at 102, 770 P.2d at 770. California case law indicates that in the standard purchase money transaction, the seller retains an interest in the land sold to secure payment of part of the purchase price. Roseleaf Corp. v. Chierighino, 59 Cal.2d 35, 41, 378 P.2d 97, 100 (1963). California’s anti-deficiency statute, Cal.Civ.Proc.Code § 580b (West 1976), provides in pertinent part as follows:
§ 580b. [When deficiency judgment forbidden: Exceptions]
No deficiency judgment shall lie in any event after any sale of real property for failure of the purchaser to complete his contract of sale, or under a deed of trust or mortgage, given to the vendor to secure payment of the balance of the purchase price of real property….
Gropp did not retain an interest in the Oregon home to secure the Celys’ note; he took an interest in the Tucson home, an asset unrelated to the sale. Thus, if Arizona law should follow California in this respect, the mortgage was not a purchase money interest when the Celys gave it to Gropp.
The defendants argue, however, that the California cases discussed in Baker v. Gardner are inapposite because the origin and purposes of the California statute differ from the Arizona anti-deficiency statute. We disagree. The Baker court stated that it read the Arizona and California statutes as similar in purpose. 160 Ariz. at 102-03, 770 P.2d at 771. The California Supreme Court has explained the application and purposes of that state’s anti-deficiency statute as follows:
Section 580b was apparently drafted in contemplation of the standard purchase money mortgage transaction, in which the vendor of real property retains an interest in the land sold to secure payment of part of the purchase price. Variations on the standard are subject to section 580b only if they come within the purpose of that section.
Section 580b places the risk of inadequate security on the purchase money mortgagee. A vendor is thus discouraged from overvaluing the security. Precarious land promotion schemes are discouraged, for the security value of the land gives purchasers a clue as to its true market value. If inadequacy of the security results, not from overvaluing, but from a decline in property values during a general or local depression, section 580b prevents the aggravation of the downturn that would result if defaulting purchasers were burdened with large personal liability. Section 580b thus serves as a stabilizing factor in land sales. Roseleaf Corp. v. Chierighino, 59 Cal.2d at 41-42, 378 P.2d at 100-01 (citations omitted) (emphasis added).
In Roseleaf, buyers purchased a hotel from the plaintiff and financed the transaction with four notes, three of which were secured by a second deed of trust on property other than the hotel. 59 Cal.2d at 38, 378 P.2d at 98. The first note was secured by a purchase money trust deed and was not involved in the case. Id. The court, analyzing the purposes of California’s anti-deficiency statutes, determined that the second trust deed was not a purchase money interest and that the plaintiff could sue the buyers personally on all three notes. The court stated:
To apply section 580b here would mean that the [buyers] would acquire the hotel at less than the agreed price. Furthermore, if there is any merit in the theory that “the vendor knows the value of his security and assumes the risk of its inadequacy,” that theory does not apply here. There is no reason to assume that [seller] had any greater knowledge of the value of the [buyers'] land than did the [buyers].
59 Cal.2d at 43, 378 P.2d at 101.
The purposes served by Arizona’s mortgage anti-deficiency statute are identical to those served by California’s statute and are equally inapplicable to the transaction between Gropp and the Celys. When the Celys mortgaged their Tucson home, they were in a better position to know its value than Gropp. The anti-deficiency statute could not ensure that Gropp priced the Oregon home appropriately because the mortgage was not taken on that home. Nor did the Celys risk losing their residential purchase in Oregon through foreclosure while remaining liable for its purchase price. See Roseleaf, 59 Cal.2d at 41-43, 378 P.2d at 101. The Tucson home served in the Oregon transaction as non-purchase money collateral-no different conceptually than an art work or an heirloom or the family jewels. We conclude that the anti-deficiency statutes do not apply.
We conclude on the basis of these authorities that a purchase money mortgage is one that encumbers the property being sold. We accordingly conclude that the Celys did not give Gropp a purchase money interest when they bought Gropp’s Oregon home.”
What about a consolidated loan that originally consisted of $240,000 in purchase money funds (but later also adding $75,000 in non-purchase money funds) both of which were later the subject of a loan modification agreement? Can this loan be considered protected purchase money not subject to a deficiency judgment? The case of Bank One (Arizona) v. Beauvais, 188 Ariz. 245, 934 P.2d 809 (App. 1997) addressed this question. In this case the Court held that since most of the funds were purchase money funds (the $75,000 was for the purpose of exercising stock options) that the consolidated loan would be treated as purchase money and protected from a deficiency judgment. The property was a qualifying property as discussed above. The Court held that the loan workout was NOT A NEW LOAN as the bank argued, but that the workout note retained its characteristic as a purchase money loan. You want a fresh snippet? I though you would never ask, here you go:
“In summary, we hold that regardless of whether the workout note was an extension, renewal, or refinancing of the 1989 consolidated loan, it retained its character as a purchase-money note. See Lucky Invs., Inc. v. Adams, 183 Cal.App.2d 462, 7 Cal. Rptr. 57 (1960). (Cancellation and replacement with new notes, secured by the same property, transfers purchase-money status to new notes.). Accordingly, the Bank is prohibited from waiving the security under the deed of trust and suing on the note – Per Baker v. Gardner. We affirm the trial court’s dismissal of the Bank’s complaint.”
What about the Arizona borrower who has both a first and second mortgage? It appears if both the first and second mortgage were taken out at the same time, and the money was borrowed to secure all or part of the purchase price of a single one family, or single two family dwelling on two and a half acres or less, that both the first and second mortgage would be protected from a deficiency judgment. Let’s take a look at the cases.
- Southwest Sav. and Loan Assn. v. Ludi, 122 Ariz. 226, 594 P.2d (1979). In this case the lender held a security interest on a purchase money first mortgage and a non-purchase money second mortgage. The borrower Ludi defaulted on both. The lender foreclosed on the purchase money first mortgage, and tried to waive the security and sue on the note (like a breach of contract action) on the second mortgage. In this case, the Arizona Supreme Court allowed this action holding that there was nothing wrong with suing on the non-purchase money second (and waiving the security). The Court likened this to an action on the second to enforce the debt, which was permitted. The key here is the 2nd mortgage was NOT PURCHASE MONEY!! The court held that the lender was not prohibited from pursuing for foreclosure on one note and suing on the debt on the second mortgage all in the same action.(2) Wells Fargo Credit Corp. v. Tolliver, 183 Ariz. 343, 903 P.2d 1101 (App. 1995). Wells Fargo was a junior lien holder that was permitted to sue on the note. The property in question was not protected by the Arizona anti-deficiency statutes. The Court held:
“The statute (Arizona anti-deficiency statute) does not apply because Wells Fargo’s action is on the note, not one for a deficiency. This Court has previously held that a junior lienholder who did not institute trustee’s sale proceedings may waive its security and sue directly on its note, provided that it is not precluded by the anti-deficiency statutes. Again, the anti-deficiency statutes protect purchase money mortgages. This holding is consistent with Baker v. Gardner.
(3) Nydam v. Crawford, 181 Ariz. 101, 887 P.2d 631 (App. 1994) – This case involved a second mortgagee (junior lien holder) trying to sue on the note following a foreclosure sale by the first mortgage holder. The Court declined to allow the sue on the note theory by the second mortgage lender because the second mortgage was also purchase money and protected in Arizona against a deficiency judgment or action on the note. Here the court held:
“Baker is nearly, but not quite, on all fours with this case. In Baker, defendants’ purchase was financed in part by a loan from ICA Mortgage Corporation (“ICA”), and the sellers took a note for the remainder. ICA had a first-position deed of trust, with the sellers’ deed of trust in second position. When the defendants defaulted on both notes, ICA noticed a trustee’s sale. Before the trustee’s sale took place, the second-position deed-holders filed suit on their promissory note. The trial court ruled the action prohibited by the anti-deficiency statute (then numbered A.R.S. § 33-814(F) and (E)), and our supreme court affirmed. The court concluded that the Legislature intended to take away from creditors the option of suing upon the note in [the specified type of] transaction. This construction of the statute not only prevents its evasion, but also gives effect to the Legislature’s intent. Baker, 160 Ariz. at 104, 770 P.2d at 772 (quoting Ross Realty Co. v. First Citizens Bank & Trust, 296 N.C. 366, 250 S.E.2d 271, 275 (1979)).”
“Like the Bakers, plaintiff is a second-position deed-holder, attempting to collect on her note in the face of the first-position deedholder’s trustee’s sale. Plaintiff attempts to distinguish Baker, however, because she filed her lawsuit after the trustee’s sale, whereas the Bakers sued the Gardners before the trustee’s sale. Plaintiff argues that, unlike the Bakers, she did not commit the forbidden act of waiving her security and suing on her note; instead, because the trustee’s sale extinguished her security, she had no security to waive. She adds that she did not seek a deficiency judgment because, in the absence of security, there could be no deficiency.”
“Plaintiff’s argument is defeated by the plain wording of the anti-deficiency statute. Although that statute covers cases under A.R.S. § 33-722 in which one has elected to waive security and sue directly on the debt, it is not restricted to such cases. Nor, as Baker illustrates, is it restricted to cases in which the person seeking the deficiency also conducted the trustee’s sale. Section 33-814(G) provides more comprehensively that no deficiency judgment may be obtained if qualifying “trust property … is sold pursuant to the trustee’s power of sale.” Because this qualifying property was sold pursuant to the trustee’s power of sale, it falls within the express wording of the statute. Section 33-722 provides: “If separate actions are brought on the debt and to foreclose the mortgage given to secure it, the plaintiff shall elect which to prosecute and the other shall be dismissed.”
“Plaintiff’s argument is also defeated by the reasoning of Baker. Our supreme court there defined the purpose of the anti-deficiency statute as protecting homeowners from “the financial disaster of losing their homes to foreclosure plus all their other nonexempt property on execution of a judgment for the balance of the purchase price.” Baker, 160 Ariz. at 101, 770 P.2d at 769. The Baker court expressly contemplated the tandem impact of a first-position deed-holder’s trustee’s sale followed by a second-position deed-holder’s suit on a second note:
“The Gardners presumably lost whatever equity they had in the house on the non-judicial sale noticed by ICA under the first trust deed. Under the court of appeals’ opinion, the Gardners would have faced sale of their other assets on execution of the judgment on the note secured by the Bakers’ second deed of trust. In our view, the legislature would not have protected homeowners from deficiency judgments but still permitted the holder of a mortgage or deed of trust to obtain essentially the same result by waiving the security and bringing action on the note. This statutory construction seems inconsistent with the patent legislative objective.
There are many other scenarios that can be analyzed under the Arizona Anti-Deficiency Statutes. I do not have time to review them all. Each foreclosure case and attempt to collect on the debt is fact-specific, but the foregoing should give you a flavor of Arizona law.
- CONCLUSION
If you are an Arizona homeowner facing foreclosure, you need to think about whether your first mortgage and second mortgage (if you have one) will be treated as “purchase money” loans and protected from deficiency judgments under Baker v. Gardner.If your loans are purchase money, at least in my opinion, you are in a better position to negotiate a loan modification, deed-in-lieu-of-foreclosure or short sale. Why? Because the lender(s) can take your lousy upside-down property and do what they want with it, but they cannot come after you for the amount of the loan they do not recover following a foreclosure sale. This is one of the rare cases in foreclosure defense when something may be considered good for you and bad for them. Keep in mind, Baker v. Gardner does not prevent a non-purchase money junior lien holder from “waiving the security” and “suing you on the note” where the Arizona anti-deficiency statute does not apply. Another issue that arises often in Arizona is whether construction loans are protected. If you are unsure of your legal standing or the liability you may face, contact our office to discuss your situation. The price you pay for a consultation and some legal research consutling the recent case law could make a huge difference to your pocket-book and future plans.
More information about Arizona Deficiency judgments can be found at www.ArizonaDeficiencyJudgment.com
Understanding the Short Sale Process and Deficiency Judgments – A General Overview
By Real Estate Attorney Steve Vondran. Our firm currently handles Real Estate, Foreclosure, and Chapter 7 Bankruptcy cases in California and Greater Phoenix Arizona. We can be reached at (877) 276-5084 or steve@vondranlaw.com
- Sign a listing agreement between the real estate agent and the homeowner. Typically the listing agreement will be for 6 months, and will list the commission as 6%. A 60 day “broker protection period” is also a good idea to protect the short-sales agent.
- The Property then needs to be listed in the local MLS. Once the listing agreement is signed, the property pictures get taken and the listing goes in the local MLS. It should be clearly disclosed that the sale is a short sale is subject to lender / lien-holder approval. The 6% commission might be stated to be split 50/50 – between buyers agent and seller’s agent – if the short sale deal is approved. In some circumstances, it may be possible to act as a “dual agent” in which case it might be wise to execute a dual agency amendment to escrow.
SHORT SALE LISTING TIP: It is probably a good idea to list the property 5-10% below current “comps” (comparative sales within last 6 months) in order to try to generate as many qualified offers as possible. Because there is usually a “sale date” (foreclosure sale date) pending when a short sale is being pursued, it is wise to have as many offers as possible that the lender/lien holders can consider if the first deal falls through. The lenders will often set a foreclosure sale date just a few days past the scheduled date for close of escrow after an offer is accepted, and if the accepted deal falls through, your Client will be staring a foreclosure sale date right in the face, and in that event you will want to be able to submit other qualified offers immediately, in the hopes of further extending the sale date.
- Client needs to start thinking about getting financials together, preparing a hardship letter /affidavit and seeing if there are any legal financial maneuvers that may make the loss mitigation package look more attractive to the lender and/or may help facilitate the short sale. For example, this may be a good time to convert Trust Fund money or other cash assets into an IRA account, 401K, etc., (as these would not normally have to be disclosed on a lenders short sale or loss mitigation package). Most lenders will make you disclose all of our bank account, savings, money market, CD’s, stocks and bonds, etc., under penalty of perjury. Some items such as alimony, child support, separation maintenance, value of life insurance, retirement plans, etc., DO NOT NEED TO BE DISCLOSED. If you disclose 100,000k in assets, the lender may not be so willing to do a short sale (especially a second mortgage holder who may be facing the prospects of getting very little money for their lien), and instead, they may want you to sign a deficiency agreement as a condition to permitting a short sale. At this stage (before an offer comes in) it is a good time to examine the lenders loss mitigation application and see exactly what type of financial information they will be requiring you to disclose as part of the short sales process. Obtain all of the requested financial documentation, prepare the hardship letter/affidavit, and be ready to submit these materials when you receive an offer.
- Once your short sales agent obtains a short-sale offer, you will need to prepare your short sale / loss mitigation package to the bank. Basically, you will want to include, at a minimum, the following items:
- Copy of the Listing Agreement between homeowner and short sale agent disclosing the commission agreement;
- Homeowner financials, hardship letter, and loss mitigation package required by the lender/lien holder;
- Copy of the offer (purchase and sale agreement), typical is to put that the escrow should close 45 days after acceptance by the bank. Also include the short sale addendum;
- Copy of Estimated HUD;
- Broker Cover letter / Opinion of Value / Comps etc.
- If Client has a refinance transaction within three years, you may also want to include a Truth in Lending (TILA) audit summary if a “material” truth in lending violation was found. This especially if the borrower has some ability to “tender” (see a foreclosure lawyer to discuss this point). If your Client has an ability to rescind their mortgage under TILA, this may provide additional motivation for the lender to accept the loan modification over pursuing a foreclosure sale.
- There may be other documents to submit depending on the borrowers situation
SHORT SALE TIP: Make this submission as neat, complete, and comprehensive as possible. Time is of the essence and you do not want to have to spend all your time re-submitting missing or incomplete documents.
- Once the lender receives your short sale submission package, usually a processor and/or negotiator will be assigned to the file. Your short sales agent will work with the representatives of the lender to get them what they need, and generally to try to get the deal accepted.
- If the lender is inclined to accept the deal, the lender must accept in WRITING and the escrow period is then opened (as we mentioned, usually a 45 day escrow will allow time for inspections, appraisal, title search, seller disclosures, etc.).
- At this point, it is a typical real estate transaction for the most part in that the financing must be arranged, inspections, appraisal, etc. and DONT FORGET a check with the Homeowner’s Association (“HOA”) should be made to ascertain whether the HOA is solvent or in litigation (if they are not solvent due to homeowners not paying their dues, or facing litigation over some other legal issue, then it may be impossible for the proposed short sale purchaser to obtain financing – mandating that only a full cash buyer will be able to close a short sale on the property). This is an important factor to look into at the early stages of a short sale. If you need an all cash buyer you might as well figure this out as soon as possible.
- If the offer is accepted in writing, escrow opened, no HOA issues, and all other parts of the sales process are performed, and all lien holders agree to the short sale then the deal will close and commissions will be paid per the listing agreement and any dual agency addendums.
NOTE: Where agreeing to a short sale will result in a lender or lien holder in receiving less than they are owed (for example you owe $500,000 to Bank of America and the short sale offer is only for $250,000) Bank of America may try to get you to sign a deficiency agreement whereby you agree to pay them the $250,000 deficiency amount that you owed them under the terms of your note. This is where most people will want to consult with both a real estate lawyer to consult on the law of deficiency judgments, and a tax advisor or CPA to address issues of loan debt forgiveness being treated as income (thus creating a taxable event). These are very serious and important issues that should be reviewed in every short sale setting.
NOTE: What some short sales agents might do is to agree to contribute a portion of their commission for the short sale to pay a portion of a borrowers agreed deficiency if such is required and the homeowner agrees to sign such. This should be clearly disclosed in writing on the HUD closing statement.
As an example, in Arizona, if you have a “purchase money mortgage,” (topic of another blog posting) it is quite possible that you are NOT LIABLE FOR ANY DEFICIENCY LOAN BALANCE AND THE LENDER COULD NEVER COLLECT SUCH EVEN IF IT WANTED TO. In these circumstances, the homeowner should think carefully before signing any agreement to pay any portion of an alleged deficiency balance. Again, you should consider contacting a real estate or foreclosure lawyer to discuss this issue, and a separate advisor to discuss any tax ramifications of a short sale. PROTECT YOURSELVES – THE LENDERS ARE USING LAWYERS YOU MIGHT BE WELL ADVISED TO GET ONE FOR YOURSELF.
Another question we get quite frequently is what If I have two mortgages? Both a first mortgage and a second mortgage. For example, two loans with EMC / Chase Mortgage? In these cases the second lien holder normally wants to get cashed-out of its lien, and in many short sales the first mortgage will see if they can pay the holder of the second mortgage a certain amount of money (ex. $5,000) to release their lien and allow the short sale to proceed. Again, the second lien holder is concerned with getting something from the borrower for the second mortgage note that was signed. In these cases, depending on the assets and future income potential of the applicant, the second mortgage holder may want a deficiency agreement signed in order to proceed with the short sale and release its lien. This is again a good time to see a foreclosure or short sale lawyer.
Finally, it may be good to know whether your loan has any potential grounds for filing a lawsuit. This is where the forensic loan audit by a qualified real estate lawyer may help you in your short sale negotiation. If a lender was the original lender of your loan, and held the loan in its portfolio, there is a possible chance that explaining the lenders potential liability to them following an audit may compel them to accept a short sale they may not otherwise be interested in accepting. The situation becomes a bit more difficult where you are dealing with securitized loans and lenders claiming to be holders in due course. But again, these issues may be worth looking at to try to ensure your short sale is accepted. As a short sale will normally look better on your credit report than a foreclosure, there is incentive to look into these issues.
NOTE REGARDING: Home Affordable Foreclosure Alternatives Program (HAFA): make sure to check out our Blog on HAFA to see some of the recently enacted rules designed to make short sales more attractive to lenders and loan servicers. The process is different than that explained above. You can see the HAFA process, timelines, and forms at this blog post:
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1. Loan Modifications / Loan Workouts (World Savings and Wachovia Loans)
2. Commercial Lease Modifications
3. DRE audits, hearings and investigations
4. Real Estate Broker admissions cases
5. Foreclosure Defense
6. Mortgage Law & Predatory Law
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KEYWORDS: PHOENIX SHORT SALE / SCOTTSDALE SHORT SALE / ARIZONA SHORT SALE / GOODYEAR SHORT SALE / BUCKEYE SHORT SALE / FOUNTAIN HILLS SHORT SALE / PEORIA SHORT SALE / SHORT SALE LAWYER / DEFICIENCY JUDGMENT / HAFA SHORT SALE PROGRAM / PURCHASE MONEY LOANS / PHOENIX FORECLOSURE LAWYER / SCOTTSDALE LOAN MODIFICATION / LOSS MITIGATION / DEED-IN-LIEU OF FORECLOSURE.
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HELPFUL FORECLOSURE DEFENSE LINKS:
1. SUBMIT YOUR FORECLOSURE / LOAN SCENARIO: WWW.LOANMODSOLUTIONS.NET
2. SUBMIT YOUR LOAN MODIFICATION SCAM SCENARIO: WWW.LOANMODIFICATIONRIPOFF.NET
3. LITIGATING OPTION ARM LOANS WWW.OPTIONARMLAWYER.COM
4. CALIFORNIA FORECLOSURE DEFENSE ATTORNEY STEVE VONDRAN WEBSITE: WWW.VONDRANLEGAL.COM
5. ARIZONA FORECLOSURE DEFENSE ATTORNEY STEVE VONDRAN WEBSITE: WWW.VONDRANLEGAL.COM
6. STEVE VONDRAN REAL ESTATE WEBSITE WWW.VONDRANLAW.COM
7. INFORMATION ON TRIAL PLAN FRAUD: WWW.TRIALPLANFRAUD.COM
8. FORECLOSURE DEFENSE RADIO SHOW: WWW.LOANMODRADIO.COM
9. INFORMATION ON TRUTH IN LENDING LOAN RESCISSION: WWW.RESCINDMYLOAN.NET
10. INFORMATION ON PRODUCE THE NOTE: WWW.PRODUCETHENOTEATTRORNEY.COM
NOTE: WE CONSIDER TAKING SOME CASES ON A CONTINGENCY FEE BASIS. SEE OUR PROFILE AT THE WWW.CONTINGENCYCASE.COM WEBSITE WHICH IS A WEBSITE DIRECTORY FOR CONTINGENCY CASE LAWYERS ACROSS THE UNITED STATES.
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NOTICE:
The foregoing information is general legal information only and shall not be relied upon as legal advice, or a substitution for legal advice. If you have specific legal questions about your foreclosure case, short sale, or loan modification case you should seek out the advice of a real estate attorney. In addition, the information posted above may not be 100% complete, accurate or up-to-date. The Law Offices of Steven C. Vondran, P.C. is licensed to practice law in the state of Arizona and California and only seeks to solicit and serve Clients in these two states. Steve Vondran, Esq. is a licensed attorney and real estate broker in California and Arizona. He can be reached by email at steve@vondranlaw.com or toll free (877) 276-5084. This is an advertisement and communication pursuant to State Bar Rules. Please do not send us private or confidential information through any of our above-listed websites. Sending us an email does not create an attorney-client relationship (only signing a legal retainer will do this).
FORECLOSURE DEFENSE BASICS: UNDERSTANDING THE HOME AFFORDABLE FORECLOSURE ALTERNATIVES PROGRAM (HAFA), SHORT SALES, DEED IN LIEU OF FORECLOSURE AND DEFICIENCY JUDGMENTS
So many homeowners are fighting for reasonable loan modifications that will save their homes from foreclosure. Other people are seeking refuge in a bankruptcy Court (Chapter 13 Bankruptcy, and Chapter 7 Bankruptcy). Still others are seeking a Deed-lieu-of-foreclosure strategy, while other homeowners who are completely upside down on their properties are either walking away, or seeking to short sale their property. This is the current state of affairs in the United States, and banks (who have been generously bailed out) are picking and choosing who gets what. It seems like if you want the bank to perform any loss mitigation for Arizona of California homeowners, you have to basically incentivize them to do something (e. HAMP – Making Home Affordable).
We have previously published an article on the Lender/loan servicers HAMP report card. The results are not overwhelming. Click here to view that blog post:http://www.loanmodradio.com/2010/03/hamp-trial-plan-fraud-or-just-off-to-a-slow-start-hamp-lender-report-reveals-some-insights/
So now comes along yet another incentive program that may help some homeowners obtain short sale relief and deed-in-lieu-of-foreclosure relief (and of course stuff more cash into the pockets of the bankers and loan servicers). This new loss mitigation program is called HAFA – Home Affordable Foreclosure Alternatives Program. Pretty cool name! HAFA supplements HAMP. Servicers implementing HAMP must also comply with the HAFA directives and consider people for short sales and deed in lieu of foreclosure.
What is a short sale? A short sale is a transaction whereby a lender agrees to accept less as a payoff than is owed by the homeowner/borrower by allowing the property securing the debt to be sold for less than the lender is owed. In some cases the lender will forgive the outstanding debt owed and in other cases the lender may want an agreement from the borrower to pay the deficient loan balance.
What is a deed-in-lieu? This is basically where a homeowner/borrower hands over the deed to the property (with marketable title) to the lender who agrees to accept the deed, thereby eliminating the need to pursue a foreclosure sale. Sometimes a lender will require short sale efforts before they would accept the deed in lieu of foreclosure.
Why would a lender agree to a short sale or deed in lieu of foreclosure? It costs less for a lender to do a short sale or accept a deed in lieu than it does to pursue a foreclosure. So where it makes financial sense, the lenders will entertain these loss mitigation measures.
Ok, so let’s take a look at the major points under HAFA:
(1) Program is for HAMP-eligible borrowers who were (a) nevertheless denied under HAMP, (b) qualified but were not given a trial plan, (c) could not make 2 or more trial plan payments, or (d) completed trial plan but no permanent modification was given. To see what types of borrowers qualify for HAMP see this link: http://www.treas.gov/press/releases/reports/guidelines_summary.pdf(generally must be borrowers principle residence, first mortgage loan must not exceed 729,500, and payment must be in excess of 31% of borrowers gross monthly income).
(2) Program takes effect April 5, 2010 and “sunsets” December 31, 2012.
(3) The hardship letter and financials on file with the lender / loan servicer can be used for the short sale or deed-in-lieu. (Goal is to make easy for those denied under HAMP to be reviewed for the short sale or deed in lieu).
(4) HAFA allows borrowers to receive pre-approved terms (ex. minimum acceptable net proceeds) before listing their property for sale.
(5) All short sales must be at “arms length” (meaning, you cannot sell the property to any relatives or other persons with a close personal or business relationship). The buys of the property are bound to not re-convey the property – ex. back to the borrower – within 90 days.
(6) HAFA prohibits loan servicers from requiring a commission reduction in the agreed real estate listing agreement between the seller and agent (up to 6% is protected). However, Servicers may use short sale assistants on their end that must be paid a specified portion of the commission.
Here is Freddie Mac’s Short Sales commission policy: http://www.realtor.org/wps/wcm/connect/c126d4804f53ab6586b8c74e813808c1/Freddie+Mac+Short+Sales+Policy+10.27.09.pdf?MOD=AJPERES&CACHEID=c126d4804f53ab6586b8c74e813808c1
And here is Fannie Mae’s short sales commission policy: http://www.realtor.org/wps/wcm/connect/7e6786804018046f8d0cfd205f470b6e/Fannie+Mae+Short+Sales+Policy+10.27.09.pdf?MOD=AJPERES&CACHEID=7e6786804018046f8d0cfd205f470b6e
(7) Requires borrowers to be fully released from facing deficiency judgment liability judgments on the first mortgage (and on the second mortgage as well if the junior lien holder receives any incentives under HAFA). This means they cannot require a deficiency promissory note be signed, seek a deficiency judgment in a court of law, or demand any other cash contribution from the homeowner seeking the short sale.
(8) HAFA requires the use of Standard forms, process, timelines, and deadlines. See Supplemental Directive 09-09 here: https://www.hmpadmin.com/portal/docs/hamp_servicer/sd0909.pdf
(9) HAFA requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy consistent with investor guidelines. This means the servicer can have its own internal policies for implementing HAFA which policy can take into account local markets and the severity of financial loss, timing of pending foreclosure actions, etc. Yes, the discretion on all loss mitigation efforts is always left to the discretion of the servicers. Good for them, potentially bad for homeowners.
Other factors that may be taken into account in dealing with whether the homeowner will be permitted to seek a short sale or deed in lieu of foreclosure are (i) Expected recovery if foreclosure is pursued; (ii) current condition of title / encumbrances, (iii) borrowers financials submitted under HAMP, (iv.) property valuations, and (v.) effect of short sale/deed in lieu and perhaps (vi) predatory lending litigation and truth in lending (TILA) rescission risks.
(10) HAFA permits a 90-day timeline that gives homeowners the ability to sell their homes in a short sale without risk of foreclosure. See our timeline discussion below.
Here is a list of the HAMP participating loan servicers: http://www.foreclosuredefenseresourcecenter.com/2010/03/hamp-trial-plan-permanent-modification
(11) HAFA provides financial incentives for borrower relocation assistance following the short sale ($1,500); incentives to the servicers to cover short sale processing costs ($1,000); and incentives for investors matching up to $1,000 for each lien holder ($3,000 total).
(12) Credit impact following a short sale or deed in lieu of foreclosure: following a short sale, the creditor will report to the credit reporting agencies that the mortgage was settled for less than full payment (this will still impact your credit score but should not impact as much as a foreclosure).
(13) Potential tax implications for debt forgiveness following a short sale or deed in lieu: Borrowers pursuing a short sale must investigate the potential tax ramifications involved, usually by discussing this with a tax accountant, CPA or tax lawyer prior to selling their property. In some cases, debt that is forgiven that does not exceed the amount borrowed to acquire, construct, or rehabilitate property may not be treated as taxable income. Again, contact a tax professional. We will be writing a separate blog on general overview of tax issues in the loss mitigation context.
GENERAL TIMELINE UNDER HAFA:
(1) BORROWER IS REVIEWED FOR HAMP LOAN MODIFICATION BUT IS DENIED, OR CANNOT COMPLY WITH TRIAL PLAN OR IS NOT OFFERED A TRIAL PLAN ETC. SEE CONDITIONS ABOVE;
(2) BORROWER EITHER REQUESTS A SHORT SALE OR DEED IN LIEU OF FORECLOSURE AND/OR THE LOAN SERVICER SENDS BORROWER NOTICE OF RIGHT TO BE REVIEWED FOR HAFA’S SHORT SALE AND DEED IN LIEU OPTIONS WITHIN 30 DAYS:
(3) IF BORROWER FAILS TO RESPOND WITHIN 14 DAYS, THE RIGHT TO BE REVIEWED UNDER HAFA IS LOST;
(4) IF REQUESTED, BORROWER RECEIVES A SHORT SALE AGREEMENT FROM LOAN SERVICER. THIS AGREEMENT DISCLOSES THAT BORROWER HAS AT LEAST 120 DAYS TO SELL PROPERTY FREE FROM FORECLOSURE RISK AND HAS SPACES FOR THE BORROWER AND REAL ESTATE BROKERS SIGNATURES. THE LISTING AGREEMENT SHOULD BE ATTACHED AND RETURNED WITH THIS DOUCMENT AS SHOULD THE HARDSHIP FORM AND INFORMATION ON JUNIOR LIEN HOLDERS AND THE PROGRESS OF ANY NEGOTIATIONS WITH THESE LIENHOLDERS.
NOTE: YOU WILL MOST LIKELY BE DENIED A SHORT SALE IF YOU HAVE NOT NEGOTIATED YOUR SECOND MORTGAGE AND GET THEM TO RELEASE YOUR LIEN. THIS SEEMS PRETTY BRUTAL BUT ALSO SEEMS TO BE A REQUIREMENT TO GET YOUR SHORT SALE APPROVED.
(5) BORROWER HIRES A SHORT SALES AGENT AND LISTS PROPERTY FOR SHORT SALE IN LOCAL MLS; (SHORT SALE BROKER MUST SIGN DOCUMENT LISTED ABOVE);
(6) SELLER GETS AN OFFER TO PURCHASE THE PROPERTY (MUST BE AN ARMS LENGTH TRANSACTION);
(7) BORROWER SUBMITS A COMPLETE SHORT SALE PACKAGE TO LENDER INCLUDING A REQUEST FOR APPROVAL OF SHORT SALE (RASS); LOAN PREQUALIFICATION LETTER FOR THE BUYER, AND MUST FILL OUT A FORM INDICATING THE TRANSACTION DETAILS. A COPY OF THE PURCHASE AND SALE AGREEMENT MUST ALSO BE ATTACHED AND CERTAIN REPRESENTATIONS, MADE UNDER PENALTY OF PERJURY, MUST ALSO BE GIVEN.
(8) THE LOAN SERVICER CONDUCTS AN EVALUATION OF THE SHORT SALES TRANSACTION USING THE FACTORS DESCRIBED ABOVE TO SEE IF BORROWER QUALIFIES FOR THE SHORT SALE OR DEED IN LIEU OF FORECLOSURE PROGRAM;
(9) THE LOAN SERVICER MUST ACCEPT OR DENY THE RASS WITHIN 10 BUSINESS DAYS OF RECEIVING THE RASS FORM AND ADVISE BORROWER ACCORDINGLY.
(10) IF LOAN SERVICER AGREES TO THE SHORT SALE IT MUST ALSO AGREE TO WAIVE ANY DEFICIENCY JUDGMENTS FOLLOWING THE RECEIPT OF SALE PROCEEDS AND CANNOT DEMAND ANY NOTES BE SIGNED AGREEING THE PAY THE DEFICIENCY;
(11) ESCROW IS OPENED – TYPICALLY A 45 DAY ESCROW – AND THE TYPICAL REAL ESTATE TRANSACTION FUNCTIONS PROCEED (APPRAISAL, FINANCING, SELLER DISCLOSURES, INSPECTIONS, ETC.);
(12) THE BUYER OF THE SHORT SALE MUST BE A BONA FIDE PURCAHSER (ARMS LENGTH TRANSACTION) AND THEY CANNOT RE-CONVEY THE PROPERTY FOR AT LEAST 90 DAYS AND CANNOT HAVE AN AGREEMENTIN PLACE TO LEASE THE PROPERTY TO THE FORMER HOMEOWNER AS A TENANT ON THE PROPERTY;
(13) FOLLOWING THE SHORT SALE RECEIPT OF FUNDS, THE SENIOR LIEN HOLDER MUST RELEASE THEIR FIRST MORTGAGE LIEN WITHIN 10 DAYS AND CANNOT PURSUE ANY DEFICIENCY JUDGMENTS.
(14) THE SELLER WILL THEN BE ENTITLED TO $1,500 RELOCATION ASSISTANCE PAID OUT OF ESCROW PROCEEDS.
(15) TAX AND CREDIT IMPLIACATIONS ARE DISCUSSED ABOVE AND IN OTHER BLOGS.
IF YOU ARE A CALIFORNIA OR ARIZONA HOMEOWNER INTERESTED IN PURSUING HAFA SHORT SALE OR DEED IN LIEU OF FORECLOSURE YOU NEED TO ACT FAST. CONTACT OUR OFFICE TO DISCUSS YOUR CASE AND DISCUSS IMPLICATIONS COCERNING DEFICIENCY JUDGMENTS AND NEGOTIATING WITH SECOND LIEN MORTGAGE HOLDERS AND JUNIOR LIEN HOLDERS.
KEYWORDS: Arizona deficiency judgment / Phoenix HAFA lawyer / Scottsdale HAFA lawyer / Short sale attorney / Short sales lawyer / HAMP short sale program / deed-in-lieu-of foreclosure / Arizona foreclosure lawyer / Phoenix Foreclosure Lawyer / Phoenix foreclosure attorney / Scottsdale loan modification lawyer / Phoenix loan modification lawyer / Phoenix loan modification attorney / Lis Pendens / Quiet Title / Injunction / Arizona loan modification lawyer
Google our other foreclosure defense blogs on Arizona Deficiency Judgments and HAMP Loan Servicer report Card and Tax Issues in Arizona Short Sales (use keyword Vondran).
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HAMP REPORT CARD IS IN – PARTICIPATING HAMP LENDERS AND LOAN SERVICERS SIMPLY DONT MAKE THE GRADE WHEN IT COMES TO PROVIDING PERMANENT LOAN MODIFICATIONS. IS ANYONE SURPRISED HERE?
First let’s take a look at the official government spin on the progress made under HAMP. You can check out this link here http://www.makinghomeaffordable.gov/pr_03122010.html but let’s post below what it says:
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March 12, 2010 ADMINISTRATION RELEASES FEBRUARY LOAN MODIFICATION REPORT Number of permanent modifications increases by 45 percent WASHINGTON – The U.S. Department of the Treasury and the Department of Housing and Urban Development (HUD) today released February data for the Administration’s Home Affordable Modification Program (HAMP). As of the end of the month, more than one million borrowers were receiving a median savings of $500 each month – a 36 percent median monthly payment decrease. Permanent modifications have been granted to 170,000 homeowners and an additional 91,800 permanent modifications have been approved by servicers and are pending only borrower acceptance. |
WOW, NOW THAT SOUNDS FANTASTIC DOESN’T IT?
The February HAMP report can be found here:
http://www.makinghomeaffordable.gov/docs/Feb%20Report%20031210.pdf
LET’S GO OVER SOME OF THE THINGS THEY ARE NOT SAYING IN THIS REPORT:
- LOOK AT ALL OF THE TRIAL PLANS STARTED IN SEPTEMBER 2009 (553,031), AND OCTOBER 2009 (711,085). TOTAL IS APPROXIMATELY 1.26 MILLION TRIAL PLANS. THESE TRIAL PLANS ARE SUPPOSED TO BE THREE MONTHS IN LENGTH. IF THAT IS TRUE, WHERE ARE ALL THE PERMANENT MODS THAT ARE SUPPOSED TO BE COMING WHEN THERE IS NO MATERIAL CHANGE IN A BORROWERS FINANCIAL AND OTHER CONDITIONS? THE REPORT SAYS THERE ARE 170,000 PERMANENT MODS IN PLACE. DOES ANYONE ELSE SEE THE MAJOR GAP HERE? EVEN WITH THE “PENDING PERMANENT MODS” (91,800) THERE IS STILL MUCH LEFT TO BE DESIRED.
- WE ARE FORCED TO CONTINUE ASKING THE QUESTION, THE BANKS (INCLUDING WALL STREET) GOT THEIR BAILOUT, NOW WHERE IS THE HONEST, GOOD FAITH HELP FOR MAIN STREET?
Here is a list of the loan servicers mentioned in the report, and you can see breakdowns by lender and state, etc. Check out the report, it is very interesting.
Allstate Mortgage Loans & Investments, Inc.
American Eagle Federal Credit Union
American Home Mortgage Servicing, Inc
AMS Servicing, LLC
Aurora Loan Services, LLC
Bank of America, N.A.1
Bank United
Bay Federal Credit Union
Bay Gulf Credit Union
BayviewLoan Servicing, LLC
Carrington Mortgage Services, LLC
CCO Mortgage
Central Florida Educators Federal Credit Union
Central Jersey Federal Credit Union
Chase Home Finance, LLC
CitiMortgage, Inc.
Citizens 1st National Bank
Citizens First Wholesale Mortgage Company
Community Bank & Trust Company
CUC Mortgage Corporation
Digital Federal Credit Union
DuPageCredit Union
Eaton National Bank & Trust Co
Farmers State Bank
Fidelity Homestead Savings Bank
First Bank
First Federal Savings and Loan
First Federal Savings and Loan Assn. of Lakewood
First Keystone Bank
First National Bank of Grant Park
Franklin Credit Management Corporation
Fresno County Federal Credit Union
Glass City Federal Credit Union
Glenview State Bank
GMAC Mortgage, Inc.
Golden Plains Credit Union
Grafton Suburban Credit Union
Great Lakes Credit Union
Greater Nevada Mortgage Services
Green Tree Servicing LLC
Harleysville National Bank & Trust Company
Hartford Savings Bank
Hillsdale County National Bank
Home Financing Center, Inc
HomEqServicing
HomeStarBank & Financial Services
Horicon Bank
Horizon Bank, NA
Iberiabank
IBM Southeast Employees’ Federal Credit Union
IC Federal Credit Union
Idaho Housing and Finance Association
iServeResidential Lending LLC
J.P.MorganChase Bank, NA2
Lake City Bank
Lake National Bank
Litton Loan Servicing
Los Alamos National Bank
MarixServicing, LLC
Members Mortgage Company, Inc
Metropolitan National Bank
Mission Federal Credit Union
MorEquity, Inc.
Mortgage Center, LLC
Mortgage Clearing Corporation
National City Bank
NationstarMortgage LLC
Oakland Municipal Credit Union
OcwenFinancial Corporation, Inc.
OneWestBank
ORNL Federal Credit Union
Park View Federal Savings Bank
PennyMacLoan Services, LLC
PNC Bank, National Association
Purdue Employees Federal Credit Union
QLending, Inc.
Quantum Servicing Corporation
Residential Credit Solutions
RG Mortgage Corporation
Roebling Bank
RoundPointMortgage Servicing Corporation
Saxon Mortgage Services, Inc.
Schools Financial Credit Union
SEFCU
Select Portfolio Servicing
ServisOne Inc., dbaBSI Financial Services, Inc.
ShoreBank
Silver State Schools Credit Union
Sound Community Bank
Specialized Loan Servicing, LLC
Spirit of Alaska Federal Credit Union
Stanford Federal Credit Union
Sterling Savings Bank
Technology Credit Union
Tempe Schools Credit Union
The Bryn MawrTrust Co.
The Golden 1 Credit Union
U.S. Bank National Association
United Bank of Georgia
United Bank Mortgage Corporation
VantiumCapital, Inc.
Verity Credit Union
Wachovia Mortgage, FSB3
Wells Fargo Bank, NA
WescomCentral Credit Union
Yadkin Valley Bank
BOTTOM LINE – BANKS NEED TO GIVE MORE RELIEF TO STRUGGLING HOMEOWNERS FIGHTING TO SAVE THEIR HOME FROM FORECLOSURE. FORECLOSURES HURT COMMUNITIES, AND EVEN HURT THE HOMEOWNERS WHO ARE PAYING THEIR MORTGAGES. WHAT GOOD DOES IT DO TO ARTIFICIALLY PROP UP FAILED BANKS (WHO SHOULD HAVE BEEN FORCED INTO BANKRUPTCY THEMSELVES) ONLY TO CREATE A SOCIETY WHERE THE BANKS HAVE ALL THE MONEY, AND 10-25% OF THE GENERAL PUBLIC HAS NO ABILITY TO ACCESS CREDIT DUE TO CREDIT SCORES THAT REFLECT BANKRUPTCIES, FORECLOSURES, AND LATE PAYMENTS, AND SHORT SALES?
MORE INFORMATION ABOUT HAMP TRIAL PLANS CAN BE FOUND AT WWW.TRIALPLANFRAUD.COM
QUIET TITLE ACTIONS IN CALIFORNIA – A BASIC OVERVIEW
The following is general legal information and is not to be construed as legal advice or a substitute for legal advice. The information below many not be complete, accurate, or up-to-date as law can, and does frequently change. For specific questions about your quiet title case, contact a real estate or foreclosure defense attorney to review the facts of your case.
Steve Vondran, Esq. practices Real Estate, Foreclosure Defense & Bankruptcy Law in Phoenix, Arizona, and California where he is licensed to practice law. He can be reached atsteve@vondranlaw.com or (877) 276-5084.
CALIFORNIA QUIET TITLE LAW – A GENERAL OVERVIEW
The statutory provisions for Quiet Title in California can be found in the California Code of Civil Procedure Sections 760.10-760.060. A Quiet Title action is basically a legal action that seeks to “quiet title” to property where adverse claims are made against the property. For example, where a lender wrongfully forecloses on a property and claims the property as their own, but the homeowner challenges this.
Here is the California Quiet Title Statutory Law (there are also cases interpreting these quiet title provisions). Bolded and italics material are provided by me:
760.010. As used in this chapter:
(a) “Claim” includes a legal or equitable right, title, estate, lien, or interest in property or cloud upon title.
(b) “Property” includes real property, and to the extent
applicable, personal property.
760.020. (a) An action may be brought under this chapter to establish title against adverse claims to real or personal property or any interest therein.
(b) An action may be brought under this chapter by parties to an agreement entered into pursuant to Section 6307 or 6357 of the Public Resources Code to confirm the validity of the agreement.
(c) Nothing in this section shall be construed to limit the right of members of the public to bring or participate in actions challenging the validity of agreements entered into pursuant to Section 6307 or 6357 of the Public Resources Code.
760.030. (a) The remedy provided in this chapter is cumulative and not exclusive of any other remedy, form or right of action, or proceeding provided by law for establishing or quieting title to property.
(b) In an action or proceeding in which establishing or quieting title to property is in issue the court in its discretion may, upon motion of any party, require that the issue be resolved pursuant to the provisions of this chapter to the extent practicable.
760.040. (a) The superior court has jurisdiction of actions under this chapter.
(b) The court has complete jurisdiction over the parties to the action and the property described in the complaint and is deemed to have obtained possession and control of the property for the purposes of the action with complete jurisdiction to render the judgment provided for in this chapter.
(c) Nothing in this chapter limits any authority the court may have to grant such equitable relief as may be proper under the circumstances of the case.
760.050. Subject to the power of the court to transfer actions, the proper county for the trial of an action under this chapter is:
(a) Where the subject of the action is real property or real and personal property, the county in which the real property, or some part thereof, is located.
(b) Where the subject of the action is personal property, the county in which the personal property is principally located at the commencement of the action or in which the defendants, or any of them, reside at the commencement of the action.
760.060. The statutes and rules governing practice in civil actions generally apply to actions under this chapter except where they are inconsistent with the provisions of this chapter.
CALIFORNIA QUIET TITLE LAW SUMMARY
So, in short, the main purpose of a quiet title action is to establish title against adverse claims to real property or personal property. As set forth above, the remedy of quiet title can be combined with other causes of action or other remedies. And, in any action or proceeding in which establishing or quieting title to property is in issue, the court may, in its discretion and on the motion of any party, require that the issue be resolved pursuant to the California Code Of Civil Procedure provisions relating to quiet title actions.
In regards to proper jurisdiction for a California quiet title lawsuit, the quiet title lawsuit must be brought in the superior court of the county where the real property is located. Once the Quiet Title Action is before the court, the court has complete power to determine title issues.
NOTE: SECTION 761.020-761.040 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE SETS FORTH SPECIFIC PLEADING REQUIREMENTS AND LIS PENDES RULES WHEN FILING A QUIET TITLE LAWSUIT. THE RULES CAN BE FOUND HERE:
761.010. (a) An action under this chapter is commenced by filing a complaint with the court.
(b) Immediately upon commencement of the action, the plaintiff shall file a notice of the pendency (THIS IS THE “LIS PENDENS” WE HAVE TALKED ABOUT THIS IN OTHER BLOG ARTICLES) of the action in the office of the county recorder of each county in which any real property described in the complaint is located.
LIS PENDENS NOTE (NOW CALLED THE NOTICE OF PENDENCY OF ACTION): This lis pendens puts other parties on notice of your claim to real property and usually stops anyone from buying or selling your real property while the lawsuit is pending. The lis pendens can later be removed, or dissolved by Court order. Please note, there are very specific requirements for filing a lis pendens that you will need to be familiar with (google “vondran lis pendens” for more information).
761.020. The complaint shall be verified and shall include all of the following:
(a) A description of the property that is the subject of the action. In the case of tangible personal property, the description shall include its usual location. In the case of real property, the description shall include both its legal description and its street address or common designation, if any.
(b) The title of the plaintiff as to which a determination under this chapter is sought and the basis of the title. If the title is based upon adverse possession, the complaint shall allege the specific facts constituting the adverse possession.
(c) The adverse claims to the title of the plaintiff against which a determination is sought.
(d) The date as of which the determination is sought. If the determination is sought as of a date other than the date the complaint is filed, the complaint shall include a statement of the reasons why a determination as of that date is sought.
(e) A prayer for the determination of the title of the plaintiff against the adverse claims.
REQUIREMENTS OF THE DEFENDANTS ANSWER TO A CALIFORNIA QUIET TITLE LAWSUIT:
761.030. (a) The answer shall be verified and shall set forth:
(1) Any claim the defendant has.
(2) Any facts tending to controvert such material allegations of the complaint as the defendant does not wish to be taken as true.
(3) A statement of any new matter constituting a defense.
(b) If the defendant disclaims in the answer any claim, or suffers judgment to be taken without answer, the plaintiff shall not recover costs.
761.040. (a) The defendant may by cross-complaint seek affirmative relief in the action.
(b) If the defendant seeks a determination of title as of a date other than the date specified in the complaint, the cross-complaint shall include the date and a statement of the reasons why a determination as of that date is sought.
PARTIES IN A CALIFORNIA QUIET TITLE ACTION (PARTY ISSUES).
California Code of Civil Procedure Section 762.010-762.090 states that the when filing the Quiet Title Lawsuit, the Plaintiff must name as defendants all persons known or unknown claiming an interest in the property and other rules regarding proper parties in a quiet title action are addressed in these sections.
Here are those Sections:
762.010. The plaintiff shall name as defendants in the action the persons having adverse claims to the title of the plaintiff against which a determination is sought.
762.020. (a) If the name of a person required to be named as a defendant is not known to the plaintiff, the plaintiff shall so state in the complaint and shall name as parties all persons unknown in the manner provided in Section 762.060.
(b) If the claim or the share or quantity of the claim of a person required to be named as a defendant is unknown, uncertain, or contingent, the plaintiff shall so state in the complaint. If the lack of knowledge, uncertainty, or contingency is caused by a transfer to an unborn or un-ascertained person or class member, or by a transfer in the form of a contingent remainder, vested remainder subject to defeasance, executory interest, or similar disposition, the plaintiff shall also state in the complaint, so far as is known to the plaintiff, the name, age, and legal disability (if any) of the person in being who would be entitled to the claim had the contingency upon which the claim depends occurred prior to the commencement of the action.
762.030. (a) If a person required to be named as a defendant is dead and the plaintiff knows of a personal representative, the plaintiff shall join the personal representative as a defendant.
(b) If a person required to be named as a defendant is dead, or is believed by the plaintiff to be dead, and the plaintiff knows of no personal representative:
(1) The plaintiff shall state these facts in an affidavit filed with the complaint.
(2) Where it is stated in the affidavit that such person is dead, the plaintiff may join as defendants “the testate and intestate
successors of ____ (naming the deceased person), deceased, and all persons claiming by, through, or under such decedent,” naming them in that manner.
(3) Where it is stated in the affidavit that such person is believed to be dead, the plaintiff may join the person as a defendant, and may also join “the testate and intestate successors of ____ (naming the person) believed to be deceased, and all persons claiming by, through, or under such person,” naming them in that manner.
762.040. The court upon its own motion may, and upon motion of any party shall, make such orders as appear appropriate:
(a) For joinder of such additional parties as are necessary or proper.
(b) Requiring the plaintiff to procure a title report and designate a place where it shall be kept for inspection, use, and copying by the parties.
762.050. Any person who has a claim to the property described in the complaint may appear in the proceeding. Whether or not the person is named as a defendant in the complaint, the person shall appear as a defendant.
762.060. (a) In addition to the persons required to be named as defendants in the action, the plaintiff may name as defendants “all persons unknown, claiming any legal or equitable right, title, estate, lien, or interest in the property described in the complaint adverse to plaintiff’s title, or any cloud upon plaintiff’s title thereto,” naming them in that manner.
(b) In an action under this section, the plaintiff shall name as defendants the persons having adverse claims that are of record or known to the plaintiff or reasonably apparent from an inspection of the property.
(c) If the plaintiff admits the validity of any adverse claim, the complaint shall so state.
762.070. A person named and served as an unknown defendant has the same rights as are provided by law in cases of all other defendants named and served, and the action shall proceed against unknown defendants in the same manner as against other defendants named and served, and with the same effect.
762.080. The court upon its own motion may, and upon motion of any party shall, make such orders for appointment of guardians ad litem as appear necessary to protect the interest of any party.
762.090. (a) The state may be joined as a party to an action under this chapter.
(b) This section does not constitute a change in, but is
declaratory of, existing law.
WHO BEARS THE BURDEN OF PROOF IN A CALIFORNIA QUIET TITLE ACTION? THE ANSWER WILL USUALLY DEPEND ON WHETHER DEFENDANT HOLDS LEGAL TITLE OR WHETHER TITLE IS DISPUTED.
In a California Quiet Title lawsuit (WHERE LEGAL TITLE VESTS IN DEFENDANTS), the Plaintiff must bear the burden of proof (this is the case in most civil lawsuits). The normal burden of proof in a civil lawsuit is “preponderance of the evidence.” However, in a Quiet Title action, the standard of proof is higher and the Plaintiff must establish its right to title by “CLEAR AND CONVINCING” proof. See California Evidence Code Section 662 which discusses the burden of proof in a Quiet Title case:
662. The owner of the legal title to property is presumed to be the owner of the full beneficial title. This presumption may be rebutted only by clear and convincing proof.
IF TITLE TO REAL PROPERTY IS “DISPUTED” (AS OPPOSED TO HAVING LEGAL TITLE HELD BY A DEFENDANT) THEN THE TYPICAL “PREPONDERANCE OF THE EVIDENCE” STANDARD WILL APPLY.
A JUDGEMENT IN A QUIET TITLE ACTION IS NORMALLY CONCLUSIVE ON ALL PARTIES KNOWN OR UNKNOWN WHO WERE PARTIES TO THE ACTION.
California Code of Civil Procedure Section 764.030 States:
764.030. The judgment in the action is binding and conclusive on all of the following persons, regardless of any legal disability:
(a) All persons known and unknown who were parties to the action and who have any claim to the property, whether present or future, vested or contingent, legal or equitable, several or undivided. Except as provided in Section 764.045, all persons who were not parties to the action and who have any claim to the property which was not of record at the time the lis pendens was filed or, if none was filed, at the time the judgment was recorded.
HOWEVER, A QUIET TITLE ACTION WILL NOT NORMALLY AFFECT TITLE TO PARTIES WHO WERE NOT A PARTY TO THE ACTION IF THEIR CLAIM WAS KNOWN, OR REASONABLY SHOULD HAVE BEEN KNOWN.
California Code of Civil Procedure Section 764.045 states:
764.045. Except to the extent provided in Section 1908, the judgment does not affect a claim in the property or part thereof of any person who was not a party to the action if any of the following conditions is satisfied:
(a) The claim was of record at the time the lis pendens was filed or, if none was filed, at the time the judgment was recorded.
(b) The claim was actually known to the plaintiff or would have been reasonably apparent from an inspection of the property at the time the lis pendens was filed or, if none was filed, at the time the judgment was entered. Nothing in this subdivision shall be construed to impair the rights of a bona fide purchaser or encumbrancer for value dealing with the plaintiff or the plaintiff’s successors in interest.
THERE ARE NO DEFAULT JUDGMENTS – EVIDENCE IS REQUIRED IN A QUIET TITLE LAWSUIT:
California Code of Civil Procedure Section 764.010 States:
764.010. The court shall examine into and determine the plaintiff’s title against the claims of all the defendants. The court shall not enter judgment by default but shall in all cases require evidence of plaintiff’s title and hear such evidence as may be offered respecting the claims of any of the defendants, other than claims the validity of which is admitted by the plaintiff in the complaint. The court shall render judgment in accordance with the evidence and the law.
Quiet Title Case: Mangindin v. Washington Mutual Bank, 637 F. Supp.2d 700, (N.D. Cal.) 2009.
QUIET TITLE IN THE FORECLOSURE CONTEXT: TENDER ISSUES
Under California law, a plaintiff seeking to quiet title in the face of a foreclosure must allege tender or an offer of tender of the amount borrowed. See Arnolds Management Corp v. Eischen, 158 Cal.App.3d 575, 578, 205 Cal.Rptr. 15 (1984). This may make Quiet Title a more difficult proposition in a foreclosure case.
QUICK SUMMARY OF CALIFORNIA QUIET TITLE LAW
(1) THE COMPLAINT AND ANSWER TO A QUIET TITLE ACTION MUST BE VERIFIED (ESSENTIALLY MEANING MADE UNDER OATH) AND NAME ALL KNOWN OR UNKNOWN PARTIES CLAIMING AN INTEREST IN THE PROPERTY.
(2) THE QUIET TITLE COMPLAINT MUST DESCRIBE THE PROPERTY WITH A LEGAL DESCRIPTION AND COMMON ADDRESS DESCRIPTION.
(3) PLAINTIFF IN A CALIFORNIA QUIET TITLE ACTION MUST SET FORTH WHAT THE ADVERSE CLAIMS (SETTING FORTH SPECIFIC FACTS) ARE AND WHAT TYPE OF DETERMINATION IS SOUGHT.
(4) QUIET TITLE ACTION MUST SET FORTH THE DATE THE DETERMINATION IS SOUGHT AND A PRAYER FOR RELIEF TO DETERMINE PLAINTIFF’S TITLE AGAINST THE ADVERSE CLAIMS.
(5) A QUIET TITLE LAWSUIT MUST BE BROUGHT IN THE PROPER COUNTY.
(6) ANY PERSON WHO CLAIMS AN ADVERSE INTEREST IN THE PROPERTY MAY JOIN IN THE LAWSUIT EVEN IF THEY WERE NOT NAMED AS A A DEFENDANT.
(7) A QUIET TITLE LAWSUIT REQUIRES PROPER USE OF THE LIS PENDENS PROCEDURE (NOTICE OF PENDENCY OF ACTION).
(8) IN A QUIET TITLE ACTION, THE OWNER OF LEGAL TITLE (CHECK THE TITLE REPORT) IS PRESUMED TO BE THE OWNER, AND THIS CAN ONLY BE REBUTTED BY A SHOWING OF CLEAR AND CONVINCING EVIDENCE TO THE CONTRARY.
(9) GENERALLY SPEAKING, THERE ARE NO JURY TRIALS IN A QUIET TITLE ACTION AS THESE ACTIONS ARE “EQUITABLE” IN NATURE (NOT SEEKING MONEY DAMAGES) SO THE COURT WILL DECIDE PLAINTIFF’S CLAIM AND EQUITABLE DEFENSES MAY BE ASSERTED BY OPPOSING PARTIES. THE EXCEPTION WOULD BE IF PLAINTIFF IS OUT OF POSSESSION OF THE PROPERTY AND IS FILING THE QUIET TITLE ACTION TO REGAIN POSSESSION – IN THESE CIRCUMSTANCES THE CLAIM MAY BE DEEMED “LEGAL” IN NATURE AND A JURY TRIAL MAY BE REQUESTED. SEE MEDEIROS V. MEDEIROS, 177 CAL APP. 2d 69, (1960). THE PRUDENT PRACTICE IS TO ALWAYS REQUEST A JURY TRIAL WHEN FILING A PLEADING IF THAT IS WHAT YOU WANT. RAISE IT OR WAIVE IT IS THE GENERAL RULE.
(10) GENERALLY SPEAKING, A JUDGMENT IN A QUIET TITLE LAWSUIT IS CONCLUSIVE AND BINDING ON ALL PARTIES TO THE LITIGATION, BUT MAY NOT BE BINDING ON PARTIES NOT INVOLVED IN THE QUIET TITLE LAWSUIT BUT WHOS CLAIMS WERE KNOWN OR REASONABLY APPARENT. THERE ARE NO DEFAULT JUDGMENTS – CLEAR EVIDENCE IS REQUIRED.
(11) IN A QUIET TITLE ACTION IN THE FORECLOSURE OF A RESIDENCE, THE COURT MAY REQUIRE THE PLAINTIFF TO “DO EQUITY” OR TENDER AMOUNTS OWED OR IN ARREARS OR PAY THE ENTIRE BALANCE. A PARTY CANNOT USUALLY “GET EQUITY” IF THEY DON’T “DO EQUITY”.
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Visit our other websites at www.RescindMyLoan.net / www.VondranLegal.com / www.OptionArmLawyer.com / www.BKAttorneyS.net / www.ForeclosureDefenseResourceCenter.com /www.ProduceTheNoteAttorney.com / www.TrialPlanFraud.com / www.LoanModificationRipoff.net / www.LoanModSolutions.net / www.VondranLaw.com / www.LoanModLegal.com (the Southern California Foreclosure Defense Radio Show).
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KEYWORDS: CALIFORNIA LIS PENDENS / PENDENCY OF ACTION / QUIET TITLE ACTION / CALIFORNIA QUIET TITLE LAWSUIT / BURDEN OF PROOF IN QUIET TITLE CASE / QUIET TITLE IN FORECLOSURE CASE / LAWSUIT TO QUIET TITLE / CALIFORNIA FORECLOSURE DEFENSE LAWYER / PHOENIX FORECLOSURE LAWYER.
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ATTORNEY FEES - IN MOST CASES WE CHARGE AN UP-FRONT RETAINER AND HOURY FEE. IN SOME CASES, HOWEVER, WE MAY BE ABLE TO CHARGE A CONTINGENCY FEE OR FLAT RATE FEE. FOR MORE INFORMATION ABOUT CONTINGENCY FEES YOU CAN CHECK US OUT AT WWW.CONTINGENCYCASE.COM AN ONLINE DATABASE OF CONTINGENCY LAWYERS WHO MAY AGREE TO TAKE YOUR CASE ON A CONTINGENCY FEE BASIS.
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THIS IS AN ADVERTISEMENT AND COMMUNICATION PURSUANT TO STATE BAR RULES. COPYRIGHT 2010 ALL RIGHTS RESERVED. WE ONLY SEEK TO SOLICIT CLIENTS IN ARIZONA AND CALIFORNIA WHERE THE LAW OFFICES OF STEVEN C. VONDRAN IS LICENSED TO PRACTICE LAW.
It has been a while since we showcased the MOD SCAMMER of the MONTH. But we have a new one for you. Mr. Jason Adelman who resides in the State of Nevada and works for a company calledCreative Day Concepts. Guy coaches a little league team in Nevada area. We have contacted his little league district to put them on notice of their potential liability in having this low-life handing around.
Jason Adelmann is the CLASSIC LOAN MODIFICATION SCAMMER. Warning to NEVADA and CALIFORNIA HOMEOWNERS – he wants your money and cares less about compliance with state laws dealing with loan modification. Jason Adelman, we are hereby calling you out.
Once my office caught up with this loan modification ripoff artsist he came clean and admitted his wrongdoing. In fact, he stated he had no idea what the California Laws for loan modification are and he was hoping that his attorney “partner” would back him and would have compliance issues dealt with. One problem, when I asked him who his “attorney-backed” Nevada Attorney was, he went limp and silent. He was afraid to speak because he knew he got his hand caught in the non-compliance cookie jar. In fact, it is doubtful he has a lawyer backing him. Probably part of his loan mod scam.
After a conversation or two he agreed he was in the wrong and promised to correct his errant ways and pay back my California loan modification client. Here is the loan mod scam agreement he promised to sign.
MUTUAL RELEASE AND SETTLEMENT AGREEMENT
RE: Mr. XXXXXXXXXX Plaintiff v. Creative Day Concepts, Mr. Jason Adelman (“Settling Defendants”)
WHEREAS, Mr. XXXXXXXXXXXX (hereinafter referred to as “Plaintiff”), have asserted a claim against Creative Day Concepts, Mr. Jason Adelman and any other related entity including his “attorney-backed” partner who shall remain nameless (hereinafter “Settling Defendants”) in regard to loan modification services. Plaintiff and Settling Defendants Collectively may be referred to as “the Parties.”
WHEREAS, Settling Defendants deny any liability in connection with the alleged claims; and warrant that no legal action is currently pending against the Plaintiff;
WHEREAS, for valuable consideration the Parties to this Agreement wish to reach a full and final settlement of all matters and causes of action arising out of the facts, complaints, and claims between the Parties;
WHEREAS, this Settlement Agreement and Mutual Release shall be deemed confidential pursuant to the California rules of Evidence and shall not be admissible in any Court or other legal proceeding for any purpose whatsoever;
THEREFORE, the parties agree to mutually settle the above action and dispute and the Parties agree to mutually release and forever discharge each-other, including forever discharging all claims against Settling Defendants, including, but not limited to Paul Pope.
