complaint victor johnson
TRANSCRIPT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Timothy L. McCandless, Esq., SBN 147715LAW OFFICES OF TIMOTHY L. MCCANDLESS820 Main Street, Ste. 1 Martinez, CA 94553
(925) 957-9797 Telephone(925) 957-9799 Facsimile
[email protected] [email protected]
Attorney for Plaintiffs(s):Victor D. Johnson;Frances M. Fabillaran-Johnson
SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE COUNTY OF SOLANO
Victor D. Johnson;Frances M. Fabillaran-Johnson,
Plaintiffs(s),
VS.
COUNTRYWIDE HOME LOANS, INC.; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; RECONTRUST COMPANY, N.A.; BAC HOME LOANS SERVICING, LP; BANK OF AMERICA, NATIONAL ASSOCIATION; and DOES 1 through 50, Inclusive, Defendant(s).
CASE NO:
VERIFIED COMPLAINT
1) PROMISSORY ESTOPPEL2) QUIET TITLE3) DEMAND FOR ACCOUNTING4) FRADULENT INDUCEMENT,
FRAUD and BREACH OF CONTRACT
5) CANCEL DEED OF TRUST6) VIOLATION OF CAL. CIVIL CODES
2923.5 and 29247) FRADULENT and NEGLIGENT
MISREPRESENTATION8) VIOLATION OF California
Business and Professions Code Section 17200
9) UNJUST ENRICHMENT10) INJUNCTIVE RELIEF
I.
INTRODUCTION
COMES NOW, Victor D. Johnson and Frances M. Fabillaran-Johnson
_______________________ 1 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
[hereinafter “PLAINTIFFSS”], by and through their attorney of record, and
files this Complaint seeking an emergency and immediate declaratory
and injunctive relief and actual damages, statutory damages, fees for the
costs of this action against the Defendants and challenge the failure of
Defendant, BAC Home Loans Servicing, LP, a subsidiary of Bank of
America, N.A. (“BAC”) to honor its agreements with borrowers to modify
mortgages and prevent foreclosures under the United States Treasury’s
Home Affordable Modification Program (“HAMP”). Plaintiffs’ claims are
simple – when a large financial institution promises to modify an eligible
loan to prevent foreclosure, homeowners who live up to their end of the
bargain expect that promise to be kept. This is especially true when the
financial institution is acting under the aegis of a federal program that is
specifically targeted at preventing foreclosure.
Thus, this lawsuit arises from Defendants COUNTRYWIDE, BAC and
BANK OF AMERICA’s deception in inducing plaintiffs to enter into
mortgages from 2003 through 2007 with Countrywide, violation of
foreclosure laws and defendants’ continuing tortuous conduct intended to
deprive plaintiffs of their rights and remedies for the foregoing acts as
described below.
Plaintiffs file this complaint against defendants COUNTRYWIDE
HOME LOANS, INC.; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS,
INC.; RECONTRUST COMPANY, N.A.; BAC HOME LOANS SERVICING, LP;
BANK OF AMERICA, NATIONAL ASSOCIATION; and DOES 1 through 50,
Inclusive, to vacate foreclosure process, reimburse loan closing cost,
reimburse interest paid, rescind current loans as per the violations of
California laws, and pay any and all damages in an amount unknown at
this time.
Mortgage fraud is known as the intentional misstatement,
misrepresentation, or omission by an applicant or other interested
parties, relied on by a lender or underwater to provide funding for, to
purchase, or to insure a mortgage loan. Combating mortgage fraud
_______________________ 2 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
effective requires the cooperation of law enforcement and industry
entities.
This is a predatory lending case involving deceptive, unlawful,
fraudulent, and unfair residential real estate lending and credit reporting
practices by Defendants. With this Complaint, Plaintiffs seeks rescission of
their predatory loan, monetary and statutory damages for Defendants’
violation state mortgage lending laws, monetary damages for Defendants’
fraud, equitable and restitutionary relief for Defendants’ violation of
California Business and Professions Code Section 17200, statutory and
contractual attorney’s fees, and an order quieting fee simple title of
Plaintiffs’ property that includes declaratory relief. Plaintiffs also seek to
restrain Defendants and all parties acting in concert with them in the non-
judicial foreclosure on her property.
II.
NATURE OF THE ACTION
Since early 2007 more than 7.5 million homes have entered the
foreclosure process, 4.8 million borrowers are at risk of foreclosure now,
and the crisis continues and sadly, more homeowners are afflicted into
the danger zone every day. Default and foreclosure rates are many times
higher than they have been at any time since the great depression, and
the damage has impacted every corner of our country, including urban
and rural areas, and families of every kind. The millions of foreclosures
are devastating for families that lose their homes, but also for
neighborhoods afflicted with vacancy and blight, towns and cities losing
property taxes, and for our whole economy. Compounding the harm to
working families, small investors and pension funds have lost billions of
dollars on investments in mortgage-backed securities that were sold
deceptively and built on loans that were destined to fail. In this
particular case, COUNTRYWIDE is the perpetrator, along with its
successors in interest – defendant BANK OF AMERICA and BAC HOME
LOANS.
_______________________ 3 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Abuse, fraud, conflicts of interest, and lawlessness have been
endemic at every stage of the mortgage origination, pooling,
securitization, and servicing and foreclosure process. This chain of
misconduct by many of the nations’ largest financial companies is at the
root of the foreclosure avalanche, of the failure of existing programs to
resolve the problem, and a fundamental cause of the broader economic
crisis that has cost millions of jobs and is compounding the foreclosure
problem now. In turn, failure to resolve the foreclosure crisis is worsening
our economic situation, and making it harder to create jobs.
Plaintiffs are informed and believe, and upon such information and
belief, allege that defendants “Loan Modification” program is a nothing
more than a ruse designed to circumvent California State Bill 11371 and to
lead Plaintiffs and other similarly situated borrowers to early default and
foreclosure.
Thus, this case arises out of Defendants’ egregious and ongoing and
far reaching fraudulent schemes for improper use of Plaintiffs’ identity,
fraud in the inducement, fraud in the execution, usury, and breaches of
contractual and fiduciary obligations as “Mortgagee” or “Trustee” on the
Deed of Trust, “Mortgage Brokers,” “Loan Originators,” “Loan Seller”,
“Public Notary,” “Mortgage Aggregator,” “Trustee of Pooled Assets”,
“Trustee or officers of Structured Investment Vehicle”, “Investment
Banker”, “Trustee of Special Purpose Vehicle/Issuer of Certificates of
‘Asset-backed Certificates’”, “Seller of ‘Asset-Backed’ Certificates (shares
or bonds),” “Special Servicer” and Trustee, respectively, of certain
mortgage loans pooled together in a trust fund.
The participants in the securitization scheme described herein have
devised business plans to reap millions of dollars in profits at the expense
1 Close examination of SB 1137 shows that there are significant loop holes for mortgage companies insofar and they do not have to follow SB 1137 if they are offering modifications to homeowner that meet certain criteria. All that a lender needs to do is “offer” a deferment of some of the principal due until the end of the loan and a minimal interest rate decrease to qualify under the new law. The lender does not necessarily have to modify any loan, only “offer”. Once a modification is “offered”, the lender can apply for a certificate of exemption and continue to foreclose regardless of this law.
