{"id":942,"date":"2016-04-11T10:45:32","date_gmt":"2016-04-11T17:45:32","guid":{"rendered":"http:\/\/fiduciarydutiesblog.com\/?p=942"},"modified":"2016-04-11T10:45:32","modified_gmt":"2016-04-11T17:45:32","slug":"majd-v-bank-of-america-violation-of-dual-tracking-statute-supports-claim-for-wrongful-foreclosure","status":"publish","type":"post","link":"https:\/\/fresnolawyerblog.com\/?p=942","title":{"rendered":"Majd v. Bank of America – Violation of Dual Tracking Statute Supports Claim for Wrongful Foreclosure"},"content":{"rendered":"

California law now prohibits the practice of \u201cdual tracking,\u201d whereby a lender simultaneously pursues a default while also engaging in loan modification negotiations with the borrower.\u00a0 The question concerns the remedy available when there is a violation of the dual tracking law.<\/p>\n

The court in Kazem Majd v. Bank of America, N.A.<\/em> (Jan. 14, 2016) 243 Cal.App.4th 1293 held that a lender\u2019s violation of the loan modification requirements established by the federal government in the HAMP program, and\/or violation of the dual tracking prohibition, could give rise to a claim for wrongful foreclosure against the lender.<\/p>\n

\"Fresno<\/a><\/p>\n

The court also made important findings about the HAMP program.\u00a0 Rejecting \u201ca statement found in an unpublished federal district court decision, which decision in turn repeated a statement found in other unpublished district court decisions,\u201d the court explained that, under \u201cthe relevant United States Department of the Treasury guidelines[,] where a borrower satisfies the relevant criteria, \u2018the servicer MUST offer the modification.\u2019\u201d<\/p>\n

Even more, the court held that the \u201ctender requirement\u201d does not apply when a plaintiff states a claim for wrongful foreclosure based on violation of the dual tracking statute.<\/p>\n

Explained the court, \u201cthe whole point of Civil Code section 2923.5 is to create a new, even if limited, right to be contacted about the possibility of alternatives to full payment of arrearages \u2026 The purpose of the modification rules is to avoid a foreclosure despite the borrower being incapable of complying with the terms of the original loan.\u00a0 It would be contradictory to require the borrower to tender the amount due on the original loan in such circumstances.\u201d<\/p>\n

But can such violation also support a claim to set aside the foreclosure sale?\u00a0 Only in limited circumstances.\u00a0 The case holds that the additional remedy of setting aside the foreclosure sale would only lie against the purchaser if the purchaser was not a \u201cbona fide purchaser for value.\u201d<\/p>\n

In Majd v. Bank of America<\/em>, the purchaser of the foreclosure sale was the secured lender.\u00a0 But when the purchaser is a third-party, who had no reason to know that the lender had engaged in wrongful dual tracking, the remedy of setting aside the foreclosure sale would not be available.<\/p>\n

Overall, Majd v. Bank of America<\/em> offers important protections to homeowners whose rights have been violated by the lender\u2019s unlawful \u201cdual tracking.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

California law now prohibits the practice of \u201cdual tracking,\u201d whereby a lender simultaneously pursues a default while also engaging in loan modification negotiations with the borrower.\u00a0 The question concerns the remedy available when there is a violation of the dual tracking law. The court in Kazem Majd v. Bank of America, N.A. (Jan. 14, 2016) […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,5,8],"tags":[],"class_list":["post-942","post","type-post","status-publish","format-standard","hentry","category-case-law","category-developments","category-real-property"],"_links":{"self":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts\/942"}],"collection":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=942"}],"version-history":[{"count":0,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts\/942\/revisions"}],"wp:attachment":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=942"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=942"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=942"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}