TERMS AND CONDITIONS OF MUTUAL RELEASE AND SETTLEMENT:
1. Payment to Plaintiff: In consideration for the agreement to dismiss all claims and causes of action relating to this incident, Plaintiff agrees to accept the total sum of $3,200.00 (THREE THOUSAND TWO HUNDRED DOLLARS) WHICH SHALL BE PAID IN FULL AND WHICH SETTLEMENT SHALL BE DEEMED COMPLETE UPON SUCH FUNDS CLEARING ATTORNEYS BANK ACCOUNT.
Such payment shall be made payable to The Law Offices of Steven C. Vondran, Esq., Client Trust Account and shall be sent to The Law Offices of Steven C. Vondran, 2415 East Camelback Road, Suite 700, Phoenix, AZ 85016. All payments owed under this Agreement shall be addressed and made payable as described in this section. This offer to settle shall expire November 30, 2009 at 5pm. Upon receipt and confirmation of funds, Plaintiff agrees to maintain all information in connection with the case and settlement agreement as confidential.
2. Mutual Release:
(A) As consideration for this Settlement, the Parties, their agents, spouses, heirs, employees, executors, administrators and assigns do hereby fully release and discharge each other, from and against any and all suits, demands, and/or liabilities of whatever kind or natures, including, but not limited to any liability in any way connected with and/or arising from the events and/or consequences alleged between the Parties and/or described by way of any Complaint and/or answer thereto.
The Parties agree to fully, completely, irrevocably, and mutually release each-other from any and all claims relating to this incident (and further agree to release Plaintiffs attorney from any and all legal action of any kind), except in the event any of the settling defendants (as set forth herein), institutes any type of legal action or preceding against the Plaintiff(s) or Plaintiff’s attorney, which relates to any of the claims or assertions referenced or covered herein, in which case this agreement shall become null and void and Plaintiff may file or re-institute any lawsuit against any or all the parties.
(B) Civil Code Section 1542 Waiver: In releasing each of the parties hereto as above described, all parties waive all rights described in Civil of the State of California, Section 1542, which reads as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO THE CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN ITS FAVOR AT THE TIME OF EXECUTING THE RELASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR.”
The Parties understand the above-quoted provisions of the California Civil Code Section 1542 and knowingly enter into this waiver because it is their intention in executing this release to discharge each other for all claims for relief, whether known or unknown that may be asserted by each of them. The Parties acknowledge and agree that this waiver is an essential and material term of this Release and the release provisions contained herein and that without such waiver the settlement described in this release would not have been entered into.
(C) This release shall not release any party to this Agreement from performance of his obligations under this Settlement Agreement.
3. No Promise or Inducement: No promise or inducement has been made other than those specifically set forth in this Settlement Agreement. This Settlement Agreement is executed by the Parties to this Agreement without reliance on any representations of the Parties or their representatives concerning the nature, extent of damages, or legal liability, and after full review by the legal counsel for each party.
4. Counterparts: The parties to this Agreement may execute this Agreement in two or more counterparts, which shall, in aggregate, be signed by all the parties, and each counterpart shall be deemed an original instrument as against any party who signed it.
5 Construction: This release shall not be construed against the party preparing it, but shall be construed as if all parties jointly prepared this release and any uncertainty and ambiguity shall not be interpreted against any one party. All words and terms shall be given their ordinary and plain meaning. Titles or captions contained in this full release are inserted only as a matter of convenience and fore reference and in no way define, limit, extend, or describe the scope of the release or the intent of any provisions hereof.
(A) California Law Applies: this release is to be performed in California, and be interpreted, enforced and governed by and under the laws of the State of California regardless of any choice of law conflicts.
6. Modification: The release shall not be modified by any party by oral representation made before or after the execution of this release. All modifications must be in writing and signed by parties.
7. Further Documents: The parties shall execute and deliver all documents and perform all further acts that may be reasonably necessary to effectuate the provisions of this release.
8. Advise of Counsel: Each party acknowledges that it has been represented by counsel of its own choice (or had the opportunity for such legal review and advice) in the negotiations leading up to the execution of this release and that its representative has read this release and has had it fully explained to him, her or it, by his, her or its, counsel and having no objections hereby freely executes such.
(A) Attorney Fees and Costs: Each party hereto shall bear its own attorney fees and costs arising from the actions of their own counsel in connection with this settlement and mutual release of all claims.
9. Entire Agreement: This release contains the entire agreement between the signatories hereto. The terms of this release are contractual and not mere recital. This release is executed without reliance upon any representation by any person concerning the nature or extent of damages or legal liability therefore, and the undersigned have carefully read and understand the contents of this release and sign the same as their own free act.
(A) Severability: In the event any of the provisions of this release are deemed to be invalid and unenforceable, those provisions shall be severable from the remainder of the release, and shall not cause the invalidity or unenforceability of the balance of this release.
10. Authority to Settle: By signing below, Mr. Jason Adelman (on behalf of “Settling Defendants”) represents he has authority to enter into this agreement on behalf of all “Settling Defendants.”
The foregoing hereby read, understood, and agreed by (execution by both parties is required to effectuate settlement under this agreement):
PLAINTIFF:
DATED: ____________________, 2009 ____________________________________
Mr. XXXXXXX, Plaintiff
SETTLING DEFENDANTS:
DATED: ____________________, 2009 ____________________________________
Mr. Jason Adelman, for Defendants
Only one problem, Jason Adelmann is the typical loan mod scammer in that he refuses to follow through with what he says he will do (just like all the loan modification lies he tells). The wrost part is he likes to coach little leaguers in Nevada and what a shame it is if your Clients are drafted by this loan modification scam artist.
Rest assured, once we find his “attorney-backed” partner we will be calling him out and suing him too.
Suffice it to say for now, this is chapter one. Jason Adelman of Creative Concepts wants to skate free continuing his career of lies of non-compliance in the State of California. But we will not stop until justice is served. People like Jaspn Adelmann of Creative Concepts will be brought to justice and exposed as the lying, cheating, scammer that he is.
This foreclosure crises has brought out the loan modification bozos like Jason Adelmann who have to be stopped before their callous ways injure more homeowners. Mr. Jason Adelman is not afraid to lie to collect his fee. California and Arizona homeowners are warned to be on the lookout for Creative Day Concepts and Mr. Jason Adelman who refuses to acknowledge California loan modification laws in his pursuit of profits.
________________________________________________________________________________________
Jason Adelman Updates
(1) It appears his company is called Creative Day Concepts AKA – No Stress Foreclosure AKA – Department of Foreclosure Prevention AKA – Utah Financial. Ever wonder why a company would have so many names?
(2) The addresses we have been able to obtain for Jason Adelman:
Address – 4900 California Avenue Tower B-210
Bakersfield, CA 93309
5330 Office Center Court, Suite 59
Bakersfield, CA 93309
5201 California Avenue, Suite 380
Bakersfield, CA 93309
Nevada – Creative Day Concepts
4760 South Pecos Road, Suite 103
Las Vegas, Nevada 89121
Home – 15626 Sammie Avenue
Bakersfield, CA 93314
1000 Norris Road
Bakersfield, CA 93308
Phone numbers we have been able to obtain via public sources
888-281-1363
661-633-1905
661-377-2937
661-428-0086
661-340-9049
- 3. It appears Jason Aldeman is also a youth football coach – Golden Empire Youth Football
Should a guy who promises loan modifications, principal reduction and money-back guarantees (who does not have the properly approved advanced fee agreement, is not a real estate broker, and who on information and belief accepted at least one notice of default case in violation of the California Foreclosure Consultant Act (and who agrees to a settlement and then disappears) be permitted to act as a mentor and coach for youth in the community? If My kids played in the Golden Empire Youth Football league, I would call Ron White (see his number below) and complain that I do not want a guy who blatantly violates the law in the name of profits, and who has obvious issues being truthful and honing up for his wrong-doing coaching my kids in a youth football league. Make your voice be known, help put a loan mod scammer to a halt.
5630 District #123
Bakersfield, CA 93313
Ron White – Director of Youth Football at Golden Empire Youth Football.
661-837-4393
661-201-1283
(4) It appears Jason Adelman’s wife’s name is Jennifer Lynn Adelman – She is the stated Secretary of Creative Day Concepts, Inc. a Nevada Corporation. It is not clear what role she plays, if any, in aiding, abetting, supporting and encouraging Mr. Jason Aldeman.
(5) Jason Aldeman’s Brother appears to be Mark Adelman – who is the Treasurer of Creative Day Concepts, Inc. – On information and belief he lives in the San Diego area. Again, it is not clear to what degree, if any, Mark Aldeman is involved in aiding, abetting, supporting and encouraging Mr. Jason Aldeman in his foreclosure defense business.
HERE ARE SOME OF THE VIOLATION WE WILL BE ALLEGING AGAINST JASON ADELMAN IN A CIVIL LAWSUIT:
(1) FRAUD AND DECEPTION: Offering 100% money back guarantees with no intent to honor such;
(2) FALSE ADVERTISING / 17200: JASON ALDEMAN Claims he is a “Loan Modification Specialist” (this is on his business card that he uses to illegally generate business in California) and it appears he claims he has been doing this foreclosure work for years.
(3) VIOLATION OF CALIFORNIA FORECLOSURE DEFENSE LAW: On information and belief, Mr. Aldeman has taken clients that have a Notice of Default in the State of California. Not being exempted under the law, he is in violation of the foreclosure defense law which carries stiff penalties which we plan to pursue.
If you have been ripped off or scammed by Mr. Jason Adelman, Creative Day Concepts, No Stress foreclosure or Department of Foreclosure Prevention, please contact our office to discuss a class action lawsuit.
Jason Adelman’s email address is jason@cdayc.com . If you were scammed by Jason Adelman and Creative Day Concepts, email him and ask him for a copy of your loan modification file so we can review your case.
Oh, and one last development, Jason Aldeman now appears to be running “New Life Investing” in Bakersfield. Don’t ask me how this relates to his expertise in loan modifications – also you might want to check and see if he has the proper licensing and credentials, if one is needed. His number at New Life Investing is (661) 323-5151.
PREDATORY LENDING MEETS ELDER ABUSE: ARE LENDERS PERMITTED TO FORECLOSE ON PREDATORY OPTION ARM LOANS AND OTHER COMPLICATED FINANCIAL PRODICTS IN THE STATE OF CALIFORNIA?
The following article discusses general legal information on the topic of elder abuse and foreclosure defense. This article contains general legal information and not specific legal advice. In addition, the article, cases, and analysis may not be complete and comprehensive or up-to-date. Steve Vondran, Esq. is licensed to practice law in California and Arizona. He practices law in the area of Real Estate, Bankruptcy, and Foreclosure Defense. He can be reached at steve@vondranlaw.com.
INTRODUCTION TO ELDER ABUSE AND PREDATORY LENDING
The elderly population (over 65 years of age) is one of the fastest growing segments of society. Medical science is helping people live longer, more productive lives. However, it is fairly common knowledge that as each of us grow older, whether we like it or not, we lose some of our mental and physical capacities.
In the context of mortgage loans, it may mean that elderly persons become less able to comprehend sophisticated financial products such as Option Arm Loans (pay options ARM / “pick-a-pay loans) and Reverse Mortgages and other adjustable rate mortgage and interest-only loan products that differ from the traditional 30 year fixed rate mortgage most California homeowners grew up on.
The California Attorney General’s Office has issued a guide for “financial elder abuse.” In this guide, (which you can find at the Attorney General website), they state:
“Financial elder abuse is the theft of money or property from an elder….it can be as simple as taking money from a wallet and as complex as manipulating a victim into turning over property to an abuser.”
The publication goes on to state: “This form of abuse can be devastating because an elder victim’s life savings can disappear in the blink of an eye, leaving them unable to provide for their needs and afraid of what an uncertain tomorrow will bring.”
The guide discusses “recognizing the warning signs” and states: “while financial elder abuse can take many forms, the most widespread abuses include telemarketing fraud, identity theft, predatory lending, and home improvement and estate planning scams.” Telemarketing fraud could come in the form of dealing with a loan broker over the telephone who attempts to coerce an elderly homeowner into believing a certain type of loan (ex. An Option Arm Loan) is the best for the homeowner (when in fact the borrower has no ability to repay a loan that builds negative amortization and which is likely to “recast” in the near future), or falsely trumping up a homeowners income in order to ensure a loan is funded and the broker is paid.
In the section discussing “Predatory Lending” the publication states:
“More than 80% of Americans aged 50 and older are homeowners. Elders are often the target of unscrupulous lenders who pressure them into high-interest rate loans that they may not be able to repay. Older homeowners are often persuaded to borrow money through home equity loans for home repairs, debt consolidation, or to pay health care costs. These loans are sold as “miracle financial cure,” and homeowners are devastated to find out they cannot afford to pay off the loans, and as a result, may lose their home. Often these loans are packed with excessive fees, costly credit insurance, pre-payment penalties, and balloon payments.”