_______________________ 4 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
of Plaintiffs [in this instance, paid $27000 in an attempt to get his loan
reinstated] and other investors in certain trust funds. In addition to
seeking compensatory, consequential and other damages, Plaintiffs seeks
declaratory relief as to what (if any) party, entity or individual or group
thereof is the owner of the promissory note executed at the time of the
loan closing, and whether the Deed of Trust (Mortgage) secures any
obligation of the Plaintiffs, and a Mandatory Injunction requiring
reconveyance of the subject property to the Plaintiffs or, in the alternative
a Final Judgment granting Plaintiffs Quiet Title in the subject property.
III.
THE SUBJECT PROPERTY
1. Plaintiffs at all times relevant have been a residents of the County
of Solano, State of California and are the owners of Real Property,
including but not limited to the property at issue herein,5043 Campbell
Court, Fairfield, CA 94533. The Legal descriptions are as follows: Lot
319, as shown on the Map of Gold Ridge, Unit No. 6, filed April 11, in Book
75 of Maps, page7 2, Solano County Records (hereinafter referred to as
“Subject Property”).
IV.PARTIES
2. Victor D. Johnson and Frances M. Fabillaran-Johnson (hereinafter
referred to as “Plaintiffs”) at all times relevant has been resident of the
County of Solano, State of California and is owner of Real Property that is
the subject in this complaint.
3. Defendant, Defendant, COUNTRYWIDE HOME LOANS, INC,
(hereinafter referred to as “COUNTRYWIDE”) at all times herein
mentioned was doing business in the County of Solano, State of California
and was listed on the Deed of Trust and is the original Lender for the
Deed of Trust Deed and Note [see Exhibit “A”]. COUNTRYWIDE is no
longer in business and there is no mystery about as to why. The fraud _______________________ 5 __________________________
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
perpetrated by COUNTRYWIDE from 2003 through 2007, including
defendant B OF A starting no later than 2007, was willful and pervasive.
The greedy Countrywide founder and CEO Angelo Mizilo discovered that
countrywide could not sustain its business, unless it utilizes its market
share in California to systematically create false and inflated property
appraisals throughout California.
COUNTRYWIDE was the original lender on plaintiffs’ Deed of
Trust which was recorded at Solano on February 8, 2006. Countrywide
then used these inflated valuations to induce plaintiffs and other
borrowers into even larger loans on increasingly risky terms. Thus, Mr.
Mozilo knew in 2004 that these loans were unsustainable for countrywide
and the borrowers and it would definitely result in a crash that would
destroy the equity invested by Plaintiffs. Plaintiffs contend this is
financial fraud perpetrated by the defendants on a scale never before
seen. This scheme led directly to a mortgage meltdown in California.
From 2008 to the present, it is common knowledge that California homes
would decrease dramatically as a direct and proximately result of
Countrywide’s scheme set forth herein. The brokers/agents and
Countrywide knew that their scheme would be a disaster yet they still
induced homeowners like the plaintiffs into their scheme without telling
them.
4. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., (hereinafter
referred to as “MERS ”) at all times herein mentioned was presumed to
being doing business in the County of Solano, State of California and
alleged to be the Beneficiary regarding Plaintiffs’ Real Property as
described above and as Situated in Solano County California. MERS was
listed on the Deed of Trust [“DOT”] dated July 8, 2006 [See Exhibit “A”]
and stating in the definition section that:
(E) “MERS” is a Mortgage Electronic Registration Systems, Inc., MERS
is a separate corporation that is acting solely as a nominee for Lender and
Lender’s successors and assigns. MERS is the beneficiary under this
_______________________ 6 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Security Instrument.
In this case, MERS is the beneficiary on the Plaintiffs’ Deed of Trust and
considered itself a “separate corporation that is acting solely as a
nominee for Lender [COUNTRYWIDE] and Lender’s successors and
assigns. However, MERS is named in excess of a million recorded
documents in this State and all over the country. Defendants recorded or
caused to be recorded deeds of trust and other documents which
identified MERS as the “beneficiary,” which MERS is not, or the “nominee
of the lender” and “lender’s successors and assigns,” which MERS never
was, and as holding “legal title”, when MERS did not, thereby naming
appointing and/or characterizing MERS in any of those capacities in
documents recorded throughout the State over the last ten years.
Consumer advocates argue that MERS records aren’t a legal
substitute for traditional documents, prompting some courts to throw out
foreclosures. Merscorp said on Feb. 16, 2011 it will propose a rule
change to stop members from foreclosing in its name. It’s owned by
Fannie Mae and Freddie Mac, the government-owned mortgage
companies that have received $151 billion in government aid since 2008,
and financial firms including Bank of America [defendant in this action]
according to the MERS website.
Foreclosure practices in addition to those related to MERS are the
subject of investigations. Attorneys general of all 50 states are jointly
investigating whether banks and loan servicers used false documents and
signatures to justify hundreds of thousands of foreclosures. Defendant
Bank of America, JPMorgan were among lenders that temporarily halted or
delayed foreclosures to review practices.2
5. Defendant, RECONTRUST COMPANY, N.A., (hereinafter referred to as
“RECONTRUST”) at all times herein mentioned is doing business in the
County of Solano, State of California and was listed on the Notice of
2 Bloomberg News: BofA, Citigroup Say Mortgage Database Draws Scrutiny in Foreclosure Probe: By Laura Marcinek dated March 2, 2011
_______________________ 7 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Default recorded on August 19, 2011. RECONTRUST claims to be the
beneficiary on this Notice of Default [NOD] (See Exhibit “B”). but MERS
was listed as the beneficiary as indicated on paragraph 4 of this
Complaint.
6. Defendant, BAC HOME LOANS SERVICING, LP, (hereinafter referred
to as “BAC”) at all times herein mentioned is doing business in the County
of Solano, State of California and was listed on the California Declaration
attached to the NOD by “Pomona Townsend” an employee of the BOFA
NA, for the above named Real Property. Plaintiffs believes that the
Defendant BAC is servicing agent for the Defendant B OF A NA who
unknown to Plaintiffs provided services in various forms to be determined
to others which were of such a nature to render them a “Servicer”.
7. Defendant BANK OF AMERICA, NATIONAL ASSOCIATION, (hereinafter
referred to as “BOFA N.A.”) at all times herein mentioned is doing
business in the County of Los Angeles, State of California. Plaintiffs are
informed and believe that BAC is subsidiary of BOFA N.A. In 2007, BOFA
N.A. negotiated in acquiring Countrywide. By late 2007, BOFA NA began
merging its operations with countrywide and adopting some of
Countrywide’s practices. From and after its acquisition of Countrywide in
July 2008 and continuing today, both as a successor in interest to
Countrywide and as a principal B OF A NA has engaged in and continued
the wrongful conduct complained of herein. For purposes of this
Complaint, then all references to BAC shall be deemed to refer to the acts
and omissions of BOFA N.A. Plaintiffs believes that the Defendant BAC is
servicing agent for the Defendant B OF A NA, who unknown to Plaintiffs
provided services in various forms to be determined to others which were
of such a nature to render them a “Servicer”. On September 19, 2011
RECONTRUST recorded the Corporation Assignment Deed of Trust [C-
DOT] wherein MERS, the alleged beneficiary, assigned and granted to
BOFA NA the subject DOT. [See Exhibit “C”].
8. Plaintiffs is ignorant of the true names and capacities of Defendants _______________________ 8 __________________________
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
sued herein as DOES 1 through 50, Inclusive, and therefore sues these
Defendants by such fictitious names and all persons unknown claiming
any legal or equitable right, title, estate, lien, or interest in the property
described in the complaint adverse to Plaintiffs’ title, or any cloud on
Plaintiffs’ title thereto. Plaintiffs will amend this complaint to allege their
true names and capacities when ascertained.
9. Plaintiffs are informed and believes and thereon alleges that, at all
times herein
mentioned each of the Defendants sued herein was the agent and
employee of each of the remaining Defendants. Plaintiffs allege that each
and every Defendant alleged herein ratified the conduct of each and
every other defendant. Plaintiffs further allege that at all times said
Defendants were acting within the purpose and scope of such agency and
employment.
JURY TRIAL DEMAND
Plaintiffs demand a jury trial on all issues.
THE TENDER RULE
The rationale underlying the tender rule does not apply in this case.
As one California appellate court has explained, “the rationale behind the
rule is that if plaintiffs could not have redeemed the property had the sale
procedures been proper, any irregularities in the sale did not result in
damages to the plaintiffs.”
Essentially, requiring tender of the amount of the secured
indebtedness was proper because otherwise invalidating the foreclosure
sale would be a useless act. Voiding a foreclosure for violation of Section
2923.5 is not inherently a useless act absent tender. The whole purpose
of this section is to allow a homeowner an opportunity to at least discuss
with the lender the possibility of loan modification. Where such
communication does result in loan modification, the homeowner can
avoid foreclosure even if he or she would not otherwise be in a position to
_______________________ 9 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
fully “redeem” the property at a foreclosure sale. In situations like this, a
requirement that the homeowner tender the entire amount of the secured
indebtedness would actually defeat the purpose of the statute.
PRIVATE RIGHT OF ACTION
. It is expected that defendants will state that section 2923.5 does
not afford a private right of action. There is not a consensus among the
courts who have considered this issue with Mabry v. Superior Court, 185
Cal.App.4th 208, 217 (2010) (“in order to have its obvious goal of forcing
parties to communicate (the statutory words are ‘assess’ and ‘explore’)
about a borrower’s situation and the options to avoid foreclosure, section
2923.5 necessarily confers an individual right”). This case does provide
for what Mabry decision mandated that is an injunction till such time the
issues of "explore" and "evaluate" are done before the lender has the
right to properly foreclose. The lender could legitimately file and record a
notice of default now given the efforts of the Plaintiff at this point in time.
In September of 2009 the lender had not complied with civil code 2923.5
(agreeing that “California legislature would not have enacted this
“urgency” legislation, intended to curb high foreclosure rates in the state,
without any accompanying enforcement mechanism”). Plus, Section
2923.5 does create a private right of action. The purpose of Senate Bill
1137 was to address the crisis in residential mortgage defaults and
foreclosures by protecting litigants like Plaintiff. Whether express
language conferring a private remedy is stated, the bill was aimed at
providing a remedy for mortgagors in financial straits regarding their
loans like Plaintiff. They are the proper party to litigate this cause of
action.
V.GENERAL ALLEGATIONS/ STATEMENT OF FACTS
11. Plaintiffs, the Johnsons, unknowingly signed the DOT on June 6,
2006 and this was recorded on July 8, 2006 at the Solano County
_______________________ 10 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Recorder’s office [See Exhibit “A”].
12. The loan amount of $608,000.00 was based on the appraisal
conducted by an agent of COUNTRYWIDE. They were told that the
“comps” at that time around their neighbourhood were in the $780K
figure. Plaintiffs were induced in this low interest loan, no money down
and were not fully explained the consequences of an ARM mortgage.
They relied on broker “Tonda Herndon” and unknowingly signed, to their
detriment, the loan documents.
13. The interest changed and rose dramatically. That was when the
Plaintiffs started to thoroughly look at their loan documents and were
aghast to discover that their income was inflated – it showed that
they were making $22,000.00 per month. In realty, the Johnsons
were only making $6,000 to $7000.00 per month! Plaintiffs allege
that the numbers were forged including the inflated appraisal so that they
could obtain this $608,000.00 loan.
14. Plaintiffs attempted to pay the inflated monthly mortgage but just
were not able to financially. Therefore, from 2010 to present they were
the ones that took the initiative and contacted BOFA NA themselves and
were always stonewalled by BAC and BOF A NA.
15. They contacted their previous broker, Tonda Herndon, who assisted
in obtaining a loan modification. The Johnsons started to pay their new
loan modification payments. However, this was only a trial loan
modification. It is known that the major lenders implemented President
Obama’s Making Home Affordable Loan Modification Program (HAMP).
The Johnsons were given this option and the 3-month trial loan mod
started. Thus, after this trial period was over, the Johnsons expected a
permanent loan modification. This is where the problem comes in, which
also, affects many homeowners that are n this HAMP program.
16. Because of their desire to obtain a permanent loan modification and
also to obtain a fixed reasonable interest rate, the Johnsons paid
approximately $30,000.00 to reinstate their loan and/or to lower the
_______________________ 11 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
principal. Later on, they discovered that the trial loan modification only
lowered the monthly payment but not the interest rate. They ewer
informed by their broker that they could not lower the principal due to the
“comps” in their area, which is untrue.
17. Because a final loan modification amount could not be generated.
Plaintiffs believe and thereon allege that if B OF A NA and BAC did not
have the intent to provide a loan modification at all – they are just trying
to obtain additional loan payments from them and ultimately “time
released” the foreclose of the property onto the marketplace. And, in
essence, it appears that this is true. The Notice of Default was recorded
on August 19, 2011. The defendants are obviously setting the grounds
for foreclosure.
18. Plaintiffs wanted a permanent loan modification and they have
started this before April 13, 2011. Their case was on “appeal” months
before this date. Plaintiffs supplied BAC and B OF A NA with all
documents required, timely. Before April 13, 2011, plaintiffs noticed that
every time they would call for status, the agent either would no longer be
employed, or that “they never heard of that person” or that “person could
not be reached.” Plaintiffs were extremely concerned because they have
not made payments and their loan documents were in limbo due to the
stonewalling as described in this paragraph. Plaintiff called so many
times that they soon discovered, that the Agent’s “Badge Number” was
actually a telephone extension.
