A copy of the opinion is available at: http://www.courts.ca.gov/opinions/documents/H036483.PDF.
Borrower filed a law suit, seeking damages and to enjoin the foreclosure. The complaint included allegations that Loan Holder supposedly refused to respond to Borrower's various communications, and supposedly violated California law by failing to contact Borrower to discuss foreclosure alternatives prior to filing the notice of default. Borrower also claimed that Loan Holder was not entitled to payment on the debt due to alleged improprieties in the assignment, transfer, and exercise of the power of sale under the trust deed.
As you may recall, Section 2923.5 provides that a mortgagee, trustee, beneficiary, or authorized agent must contact the borrower "in person or by telephone in order to assess the borrower's financial situation and explore options for the borrower to avoid foreclosure" or satisfy due diligence requirements before a notice of default is filed." Cal. Civ. Code §2923.5.
Turning to Loan Holder's argument that the National Bank Act preempted Section 2923.5 because Section 2923.5 more than incidentally affected a national bank's real estate lending powers insofar as Section 2923.5 "compel[s] loan modifications as a means of avoiding foreclosures . . . , mandates specific disclosures to borrowers, and requires burdensome reviews of borrower financials . . . .[,]" the Appellate Court narrowly ruled that Section 2923.5 only incidentally affected the lending operations of a national bank, because it did not require a lender to modify a loan or take detailed loan application information, and a lender's noncompliance merely results in providing borrowers more time.
Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (312) 284-4751
Mobile: (312) 493-0874
NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you.
Our updates are available on the internet, in searchable format, at: