Majd v. Bank of America

Plaintiff alleged defendants (Bank of America, Wells Fargo Bank, Citibank and the Mortgage Electronic Registration Systems, Inc. (MERS)) wrongfully foreclosed on his home. The trial court sustained a demurrer to a third amended complaint and entered a judgment of dismissal. On appeal, plaintiff contended the foreclosure was wrongful because irregularities in the securitization of his mortgage deprived defendants of authority to foreclose, and because the foreclosure occurred while the loan servicer was reviewing his loan for a modification under the Home Affordable Modification Program (HAMP). The Court of Appeal agreed with the latter contention, and reversed as to plaintiff’s cause of action against the loan servicer for violation of Business and Professions Code section 17200 et seq. (UCL). The Court also reversed some of the orders denying leave to amend. The Court concluded that plaintiff has otherwise stated a cause of action for wrongful foreclosure, provided the party conducting the foreclosure sale was an agent of the loan servicer. Plaintiff should be given leave to amend to allege that agency relationship, if true. Finally, plaintiff has otherwise stated a cause of action for cancellation of the trustee’s deed upon sale, but has failed to join the foreclosing trust deed beneficiary as a defendant. The foreclosing beneficiary, who allegedly purchased the property at the foreclosure sale, was an indispensable party. Provided the property is still owned of record by the foreclosing beneficiary, and not by a bona fide purchaser for value, plaintiff should be given leave to amend to add the foreclosing beneficiary as a party to the cause of action for cancellation of instruments. In all other respects the judgment was affirmed. View "Majd v. Bank of America" on Justia Law