In Pfeifer v. Countrywide Home Loans, Division Two, First Appellate District held that, although there is no private right of action for a lenders’ failure to comply with HUD regulations, offensive action is different from defensive action.
The court determined that the deed of trust incorporated by reference the servicing requirements of HUD, including a face-to-face interview, and that the lenders had to comply with the servicing terms prior to conducting a valid nonjudicial foreclosure. Accordingly, the HUD servicing requirements are conditions precedent to the acceleration of a debt or to foreclosure.
The plaintiffs could, therefore, seek to enjoin the lenders from proceeding with a nonjudicial foreclosure based upon the lenders’ failure to perform a HUD servicing requirement, i.e., a face-to-face interview.
Tender is not required because the borrowers are seeking to enjoin a pending foreclosure sale based on the lenders’ failure to comply with the servicing requirements incorporated in the FHA deed of trust.
The court also held, after a lengthy discussion of the issue, that merely giving notice of a foreclosure sale to a consumer as required by the Civil Code does not constitute debt collection activity under the Fair Debt Collection Practices Act.