19. Therefore, plaintiff started documenting his attempts [see Exhibit
“D”] on April 13, 2011. Plaintiff submitted their appeal for a loan
modification in 2010. This log notes that from April 2011 to August
2011 they were always told to wait on this appeal. As of August 2,
2011 they were informed by Oscar #8520 that their loan is in regular
status. However, RECONTRUST recorded the NOD on August 19, 2011
and on August 25, 2011, plaintiffs were informed by Terrence #2683 that
their property was in foreclosure. What is perplexing about this was that
_______________________ 12 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
just on September 1, 2011 after the NOD was filed, Courtney
#2808 informed plaintiffs that their financials were updated in
June and July.
20. What the media has displayed to the public of lenders’ atrocious
actions in truly not providing a loan modification, but merely by “offering”
led plaintiffs to hire counsel in order to expedite a permanent loan
modification and to substantiate where his $30,000 went to. Plaintiffs are
now again resubmitting their documents with the hopes of obtaining a
permanent loan modification.
21. With regard to the NOD, plaintiffs contend that they were NOT
contacted by “Pomona Townsend” as indicated on her Declaration of Due
Diligence. It was plaintiff who kept contacting the bank even BEFORE the
NOD was recorded on August 19, 2011 [See Exhibit “D”]. Ms. Townsend
signed this Due Diligence – again, this is one of the many robo-signing
instances BOFA NA is known for. There were no letter, there were no
telephone calls, there was no offer to modify or offer alternatives as
mandated by Civil Code 2923.5. Thus, the NOD itself is void.
22. In a nutshell, plaintiffs were induced into a loan – the Deed of Trust –
they signed this contract, they relied on their broker who did not explain
what a no money down ARM loan would entail, plaintiffs relied, to their
detriment as this loan was destined to fail. Not only were their incomes
inflated, so was the appraisal. Moreover, their trial loan modification
merely lowered the payments and not the interest rate.
23. As a result thereof, plaintiffs have been damaged – plaintiffs
reasonably believed that defendants after accepting the trial modification
payments and that fact that they paid approximately $30,000 against the
loan that they would get a permanent modification. Instead, they have
been damaged in the costs associated with bringing this action to enjoin
Defendants and each of them from unlawfully depriving Plaintiff from
ownership of the subject property.
GENERAL FACTS
_______________________ 13 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
The common facts herein include those facts set forth above in the
prior sections of this Complaint. Under California Civil Code § 1709 it is
unlawful to willfully deceive
another “with intent to induce him to alter his position to his injury or
risk.” Under California Civil Code § 1710, it a “deceit” to do any one or
more of the following: (1) the suggestion, as a fact, of that which is not
true, by one who does not believe it to be true; (2) the assertion, as a
fact, of that which is not true, by one who has no reasonable ground for
believing it to be true; (3) the suppression of a fact, by one who is bound
to disclose it, or who gives information of other facts which are likely to
mislead for want of communication of that fact; or, (4) a promise, made
without any intention of performing it. Under California Civil Code § 1572,
the party to a contract further engages in fraud by committing “any other
act fitted to deceive.”
In this instance, defendant COUNTRYWIDE was obligated to
disclosed that to induce plaintiffs to enter into the mortgage, they caused
the appraised value of plaintiffs’ homes to be overstated. Moreover, they
also inflated their income. COUNTRYWIDE had to disclose that to disguise
the inflated value of plaintiffs’ home, Countrywide was orchestrating the
over-valuations of homes throughout plaintiffs’ community.
COUNTRYWIDE planned to sell the mortgage together with other
mortgages as to which it also intended not to disclose the true financial
condition of the borrowers of the true value of their homes or mortgages.
Plaintiffs were caught into this trap. They were induced and blinded
by the no money down scheme. COUNTRYWIDE affirmatively
misrepresented its underwriting processes, the value of its mortgages and
they intended the plaintiffs to rely upon its mispresentation and made
those misrepresentations to create false confidence with their original
lender and to further its fraud on borrowers and investors.
VI.
FIRST CAUSE OF ACTION_______________________ 14 __________________________
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
PROMISSORY ESTOPPEL [against BANK OF AMERICA, BAC HOME LOANS and
COUNTRYWIDE]24. Plaintiffs re-allege and incorporate by reference the allegations
contained in paragraph 1-23.
25. On June 6, 2006, plaintiffs signed the DOT and were recorded on July
8, 2006. Defendant COUNTRYWIDE induced plaintiffs into signing this
contract with a no money down, no interest ARM loan. Plaintiffs’ income
was inflated and when the interest rage started to hit, they could not
afford the monthly mortgage payments.
26. In 2010, plaintiffs on their own contacted BOFA NA and BAC through
their broker, who worked on their DOT. Defendants promised, assured
and represented to plaintiffs that they could and would modify this
mortgage but only if they were in default in order to qualify. Plaintiffs had
no choice. In their minds, this was unconscionable that they had to be in
default. There was absence of meaningful choice.
Absence of meaningful choice occurs when a party to a bargain has little choice but to accept the terms stated by the other party. Hidden Terms in an agreement may qualify to show absence of meaningful terms.” See A & M Produce Co. v. FMC Corp. 135 Cal.App.3d 473, 486 (1982).
27. In doing so, Defendants knew, or should have known that Plaintiff
would be reasonably induced to rely on defendants’ promise, assurance
and representation to modify their loan by participating in Defendants’
Loan Modification” Program and not seek alternative financial remedies to
rescue the property.
28. Plaintiffs reasonably relied on Defendants’ promise, assurance and
representing by entering in this program. Plaintiffs discovered, after their
trial loan payments ended, that BAC and BOFA NA only lowered the
monthly payments and not the interest rate.. They sought for a
permanent loan modification and paid approximately $30,000 to the
banks with the hopes of lowering their monthly payment. Their
documents have been in the “appeal process” since the beginning of _______________________ 15 __________________________
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
2011 and now, defendants recorded the NOD [See Exhibit “B”.]
The elements of a promissory estoppels claim are “(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppels must be injured by his reliance.”…. (Advance Choices, Inc., v. State Dept. of health Services (2010) 182 Cal.App.4th 1661, 1672.)
29 Plaintiffs do not know where they stand with respect to their loan
modification [see Exhibit “D”]. They were promised an appeal to obtain a
final loan modification, yet a Notice was Default was recorded in August
2011. They were told that their home is in foreclosure yet on September
1, 2011 – they were told that their financials were updated. They
defaulted on their loan based on the promise that was provided by
defendants; they relied on BAC and BOFA that they would obtain a
permanent loan modification but the appeal is still in process. The fact
that they recorded the NOD only means that the next step would be a
Trustee Sale. Plaintiffs are already injured by this reliance – the fact that
they paid approximately $30,000 to the bank yet still, defendants have
not come up with a final monthly loan amount. Plaintiffs will also be
irreparably harmed if a Notice of Trustee Sale will be posted, it is just a
matter of time.