Even California Banker’s Association (an association of California Banker’s) discusses the concept of elder financial abuse on its website – www.calbankers.com – by stating “Common elder abuse scenarios – obtaining money or property by undue influence, misrepresentation, or fraud….” This suggests that even Banker’s in California realize that elder abuse is “common” and that it is wrongful. But what is to be done about it? What is to be done when lenders and brokers advise and “steer” and influence elder homeowners into entering into loan transactions with sophisticated non-traditional loan products and artificially falsify income documentation because they know there is no true ability to repay the loan, much less qualify for it in the first place.
This is precisely the scenario in many cases that we see in our role as foreclosure defense counsel for elderly homeowners facing foreclosure or facing eviction following foreclosure. It is against this back-drop that we must act, to what extent will the California Courts exercise their inherent equitable power to protect elderly homeowners (over 65 years of age at the signing of the loan documents or an elder dependent adult) where the loan product is seen to be the product of fraud or deception (such as steering, false trumping of income, intentional misrepresentations, or other fraudulent and deceptive business practices) perpetrated by predatory brokers, lenders and loan servicers who seek profit over fiduciary duty?
CALIFORNIA ELDER ABUSE LAW
•A. California Elder Abuse Statute
CALIFORNIA CODES
WELFARE AND INSTITUTIONS CODE
SECTION 15600-15601
INTRODUCTION SECTION
15600. (a) The Legislature recognizes that elders and dependent
adults may be subjected to abuse, neglect, or abandonment and that
this state has a responsibility to protect these persons.
(b) The Legislature further recognizes that a significant number
of these persons are elderly. The Legislature desires to direct
special attention to the needs and problems of elderly persons,
recognizing that these persons constitute a significant and
identifiable segment of the population and that they are more subject
to risks of abuse, neglect, and abandonment.
(c) The Legislature further recognizes that a significant number
of these persons have developmental disabilities and that mental and
verbal limitations often leave them vulnerable to abuse and incapable
of asking for help and protection.
(d) The Legislature recognizes that most elders and dependent
adults who are at the greatest risk of abuse, neglect, or abandonment
by their families or caretakers suffer physical impairments and
other poor health that place them in a dependent and vulnerable
position.
(e) The Legislature further recognizes that factors which
contribute to abuse, neglect, or abandonment of elders and dependent
adults are economic instability of the family, resentment of
caretaker responsibilities, stress on the caretaker, and abuse by the
caretaker of drugs or alcohol.
(f) The Legislature declares that this state shall foster and
promote community services for the economic, social, and personal
well-being of its citizens in order to protect those persons
described in this section.
(g) The Legislature further declares that uniform state
guidelines, which specify when county adult protective service
agencies are to investigate allegations of abuse of elders and
dependent adults and the appropriate role of local law enforcement is
necessary in order to ensure that a minimum level of protection is
provided to elders and dependent adults in each county.
(h) The Legislature further finds and declares that infirm elderly
persons and dependent adults are a disadvantaged class, that cases
of abuse of these persons are seldom prosecuted as criminal matters,
and few civil cases are brought in connection with this abuse due to
problems of proof, court delays, and the lack of incentives to
prosecute these suits.
(i) Therefore, it is the intent of the Legislature in enacting
this chapter to provide that adult protective services agencies,
local long-term care ombudsman programs, and local law enforcement
agencies shall receive referrals or complaints from public or private
agencies, from any mandated reporter submitting reports pursuant to
Section 15630, or from any other source having reasonable cause to
know that the welfare of an elder or dependent adult is endangered,
and shall take any actions considered necessary to protect the elder
or dependent adult and correct the situation and ensure the
individual’s safety.
(j) It is the further intent of the Legislature in adding Article
8.5 (commencing with Section 15657) to this chapter to enable
interested persons to engage attorneys to take up the cause of abused
elderly persons and dependent adults.
DEFINITIONS SECTION
15610.07. “Abuse of an elder or a dependent adult” means either of
the following:
(a) Physical abuse, neglect, financial abuse, abandonment,
isolation, abduction, or other treatment with resulting physical harm
or pain or mental suffering.
15610.23. (a) “Dependent adult” means any person between the ages
of 18 and 64 years who resides in this state and who has physical or
mental limitations that restrict his or her ability to carry out
normal activities or to protect his or her rights, including, but not
limited to, persons who have physical or developmental disabilities,
or whose physical or mental abilities have diminished because of
age.
15610.25. “Developmentally disabled person” means a person with a
developmental disability specified by or as described in subdivision
(a) of Section 4512.
15610.27. “Elder” means any person residing in this state, 65 years
of age or older.
15610.30. (a) “Financial abuse” of an elder or dependent adult
occurs when a person or entity does any of the following:
(1) Takes, secretes, appropriates, obtains, or retains real or
personal property of an elder or dependent adult for a wrongful use
or with intent to defraud, or both.
(2) Assists in taking, secreting, appropriating, obtaining, or
retaining real or personal property of an elder or dependent adult
for a wrongful use or with intent to defraud, or both.
(3) Takes, secretes, appropriates, obtains, or retains, or assists
in taking, secreting, appropriating, obtaining, or retaining, real
or personal property of an elder or dependent adult by undue
influence, as defined in Section 1575 of the Civil Code.
(b) A person or entity shall be deemed to have taken, secreted,
appropriated, obtained, or retained property for a wrongful use if,
among other things, the person or entity takes, secretes,
appropriates, obtains, or retains the property and the person or
entity knew or should have known that this conduct is likely to be
harmful to the elder or dependent adult.
(c) For purposes of this section, a person or entity takes,
secretes, appropriates, obtains, or retains real or personal property
when an elder or dependent adult is deprived of any property right,
including by means of an agreement, donative transfer, or
testamentary bequest, regardless of whether the property is held
directly or by a representative of an elder or dependent adult.
UNDUE INFLUENCE FOR ELDER ABUSES PURPOSES: (AS REFERENCED ABOVE)
1575. Undue influence consists:
1. In the use, by one in whom a confidence is reposed by another,
or who holds a real or apparent authority over him, of such
confidence or authority for the purpose of obtaining an unfair
advantage over him;
2. In taking an unfair advantage of another’s weakness of mind;
or,
3. In taking a grossly oppressive and unfair advantage of another’s
necessities or distress.
WRIT OF ATTACHMENT
15657.01. Notwithstanding Section 483.010 (SEE BELOW) of the Code of Civil
Procedure, an attachment may be issued in any action for damages
pursuant to Section 15657.5 for financial abuse of an elder or
dependent adult, as defined in Section 15610.30. The other provisions
of the Code of Civil Procedure not inconsistent with this article
shall govern the issuance of an attachment pursuant to this section.
In an application for a writ of attachment, the claimant shall refer
to this section. An attachment may be issued pursuant to this section
whether or not other forms of relief are demanded.
483.010. (a) Except as otherwise provided by statute, an attachment
may be issued only in an action on a claim or claims for money, each
of which is based upon a contract, express or implied, where the
total amount of the claim or claims is a fixed or readily
ascertainable amount not less than five hundred dollars ($500)
exclusive of costs, interest, and attorney’s fees.
(b) An attachment may not be issued on a claim which is secured by
any interest in real property arising from agreement, statute, or
other rule of law (including any mortgage or deed of trust of realty
and any statutory, common law, or equitable lien on real property,
but excluding any security interest in fixtures subject to Division 9
(commencing with Section 9101) of the Commercial Code). However, an
attachment may be issued where the claim was originally so secured
but, without any act of the plaintiff or the person to whom the
security was given, the security has become valueless or has
decreased in value to less than the amount then owing on the claim,
in which event the amount to be secured by the attachment shall not
exceed the lesser of the amount of the decrease or the difference
between the value of the security and the amount then owing on the
claim.
(c) If the action is against a defendant who is a natural person,
an attachment may be issued only on a claim which arises out of the
conduct by the defendant of a trade, business, or profession. An
attachment may not be issued on a claim against a defendant who is a
natural person if the claim is based on the sale or lease of
property, a license to use property, the furnishing of services, or
the loan of money where the property sold or leased, or licensed for
use, the services furnished, or the money loaned was used by the
defendant primarily for personal, family, or household purposes.
(d) An attachment may be issued pursuant to this section whether
or not other forms of relief are demanded.
•B. California Elder Abuse Case-Law
REPORTED DECISIONS
•1. Zimmer v. Nawabi, 566 F. Supp.2d 1025, 2008 WL 7123093, (2008). In this case a Plaintiff elderly homeowner (79 years old) filed a lawsuit against a BROKER for elder abuse and a host of other legal claims including breach of fiduciary duty. The gravamen of Plaintiff’s complain was that the Broker lied about the amount of cash-out proceeds that would be tendered to Plaintiff at the close of the loan., and lied about the monthly payment amount and undisclosed Yield Spread Premium (YSP), and other non-disclosure of material terms of the loan. There was also an issue of a fraudulent release of legal claims Defendants fraudulently created and Plaintiff was instructed to sign the loan documents without reading them. This financial elder abuse case was also brought in the context of Plaintiff’s house facing foreclosure.
The Defendants argued there was no financial abuse or elder abuse and sought to dismiss Plaintiff’s claims. The Court failed to dismiss such claims and discussed the claim of Elder Abuse by stating: “Zimmer has a claim for financial elder abuse pursuant to Welfare and Institutions Code Section 15657 et seq. against Golden State (the Broker) because Golden State defrauded Zimmer out of the equity in her house while she was over 65 years old. She is entitled to actual and punitive damages and attorney fees.”
In regard to the Elder Abuse cause of action, the Court also stated: “Financial elder abuse is defined in subsection 15610.30(a), which provides: “Financial abuse” of an elder or dependent adult occurs when a person or entity does any of the following: (1) takes, secretes, appropriates or retains real or personal property of an elder or dependent adult to a wrongful use or with intent to defraud or both. (2) Assists in taking, secreting, appropriating or retaining real or personal property of an elder or dependent adult to a wrongful use or with intent to defraud or both.
The court went on to hold that under Cal. Welf. & Inst. Code Section 15610.30(a)(1)-(2), “a person or entity is deemed to have taken, secreted, appropriated or retained property for a wrongful use, if among other things, the the person or entity takes, secretes, appropriates, or retains possession of property in bad faith. Id Section 15610.30(b). A person or entity is deemed to have acted in bad faith if the person or entity knew or should have known that the elder had the right to have the property transferred or made readily available to the elder or to his representative. Id Section 15610.30(b)(1). Lastly, a persona should have known of such right “if, on the basis of the information received by the person or entity or the person or entity’s authorized third party, or both, it is obvious to a reasonable person that the elder has such a right. The Court determined that the Broker’s obtaining of fees (personal property) in the amount of $10,700 was wrongfully obtained under these circumstances indicating false statements and misrepresentations.
The Court in Zimmer also addressed the issue of breach of fiduciary duty. To this issue the court stated: “A mortgage broker breaches his fiduciary duty to borrower under California law if he provides materially misleading and incomplete information regarding the terms of the loan, even if correct terms are in the loan documents and borrower does not read documents.” In addition the Court stated, “when brokering loans for borrower of modest means and limited experience in financial affairs, mortgage broker has a duty of oral disclosure of material loan terms and counseling, which require him to disclose orally the true rate of interest, penalty for late payments, and other material terms of the loan. The court found the elderly homeowner/borrower to be of limited means and lacking financial savvy in financial matters. The court pointed to the elderly homeowner’s “14 years of education.”
The court went on to state that: “Under California law, a mortgage loan broker acts in a fiduciary capacity that “not only imposes on him the duty of acting in the highest good faith toward his principal, but precludes the agent from obtaining any advantage over the principal. The duty obligates brokers to make a full and accurate disclosure of the terms of a loan to borrowers and always act in utmost good faith toward their principles.”
Finally, the Zimmer court addressed “enhanced remedies” under California’s elder abuse statute. “To utilize the Elder Abuse Act’s enhanced remedies, a plaintiff must prove by clear and convincing evidence that the defendant has been guilty of recklessness, oppression, fraud, or malice in the commission of the abuse. Id Section 15610.30(b)(2). A preponderance of the evidence standard governs a Plaintiff’s ability to recover “all other remedies otherwise provided by law.”
NOTE: Although Zimmer held that a loan broker (as opposed to a lender), who owed the borrower a fiduciary duty, was liable for elder financial abuse, such cause of action may also extend to a “financial institution” or lender who may or may not owe a fiduciary duty as discussed in the Toscano case below.
UNREPORTED DECISIONS
Note: There are a fair amount of unreported decisions I found dealing with financial elder abuse. To me, it means the Courts may be willing to help out a senior, and yet for various reasons, the court may not want the case reported.
(1) Darone Case (2001 WL 34144398). In this case the Court set forth the requirements to prove a prima facie case for financial elder abuse. Specifically, the Court held:
“Here, then, in order to state a claim of actionable financial abuse…..Plaintiff must allege: (a) that she is an “elder”, (b) that Defendant “took, secreted, appropriated her “money or property”, © that Defendant did so “to a wrongful use or intent to defraud, or both” and (d) that in doing so, Defendant was guilty of “recklessness, oppression, fraud or malice.” The Court held in Darone that there was no fiduciary duty required to state a claim for elder abuse despite defendants contentions.
