Borrower May Challenge Securitized Trust’s Ownership

  The Fifth Appellate District holds in Glaski v. Bank of America that a borrower may challenge a securitized trust’s claim to ownership of the deed of trust by alleging “the attempts to transfer the deed of trust to the securitized trust (which was formed under New York law) occurred after the trust’s closing date. Transfers that violate the terms of the trust instrument are void under New York law, and borrowers have standing to challenge void assignments of their loans even though they are not a party to, or a third party beneficiary of, the assignment agreement.” Continue reading

Forty Year Old Fence Did Not Establish an Agreed Boundary

  In a boundary dispute between adjoining landowners defendants attempted to rely on the doctrine of boundary by agreement, based upon the location of a fence, in defense of plaintiffs’ quiet title action. They lost. Continue reading

Loan Servicer May Pursue Judicial Foreclosure in Own Name

   In California a secured lender has two foreclosure options if a note is secured by a deed of trust or mortgage: 1) non-judicial foreclosure and 2) judicial foreclosure. The great majority of lenders proceed by non-judicial foreclosure because it is less expensive and relatively quick. However, there are circumstances where a lender might proceed by way of judicial foreclosure such as when the deed of trust does not contain a power of sale, the lender seeks a deficiency judgment, or the lender has been sued by the borrower. Judicial foreclosures are governed by Code of Civil Procedure section 725a et seq. Continue reading

Thinking of Buying Real Property at Foreclosure? Think again.

   If you purchase real property at foreclosure, you might just buy yourself a lawsuit and nothing more. The trustee’s deed, by which you acquire title, is without warranty and is subject to any defects in title, including those which may not appear of record. While you may have a defense to certain claims if you are a bona fide purchaser, it is very costly to defend even frivolous lawsuits. If the claim is colorable and one for which the claimant has title insurance, chances are it will be very expensive to defend. If you lose, you will lose the property too. The notice of pendency of action will certainly put a wrench into any plans you have to resell or borrow against the equity.

  Only very sophisticated investors, with enough financial backing to support lengthy and contentious litigation, should consider purchasing real property at foreclosure and then only after thoroughly vetting the chain of title and comparing it with a preliminary title report. Still, that may not be enough. Only an abstract of title or title insurance, not a preliminary report, offers protection if the representations in the report turn out to be inaccurate. Unfortunately, either may be difficult or impossible to obtain for the purchase of real property at auction, or the cost for a tenuous auction purchase might be considered too high.

   If you have read this advice too late, or discounted it, and purchased property at foreclosure, and have also bought a lawsuit, give me a call. I am here to help.

  I consult with clients and accept cases involving foreclosure, trustee sales, and lien priority, including quiet title and wrongful foreclosure actions. For other types of cases I accept, please scroll my “Home” and “My Practice” pages. If you are seeking a legal consultation or representation, please give me a call at 818-971-9409. – Michael Daymude

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No Default Judgments in Quiet Title Cases: Period

   Over the years I have handled my fair share of quiet title cases. They are unique in several respects. The recent case of Nickell v. Matlock, Second Appellate District, highlights one unique aspect: default judgments are not allowed. Pursuant to statutes specific to quiet title actions, the court must, in all cases, require evidence of plaintiff’s title and must hear evidence that is offered as to the claims of any other defendants.

   What about the circumstance when a defendant’s pleading has been struck and his default entered as a sanction? Is that defendant allowed to present evidence of title at the evidentiary hearing? Continue reading