30. Thus, the question here is simple. Did BAC and/or their entities and
agents made and kept a promise to negotiate with the Plaintiffs or
whether or not the bank promised to make a loan or more precisely,
modify a loan. Plaintiffs’ promissory estoppels claim is not based on a
promise to make a unilateral offer but on a promise to negotiate in an
attempt to reach a mutually agreeable loan modification.
_______________________ 16 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
31. Injustice can be avoided by enforcing Defendants’ promise,
assurance and representation completely. WHEREFORE, plaintiffs pray
judgment against Defendants and each of them as hereinafter set forth.
SECOND CAUSE OF ACTION
QUIET TITLE – As to All Defendants and Does 1-XX
32. Plaintiffs reallege and incorporate paragraphs 1 to 31 as though
fully set forth herein.
33. Plaintiffs seek to quiet title against the claims of Defendants and all
persons claiming any legal or equitable right, title, estate, lien or adverse
interest in the property as of the date the Complaint was filed. (Cal. Code
Civil Procedure Section 760.20).
34. Plaintiffs are the owners of the subject property and are entitled to
possession and control of the real property and improvements located at
this property.
35. Plaintiffs obtained a secured loan from COUNTRYWIDE on July 8,
2006 [recordation date]. In order to secure the loan, they executed a
promissory note and secured that note with a trust deed on the subject
property.
36. On or about August 19, 2011, defendants recorded a notice of
default upon the property. .
37. This Notice of Default, Exhibit B to this complaint, listed two
separate and distinct beneficiaries. It listed the original lender and
beneficiary, COUNTRYWIDE [now it stated BOFA NA as successor to
Countrywide]. It immediately thereafter listed RECONTRUST as the _______________________ 17 __________________________
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
separate and distinct beneficiary. This misrepresentation in the Notice of
Default was a direct violation of California Civil Code§2924c(b)(1).
38. MERS is always a nominee and never the actual holder or owner of a
promissory note, or deed of trust for that matter. It is never an actual
beneficiary. MERS is essentially a sophisticated electronic bulletin board
for the recording of mortgage information. MERS never is the actual
assignee of the promissory note or trust deed.
39. In order to initiate a foreclosure proceeding, a beneficiary must
have a legal or equitable right, title or interest in the promissory note. The
current holder and owner of the note and is always a proper party to
initiate a non-judicial foreclosure proceeding. In order to invoke the rights
under California nonjudicial foreclosure law, a beneficiary must establish
an unbroken chain of transfers from prior note holders when challenged
to establish its right to foreclose.
40. Plaintiffs have never been advised as to any transfers concerning
the alleged beneficiary of this alleged mortgage note.
41. These defendants did not have the legal right initiate foreclosure
proceedings upon plaintiff’s property.
42 Plaintiffs therefore seek a judicial declaration that the title to the
subject property is vested solely in Plaintiffs and that defendants have no
right, title, estate, lien or interest in the property and that defendants
and each of them be forever enjoined from asserting any right, title,
estate, lien or interest in the property adverse to plaintiffs.
THIRD CAUSE OF ACTIONDEMAND FOR ACCONTING
[As to B OF A AND BAC HOME LOANS]
43. Plaintiffs hereby incorporate by reference each and every one of
the preceding paragraphs as if the same were fully set forth herein.
44. Plaintiffs assert that as a result of the aforementioned conduct of
defendants, and each of them, these defendants have received proceeds
while plaintiffs were undergoing their trial modification and again paid
_______________________ 18 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
more money to lower the monthly payments and to obtain a final
modification.
45. The amount of money due from Defendants, and each of them, to
plaintiff is unknown to plaintiffs at this time and cannot be ascertained
without an accounting of the proceeds after the sale of the subject
property. Plaintiffs are informed and believe and thereon allege that the
amount due to plaintiff exceeds jurisdiction of this court.
46. Plaintiff demanded his statements and an accounting of the
amortization schedule and calculated interest for the aforementioned loan
modification from defendant B OF A. Defendant has failed and refused
and continues to fail and refuse to render such an accounting.
47. Generally, there is no fiduciary duty between a lender and
borrower. Perlas v. GMAC Mortg.,LLC, 187 Cal. App. 4th 429, 436
(2010). Any other duty to provide an accounting only arises when a
written request for one is made prior to the Notice of Trustee being
recorded. CCC § 2943(c). In this instance, that was the first thing plaintiff
requested was where his payment of approximately $30,000.00 went to
when they attempted to get a final loan modification. They also noticed
that was owed, based on the Notice of Default [Exhibit B] was
$102,209.39. Therefore, what happened with the $30,000? Plaintiff also
demanded where their previous payments went to before this appeal
process began or if there even was an appeal. To date, the only thing
plaintiff received was that telephone call made on September 1, 2011
[See Exhibit “D”] that their documents/financials were current in June and
July.
48. WHEREFORE, plaintiff prays judgment against Defendants and each
of them as hereinafter set forth.
FOURTH CAUSE OF ACTION
FRADULENT INDUCEMENT, FRAUD and BREACH OF CONTRACT[As to Countrywide, Bank of America, BAC and Does 1 to XX]
_______________________ 19 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
49. Plaintiffs hereby incorporate by reference each and every one of the
preceding paragraphs as if the same were fully set forth herein.
Fraudulent Inducement
50. Plaintiffs were induced into signing the contract – DOT to their
detriment. They were enticed by the fact that there was no money down,
no interest ARM mortgage. They were not fully disclosed of the upcoming
interest rate charges. More alarming, was that their incomes were
grossly inflated – their financial stated that they were making 422,000.00
per month where in reality, the Johnsons were only making $6000-
$7000.00 per month.
51. Plaintiffs still relied on the same broker to obtain a loan
modification. Though they were given lower monthly payments, the
interest rates did not change. On top of that, after the trial loan
modification was over and plaintiffs paid approximately $30,000.00 to
have the final monthly payment lowered, they were denied and are now
appealing this process.
52. Defendants represented that after this trial program, that they
would have the opportunity to cure default [where they forced to] through
reinstatement, payoff, permanent loan modification or some other
workout.
53. At the time defendants made these representations, defendants
knew t this was not true. They had no intention to provide an opportunity
to cure prior to start foreclosure on plaintiffs’ home. Defendants made
these representations with the purpose of persuading plaintiffs to enter
into this modification.
54. Plaintiffs reasonably relied on these representations. The elements
of fraud are: (1) misrepresentation (false representation, concealment, or
nondisclosure); (2) knowledge of falsity; (3) intent to defraud, i.e., to
induce reliance; (4) justifiable reliance; and (5) resulting damages. Lazar
v. Superior Court, 12 Cal. 4th 631, 638, 49 Cal. Rptr. 2d 377 (1996).BANK _______________________ 20 __________________________
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
OF AMERICA and BAC HOME had no intention of providing plaintiffs a
permanent loan modification. They knew they would benefit by getting
monthly payments from their trial loan modification which they have
known all along that the Johnsons would not get a permanent loan
modification. And, BAC and B OF A received almost $30,000.00 from the
plaintiffs because plaintiffs relied on this premise that this may lower their
future monthly payments. They induced reliance on the plaintiffs to their
detriment. Plaintiffs are now facing damages – losing their home.
Plaintiffs request that the court order BOFA NA and BAC allow specific
performance of what they promised as a remedy – provide an accounting,
obtain a reasonable permanent loan modification and/or reinstate their
loan.
Breach of Contract
55. When Plaintiffs signed the DOT, they knew they were signing a
binding contract. They paid their monthly mortgage as agreed upon and
immediately contacted their broker and lender when they could not afford
the monthly mortgage when the interest rates started to hit because they
were not given full disclosure of the consequences of what will occur with
a no money down, ARM loan. Defendants breached the contract in
1) [See Exhibit “A”] Paragraph 24 of the DOT: Substitute Trustee Lender, at its option, from time to time appoint a successors trustee to any trustee appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the office of the Recorder of the county in which the property is located…..Paragraph 24 of the DOT: Lender shall give notice to borrower prior to acceleration following borrower’s breach of any covenant….the notice shall specify (a) the default; (b) the action required to cure the default…..”
BAC, RECONTRUST did not comply with Civil Code 2924 et seq in
that the Corporate Assignment Deed of Trust was not recorded until
September 19, 2011 AFTER the NOD was recorded on August 19,
2011. Therefore, BAC, RECONTRUST and BOFA NA did not have the
authority to record the NOD. Thus, the NOD is voidable. They also _______________________ 21 __________________________
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
breached by not complying with Paragraph 24 of the DOT. They were not
given the opportunity to cure the default – it was plaintiffs themselves
who initiated the loan modification process.
The Loan Modification Process
Plaintiffs followed, as agreed upon, the terms of the loan
modification. They paid the monthly payments and realized that the
lenders only lowered the monthly payment but not the interest rate.
Since the end of last year to this present day, plaintiffs are still being
stonewalled by BAC and BOFA [See Exhibit “D”]. Moreover, they were
coerced into defaulting their loan because they were told they could not
qualify for a loan modification unless they defaulted, to their detriment.
BAC and B OF A breached the contract because they did not perform as
promised – in that they recorded a Notice of Default and at the same time
plaintiffs were told that their financials were updated and again, at the
same time were told that their home is in foreclosure!
FIFTH CAUSE OF ACTIONTO CANCEL DEED OF TRUST
(Against all Defendants)56. Plaintiffs reallege and incorporate by reference the allegations in all
paragraphs above as though fully set forth at this place.
57. The Deed of Trust is voidable. Plaintiffs were fraudulently induced
into entering a loan that was set up to fail. Their incomes were inflated.
They were not given full disclosure the terms of the DOT. Pursuant to
California Civil Code Section 3412, this trust should be cancelled.
59. Plaintiffs are therefore entitled to have the Deed of Trust adjudged
void or voidable and cancelled, pursuant to California Civil Code Section
3412.
SIXTH CAUSE OF ACTION
WRONGFUL FORECLOSUREViolation of Cal. Civil Codes 2923.5 and 2924
(As to all RECONTRUST, MERS, B OF A, BAC HOME LOANS)
_______________________ 22 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
60. Plaintiffs reallege and incorporate by reference the allegations in
all paragraphs above as though fully set forth at this place.
61. Plaintiffs allege that at all times mentioned herein the Subject
Property was their owner-occupied residence and that Plaintiffs were
member of the class of persons protected under Civil Code §§ 2923.5 and
2924. Plaintiffs allege further that all times mentioned herein Defendants
had a duty to comply with the foreclosure avoidance and workout plan
requirements of Civil Code § 2923.5, the recording requirements of Civil
Code Section 2932.5. Section 2923.5 affects any entity seeking to
foreclose on owner-occupied, residential real property in connection with
loans made from January 1, 2003 through December 31, 2007, inclusive.
In California, Civil Code Section 2923.5 is a private right of action and
there is no tender requirement. Mabry v. Superior Court (2010) WL
2180530 (Cal.App. 4 Dist.) According to the Court in Mabry it would
"defeat the purpose of the statute to require the borrower to tender the
full amount of the indebtedness prior to any enforcement of the right to
be contacted prior to the Notice Default."
Moreover, the Perata Mortgage Relief Act, Senate Bill 1137, codified
as California Civil Code Section 2923.5, and related statutory provisions,
govern the disposition of this action. The crux of the statute is that
lenders and servicers with loans originated in California are required to
make good faith efforts to effectuate alternatives to the draconian
remedy of foreclosure, such as loan modifications, prior to the right to
take any action to foreclose on a loan. The recorded documents filed at
the Solano County Recorder prove that defendants failed to comply with
California Civil Code 2923.5:
August 19, 2011 – date Notice of Default was recorded September 19, 2011 – date MERS assigned to BAC and B OF A
This code specifically states that the trustee MAY NOT file the Notice of
Default until 30 days after contact is made to the borrower. Plaintiffs
_______________________ 23 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
were still communicating with BAC and B OF A [See Exhibit “D”]. Just on
September 1, 2011 they were informed that their financials were updated
yet the NOD was filed on August 19, 2011. Moreover, there was NO
contact to the plaintiffs. They were the ones calling the bank.
Thus, BAC HOME, BANK OF AMERICA, MERS and RECONTRUST failed to
comply with this section therefore the Notice of Default is VOIDABLE as a
matter of law.
62. BAC HOME stated on their Declaration [Exhibit “B”] that they “tried
with due diligence to contact the borrower under California Civil Code
Section 2923.5. This was a robo-signer who signed this declaration.
There was no assessment of financial situations nor were they given any
measures to avoid foreclosure. Defendants failed to advise Plaintiffs of
their options to avoid foreclosure. Because of these failures to comply
with Section 2923.5, any Notice of Default allegedly underlying any Notice
of Trustee’s Sale was voidable.
63. As to other related statutory provisions, Defendants failed to offer
Plaintiffs a loan modification plan. One was already in the works and on
appeal but the fact is that before or after August 19, 2011, no attempt
was made to contact the plaintiffs. Thus, any purported Notice of Default
and/or Notice of Trustee’s Sale would be not in compliance with Civil Code
Section 2923.6, subdivisions (a)(b)(c). VIOLATION OF CALIFORNIA CIVIL
CODE 2923.6
Pursuant to Civil Code £ 2923.6 (a), "The Legislature finds and
declares that any duty
servicers may have to maximize net present value under their
pooling and servicing agreements is owed to all parties in a
loan pool, not to any particular parties, and that it servicer acts
in the best interests of all parties if it agrees to or
implements a loan modification or workout plan for which both
_______________________ 24 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
of the following apply: (I) The loan is in payment default, or
payment default is reasonably foreseeable, and (2) The
anticipated recovery under the loan modification or workout
plan exceeds the anticipated recovery through foreclosure on a
net present value basis."