•2. Toscano v. Ameriquest Mortgage Company (non-reported in F.Supp 2d, 2007 WL 3125023 (E.D. Cal), (2007). In this case, a lender (as opposed to a loan broker) sought to dismiss financial elder abuse claims levied against him. The lender argued they owed no fiduciary duty to the borrower-homeowner, and therefore could not be liable for elder financial abuse. In Toscano, Plaintiff was a 65 year man who spoke only english. Although the loan was negotiated in Spanish, the loan documents were written in English. Defendant advised Plaintiff that the loan at issue (a loan at or below 6.3% interest) was the best loan for Plaintiff. The documents Plaintiff signed had loan terms of 7%. The Court held that a fiduciary relationship was not required to state a claim for financial elder abuse under California law. The Cout also went on to set forth a fiduciary duty test that would create a duty of care, even to lenders and financial institutions (as opposed to brokers) and set forth the test as follows:
“In California, the test for determining whether a financial institution owes a duty of care to the borrower-client involves the balancing of carious factors, among which are: (1) the extent to which the transaction was intended to affect the plaintiff, (2) the foreseeability of harm to him, (3) the degree of certainty that the plaintiff suffered injury, (4) the closeness of the connection between the defendants conduct and the injury suffered, (5) the moral blame attached to the defendants conduct, and (6) the policy or preventing future harm.” The Court stated “A FIDUCIARY RELATIONSHIO CAN ARISE WHERE THE LENDER BECOMES HEAVILY ENTANGLED WITH THE BORROWER.”
Although this case is not citeable, it does given reason to believe that the Courts may so hold this way in any future case, allowing a borrower to bring a claim of financial elder abuse against both a broker and the lender. The Lender could be seen as “assisting” financial elder abuse in these types of cases. More problematic is the case of the “holder in due course” lender who will claim no liability whatsoever for acts of elder abuse that may have been committed at the loan origination stage. See below for more on holder in due course defense.
LEGAL ARGUMENTS SEEKING TO ENJOIN FORECLOSURE OF LOANS ORIGINATED AS THE PRODUCT OF ELDER ABUSE
•1. A LENDER OR LOAN SERVICER SHOULD NOT BE PERMITTED TO FORECLOSE ON A PREDATORY ELDER ABUSE LOAN (THE FRUITS OF THE POISOINOUS TREE) WHERE THE RESULT IS TO LEAVE AN ELDERLY PERSON WITHOUT SAFE AND AFFORDABLE HOUSING SOLUTIONS.
It is common knowledge that many loan servicers may prefer foreclosing on homes, rather than modifying loans, due to financial incentives often provided for in various pooling and servicing agreements. These loan servicers likely enjoyed making money off the servicing of these loans that are the product of elder abuse, as well as other predatory loans such as pay option ARM loans (Pick-a-pay negative amortization loans).
This is a strong public policy argument to be made that a Court should step in and exercise its equitable powers to prevent a foreclosure where an elderly California homeowners is about to be foreclosed upon and kicked out of their homes and thrust into an uncertain future.
As discussed below, California Business and Professions Code Section 17203 grants Courts the express authority “as may be necessary to restore to any person in interest, any money or property, real or personal, which may have been acquired by means of such unfair competition.”
Where a violation of the California Elder abuse statutes can be shown, this violation can serve as an underlying violation sufficient for California Business and Professions Code Section 17200 purposes (17200 prohibits acts of unfair competition such as violations of other statutes), and the Court should restore the loan proceeds and loan payments back to Plaintiff – similar to a TILA rescission claim and/or return any foreclosure property back to the homeowner. These are just an example of the types of arguments that could and should be made to the judge.
The other option, of allowing the elderly victim to be “kicked to the curb” should not be permitted even where a subsequent lender claims it is a “holder in due course.” The subsequent lenders “create the marketplace” for these types of loans, and “enjoy the fruits of the poisonous tree.” But for their secondary market purchases of these types of predatory loans, the original lenders (who would be forced to hold their own garbage loans) would not abuse California elderly homeowners who would have direct recourse against them.
•2. THE COURTS SHOULD PROTECT CALIFORNIA ELDERLY HOMEONWERS WHO WERE STEERED INTO COMPLEX AND NON-TRADITIONAL FINANCIAL PRODUCTS AND SHOULD DEMAND THAT THE LENDER OR LOAN SERVICER SHOW GOOD CAUSE BEFORE PURSUING A JUDICIAL FORECLOSURE SALE OR AN UNLAWFUL DETAINER ACTION (FOLLOWING A FORECLOSURE SALE THAT WAS NOT STOPPED).
As referenced in this memorandum, the State of California protects elderly citizens (those over 65) from fraudulent, oppressive, wrongful and harmful acts that threaten to cause irreparable harm. In the Case of Hernandez v. Stabach, 145 Cal.App.3d 309, 193 Cal. Rptr. 350 (1983), the Court granted a preliminary injunction preventing Defendant (a Landlord accused of retaliatory eviction – an “unfair” and “illegal” act under California Business and Professions Code Section 17200) from filing an unlawful detainer action to evict the non-rent paying tenant until such time as the Defendant Landlord appeared in the Superior Court and obtained leave of Court, (by showing good cause for the eviction) which would permit such unlawful detainer action to be filed. In Stabach, the Court held:
“The challenged portion of the preliminary injunction does not enjoin defendant from initiating unlawful detainer actions against any Plaintiff for nonpayment of rent……or deny him access to the courts. Rather, it requires only that he obtain leave of Superior Court to institute such actions in the municipal court. The injunction does not prohibit the institution of unlawful detainer actions if a showing of good cause is made.”
The Court went on to state:
“California Business and Professions Code Section 17203 provides: Any person performing or proposing to perform an act of unfair competition within this state may be enjoined in any court of competent jurisdiction. THE COURT MAY MAKE SUCH ORDERS OR JUDGEMENTS, INCLUDING THE APPOINTMENT OF A RECEIVER, AS MAY BE NECESSARY to prevent the use or employment by any person of any practice which constitutes unfair competition, as defined in this chapter, or as may be necessary to restore to any person in interest, any money or property, real or personal, which may have been acquired by means of such unfair competition.”
The Court finalized its opinion by stating:
“We conclude that it was within the court’s inherent equity power and the power conferred upon it by Business and Professions Code Section 17203 to enjoin defendant from evicting or attempting to evict any plaintiff without first obtaining permission from the court. By requiring defendant to seek leave of court, the trial court sought to MONITOR AND PREVENT DEFENDANT’S RETALIATORY ATTEMPTS TO EVICT TENANTS THAT ASSERT THEIR RIGHTS.”
The Stabach case suggests the courts have the express and inherent power to assist victims of elder financial abuse in the State of California. The question remains, will, and to what extent are the Courts willing to go to in order to protect past victims of financial elder abuse in the context of mortgage loans (hidden fees, bait and witch tactics, fraud in the factum, nondisclosure of material loan terms, false and fraudulent trumping of income, steering clients into the wrong financial product etc.)? In each of these scenarios the broker and lender (and subsequent investor of the loan on the secondary market) each enjoy handsome profits, fees and enjoy the fruits of loan origination at the elder homeowners expense and at time, to the loss of their property.
POTENTIAL PITFALLS TO ASSERTING A PREDATORY LENDING CLAIM, IN THE FORM OF AN ELDER ABUSE VIOLATION, IN THE CONTEXT OF A FORECLOSURE DEFENSE CASE
•1. Holder in Due Course: Where a company purchases a loan on the secondary market (i.e. they were not the originator of the loan, they will often claim they are a “holder in due course” and cannot be held liable for fraud, deception, elder abuse, etc. at the origination stage of the loan. This is a good argument in most cases. If a party can successfully assert holder in due course status, there are limited claims a party can make against them. We have addressed the issue of holder in due course status in other blog posts. Just google “vondran holder in due course” and you should be able to find it. Just know this is a potential defense in every predatory lending case, including elder abuse cases. The trick is to show the secondary lender is not a holder in due course and not entitled to HDC protection against liability.
•2. Federal Preemption: As if matters weren’t bad enough, and the chips stacked in favor of the powerful lenders and their mighty lobbiest in D.C., there is another doctrine of law that seeks to aid lenders in battling predatory lending claims like elder abuse. In many cases, the lenders or loan servicers who are named as defendants in lawsuits will claim the Plaintiff-homeowners claims are pre-empted by Federal law. One of these laws is HOLA. Again, we have another article that addresses this issue. Google “vondran pre-emption predatory lending.” Again, for purposes of this article, be aware that there are defenses that will be raised to every predatory lending claim you seek to raise. That is the battle folks.
CONCLUSION
Elders over 65 are one of the fastest growing segments of our society. People are living longer. That being said, many seniors grew up on 30 year fixed mortgages and are now being enticed with exotic and toxic loan products such as negative amortization loans, reverse mortgages, interest-only products, and adjustable rate mortgage products. Seniors can be particularly vulnerable when dealing with greedy and financially savvy loan brokers and lenders who seek profits over fiduciary duty and a sense of fair play. Someone has to protect seniors who are victimized in the predatory loan process. It is simply unfair to treat seniors in California like every other borrower. Seniors often survive on a fixed income, and if they are forced to the streets by Courts and Financial institutions that could care less about their well-being we can truly admit we are devolving as a society. The California elder abuse law should be used to prevent foreclosure where brokers, lenders, servicers, and other financial institutions don’t play by the rules and abuse seniors who deserve protection. The Courts must take a case-by-case approach and enjoin wrongful foreclosure and return property to the Senior where elder abuse is affirmatively shown to have been perpetrated.
ELDER ABUSE LINKS
National Center on Elder Abuse: www.ncca.aoa.gov
National Clearinghouse on Abuse Later in Life: www.ncall.com
Senior Care Attorney: www.SeniorCareAttorneys.com
National Academy of Elder Law Attorneys: www.naela.org
OptionArmLawyer: www.OptionArmLawyer.com
RescindMyLoan: www.RescindMyLoan.net
OTHER FORECLOSURE DEFENSE AND BANKRUPTCY LINKS
Foreclosure Defense Show: www.LoanModRadio.com
BK Attorney Steve: www.BKAttorneyS.net
Foreclosure Defense Resource Center: www.ForeclosureDefenseResourceCenter.com
Trial Plan Fraud: www.TrialPlanFraud.com
Vondran Law: www.VondranLaw.com and www.Vondranlegal.com
Vondran Blogs: http://activerain.com/attorneysteve
Foreclosure Defense Radio Show (Loan Modification Radio) www.LoanModRadio.com
LOOKING FOR A LAWYER TO TAKE YOUR CASE ON A CONTINGENCY FEE BASIS? WE TAKE WORLD SAVINGS AND WACHOVIA LOANS ON CONTINGENCY. TO FIND A LAWYER WHO MAY TAKE A CASE ON CONTINGENCY FEE BASIS IN YOUR AREA SEARCH THE DATABASE AT WWW.CONTINGENCYCASE.COM.
OUR GOAL HERE IS TO PROVIDE YOU GENERAL LEGAL INFORMATION, TIPS, STRATEGIES, AND INSIGHTS THAT MAY HELP YOU SAVE YOUR HOME OR INVESTMENT PROPERTY FROM FORELOSURE. SOME TOPICS THAT WILL BE DISCUSSED ON THIS WEBSITE ARE AS FOLLOWS:
- Truth In Lending Law including rescission rights
- Bankruptcy with a focus on Chapter 7 and Chapter 13
- Forensic Loan Audits
- Predatoy Lending
- Mortgage Litigation
- Foreclosure Timelines
- Tenants Rights facing foreclosure of subject property
- Seeking injunctions to stop foreclosure of your property
- Lis Pendens
- Quiet Title
- RESPA law
- Option Arm Loans
- Subprime Slime Loans
- Produce the Note issues
- Rescinding Loans through bnkruptcy
- Unlawful Detainer Timelines
- SB 94 issues
- Commercial loan modification
- Residential Loan Modification
- Deficieny Judgments
- Trial Plan Modifications
- Real Estate lawsuits
- Loan Modification Scams
- Real Estate and Foreclosure Cases
- DRE broker issues includijg DRE audits
- Advance Fee and Foreclosure Consultant Issues
- More
If you have special requests for topics you would like us to cover please do not hesitate to email us at steve@vondranlaw.com Please keep in mind any posts you make to this wwebsite are NOT private and can be read by anyone, so please do not submit confidential information. In addition, submitting information to us or posting information on this website does NOT create an Attorney-Client relationship. Only signing a retainer can do that. All information provided on this website is of general legal nature only and is not intended to be construed as lgal advice or a substitute for legal advice. For specific questions about your case or your property, please contact a foreclosure defense lawyer or bankruptcy attorney. Articles may be missing certain information, and the law may not be complete, current, or up-to-date. Please conduct your own reasearch and do not rely on information contained on this website. Steve Vondran, Attorney is licensed to practice law only in the States of California and Arizona and only seeks to solicit and serve Clients in these two states. This blog can be construed as an advertisement and communication pursuat to state bare rules. All articles are copyright to the law offices of Steve Vondran, P.C. All rights reserved.