64. Defendants failed to file a Notice of Default as regarding the loan
secured by the subject property, as per Civil Code Section 2924(a),
subdivisions (1) (A), (B), (C), (D), precluding Plaintiffs from taking steps to
avoid a Trustee’s Sale of the subject property. They believe one will be
forthcoming.
65. Plaintiffs further allege that RECONTRUST, as purported foreclosing
trustee, was at all times herein an agent to both Plaintiffs and defendants
BAC HOME fka COUNTRYWIDE and MERS and that RECONTRUST had a
duty to plaintiffs to ensure that foreclosure on the Subject Property was
conducted fairly and according to prescribed statutory procedures,
including those contained in Civil Code §§ 2923.5 and 2924. While
defendants MERS AND BAC and QUALITY, owed plaintiff a duty not to
conceal material facts concerning the assignments of both the deed of
trust and promissory note; advise plaintiff the true identity of the true
lender; not to take money from plaintiff on a debt to which they have no
rights and; not to make false representations regarding the loan
modification.
66. Plaintiff maintains on information and belief that there has been
numerous improprieties in the assignment, transfer and exercise of the
power of sale contained in the Deed of Trust, and that the alleged trustee,
RECONTRUST, is not properly appointed or authorized to foreclose upon
the Subject Property and neither or MERS because the assignment of the
security instrument only i.e., DOT did not transfer the debt or obligation of
plaintiffs to pay. Plaintiffs further alleges upon information and belief that
_______________________ 25 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
(1) RECONTRUST, BAC HOME and MERS are not assignees who possesses
ownership of Plaintiffs original debt under their promissory note executed
in favor of the original lender, COUNTRYWIDE [now BAC]; (2) that any
purported assignment of Plaintiffs debt or the Deed of Trust securing this
debt to RECONTRSUT, MERS AND BAC and DOES 2 to 250, have not been
properly assigned, acknowledged and recorded as required under Civil
Code § 2932.5; (3) that RECONTRUST and BAC cannot lawfully exercise
the power of sale appurtenant to the loan and Deed of Trust absent such
assignment, acknowledgement and recording of the note, Kelly v. Upshaw
(1952) 39 Cal.2, 171, 192; (4) and that these Defendants are therefore
not entitled to foreclose on the Subject Property pursuant to Code Civil
Procedure §§ 1084, 2932.5 and 2936. See e.g., Cockerell v. Title Ins. &
Trust Co. (1954) 42 Cal.2d 284, 287-293; Neptune Society Corp. v.
Longanecker (1987) 194 Cal.App.3d 1233, 1241-1243.
67. See also Civil Code § 2936 ("The assignment of a debt secured by
mortgage carries with it the security."). RECONTRUST and/or BAC cannot
contend that it ever received or recorded a purported assignment of
Plaintiffs note from COUNTRYWIDE/BAC. Under Civil Code § 2932.5, such
assignment and recordation was required prior to RECONTRUST, MERS and
BAC the exercise of the Deed of Trust's power of sale. Also, though there is a
Declaration of Due Diligence on the recorded NOD, the required declaration
under penalty of perjury is not there, thus, making the NOD voidable. How do
we really know that they contacted the plaintiffs?
68. As to the factual effect of these deficiencies in the foreclosure
process initiated by Defendants, Plaintiffs state that there are damages in
the amount of at least $400,000.00, proof to be adduced at trial. Further,
contrary to Defendants’ contention, Plaintiffs do not assert that Section
2923.5 mandates that a loan modification occur. Rather, Plaintiffs takes
issue with the egregious conduct perpetrated by Defendants in
abnegating their duties under that statutory provision to attempt to avert
foreclosure. Additionally, Section 2923.5 does create a private right of
_______________________ 26 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
action. The purpose of Senate Bill 1137 was to address the crisis in
residential mortgage defaults and foreclosures by protecting litigants like
Plaintiffs. Whether express language conferring a private remedy is
stated, the bill was aimed at providing a remedy for mortgagors in
financial straits regarding their loans like Plaintiffs. They are the proper
party to litigate this cause of action.
69. Plaintiffs believe and thereon alleges the recorded documents
regarding this foreclosure is that they were wrongfully executed,
delivered, and recorded in that there were improper foreclosure
procedures not complying with Civil Code section 2923.5 in violation of
the terms and conditions of the promissory note and deed of trust and in
violation of the duties and obligations of Defendants-beneficiaries and
Defendants-trustees to Plaintiffs, all to Plaintiffs’ loss and damage in that
Plaintiffs have been wrongfully deprived of the beneficial use and
enjoyment of the subject real property and has been deprived of legal
title by forfeiture.
SEVENTH CAUSE OF ACTIONFRADULENT and NEGLIGENT MISREPRESENTATINO
(As to Defendants MERS, RECONTRUST, BAC HOME LOANS)70. Plaintiffs reallege and incorporate by reference the allegations in all
paragraphs above as though fully set forth at this place.
71. In pursuing non-judicial foreclosure, including without limitation,
recording the
Notice of Default, and mailing said notices to Plaintiffs and others,
Defendants, and each of them, falsely represented that they had the right
to payment under a note executed by Plaintiffs in favor of the original
lender COUNTRYWIDE, and further that they had the right to foreclose in
the Deed of Trust on the Subject Property and to sell the Subject Property.
72. Plaintiffs are informed and believe, and based thereon alleges that
the true facts are that Defendants are not, and were not in possession of
a note secured by the Subject Property, nor are they holders of a note
that substantiates their claim to an interest in the Subject Property, or
_______________________ 27 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
non-holders of a note entitled to payment, as those terms are used in the
Uniform Commercial Code §§3301, 3309 and, therefore, the Defendants,
and each of them, foreclosed non-judicially without a note secured by the
Subject Property and, thus, without a right under the law.
73. Plaintiffs are informed and believe, and based thereon alleges that
when Defendants, and each of them, misrepresented to Plaintiff and
others that they had the right to foreclose on the Subject Property, they
intended to either force Plaintiff to pay large sums of money to
Defendants, and each of them (to which they were not entitled under the
law) or to force Plaintiff to abandon the Subject Property to Defendants by
not resisting the proposed foreclosure sale.
74. Plaintiffs are further informed and believe, and based thereon allege
that in notices sent to Plaintiff after their first missed payment,
Defendants, and each of them, falsely represented the payoff amount, if
any, required to redeem the Subject Property from potential foreclosure
by adding costs and charges to the payoff amount that was not justified
and proper under the terms of the note, nor were such added costs and
charges substantiated by their alleged claims to an interest in the Subject
Property, or under applicable law.
75. Plaintiffs reasonably relied on Defendants MERS, BAC HOME LOANS
and RECONTRUST’s representations regarding its right to foreclose.
Plaintiff further relied to their detriment on Defendant BAC HOME LOANS’
representations regarding whether any money was owed to it and, if so,
the amount due and owing. The elements of negligent
misrepresentation are similar to intentional fraud except for knowledge
that the representation is false. Charnay v. Cobert, 145 Cal. App. 4th 170,
184-85, 51 Cal. Rptr. 3d 471, 482 (2006). COUNTRYWIDE knew that this
was a toxic loan and that plaintiffs had no capacity to pay this loan.
Plaintiff was misprepresented in that they were induced to signing this
loan because it was no money down, no interest. COUNTRYWIDE and its
CEO [as discussed in the above general allegations] knew that these loans
_______________________ 28 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
were going to fail. In a claim for negligent misrepresentation, the
elements are: (1) the misrepresentation of a past or existing material
fact; (2) without reasonable ground for believing it to be true; (3) with
intent to induce another’s reliance on the fact misrepresented; (4)
justifiable reliance on the misrepresentation; and (5) resulting damages.
Id.; see also Alliance Mortgage Co. v. Rothwell, 10 Cal. 4th 1226, 1239, fn.
4, 44 Cal. Rptr. 2d 352 (1995) . What plaintiffs experienced is in synced
with the above 1-5.
76. In misrepresenting and inflating the amounts owed and the costs
and charges
necessary to redeem the Subject Property prior to foreclosure,
Defendants, and each of them, damaged Plaintiff in that they made it
impossible for Plaintiff to determine the actual amounts due, if any, and
thereby substantially decreased the likelihood that Plaintiff would be able
to redeem the Subject Property, with the intent that the Subject Property
would revert to Defendants, and each of them in the event it was sold at
foreclosure.
77. Plaintiffs allege that the conduct of Defendants, and each of them,
was in complete disregard for Plaintiff’s legal and property rights, and not
within the best interest of Plaintiff, or for that matter, the community or
district as a whole in light of the vast amount of necessary or unnecessary
foreclosures sweeping the community.
78. Plaintiffs reasonably relied on Defendant BAC HOME LOANS
representations regarding its right to foreclose. Plaintiffs further relied to
their detriment on Defendant RECONTRUST AND BAC HOME LOANS’s
representations [the fact that they paid the monthly trial payments and
an additional $30,000] regarding whether any money was owed to it and,
if so, the amount due and owing.
79. Plaintiffs pray that Defendants, and each of them, not be allowed to
profit from their conduct in this matter, and that this Court enjoin
Defendants from proceeding with the forced sale of the Subject Property.
_______________________ 29 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
EIGHTH CAUSE OF ACTION FORVIOLATION OF CALIFORNIA BUSINESS AND PROFESSIONS CODE
SECTIONS 17200 ET SEQ.(AGAINST BAC, RECONTRUST, MERS AND BOFA )
80. Plaintiffs incorporate herein by reference the allegations made in
paragraphs 1 through 79, inclusive, as though fully set forth herein.
81. California Business & Professions Code Section 17200, et seq.,
prohibits acts of unfair competition, which means and includes any
“fraudulent business act or practice . . .” and conducts which is “likely to
deceive” and is “fraudulent” within the meaning of Section 17200.
82. As more fully described above, MERS, RECONTRUST, BAC and B OF
A’s acts and practices are likely to deceive, constituting a fraudulent
business act or practice. This conduct is ongoing and continues to this
date.
83. Specifically, Defendants engage in deceptive business practices
with respect to mortgage loan servicing, assignments of notes and deeds
of trust, foreclosure of residential properties and related matters by
(a) Assessing improper or excessive late fees;(b) Improperly characterizing customers’ accounts as being in
default or delinquent status to generate unwarranted fees;(c) Instituting improper or premature foreclosure proceedings
to generate unwarranted fees; (d) Misapplying or failing to apply customer payments;(e) Failing to provide adequate monthly statement information
to customers regarding the status of their accounts, payments owed, and/or basis for fees assessed;
(f) Seeking to collect, and collecting, various improper fees, costs and charges, that are either not legally due under the mortgage contract or California law, or that are in excess of amounts legally due;
(g) Mishandling borrowers’ mortgage payments and failing to timely or properly credit payments received, resulting in late charges, delinquencies or default;
(h) Treating borrowers as in default on their loans even though the borrowers have tendered timely and sufficient payments or have otherwise complied with mortgage requirements or California law;
(i) Failing to disclose the fees, costs and charges allowable under the mortgage contract;
(j) Ignoring grace periods;(k) Executing and recording false and misleading documents;
and
_______________________ 30 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
(l) Acting as beneficiaries and trustees without the legal authority to do so.
84. Defendants fail to act in good faith as they take fees for services but
do not render them competently and in compliance with applicable law.
[See Statement of Facts.]
85. Moreover, Defendants engage in a uniform pattern and practice of
unfair and overly-aggressive servicing that result in the assessment of
unwarranted and unfair fees against California consumers, and premature
default often resulting in unfair and illegal foreclosure proceedings. The
scheme implemented by the Foreclosing Defendants is designed to
defraud California consumers and enrich the Foreclosing Defendants.
86. The foregoing acts and practices have caused substantial harm to
California consumers which even our Attorney General is acting on in that
it ordered Bank of America, Chase and other banks to halt foreclosures
on October 10, 2010 and to correct their errors. At this time, it is only a
matter of time that Bank of America, BAC to finalize a deal to pay $8.5
billion to settle with blue chip investors.
“The deal comes eight months after the group fired off a letter to Bank of America demanding that it repurchase $47 billion in mortgages that its Countrywide unit sold to them in the form of bonds. The investors have argued that Countrywide's practice of modifying loans found to have faulty paperwork or those written outside of normal underwriting standards breached signed agreements with the investors. By continuing to service bad loans rather than speeding up foreclosures, the group has claimed that Countrywide ran up servicing fees, enriching itself at the expense of investors. The New York Fed is involved because it took over assets held by American International Group Inc., which faltered under the weight of bad home loans that it insured.
Bank of America, which paid $4 billion for Countrywide in 2008, has dismissed suggestions that its handling of loan modifications and other efforts to prevent foreclosure have violated the terms of the mortgage-backed securities that the investors hold. In November, CEO Brian Moynihan said he was
_______________________ 31 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
in day-to-day "hand-to-hand combat" with investors' demands.”3
87. As a direct and proximate cause of the unlawful, unfair and
fraudulent acts and practices of Defendants, Plaintiffs and California
consumers have suffered and will continue to suffer damages in the form
of unfair and unwarranted late fees and other improper fees and charges.
88. By reason of the foregoing, Defendants have been unjustly enriched
and should be required to disgorge their illicit profits and/or make
restitution to Plaintiffs and other California consumers who have been
harmed, and/or be enjoined from continuing in such practices pursuant to
California Business & Professions Code Sections 17203 and 17204.
Additionally, Plaintiffs are therefore entitled to injunctive relief and
attorney’s fees as available under California Business and Professions
Code Sec. 17200 and related sections.
89. Furthermore, Defendants assessed and collected unlawful fees from
Plaintiff. Such practice was unlawful and unethical and Plaintiff is entitled
to injunctive relief and equitable relief in the form of restitution of the
fees.
NINTH CAUSE OF ACTIONUNJUST ENRICHMENT [As to BAC and BOFA]
90. Plaintiffs repeat and re-allege every allegation above as if set forth
herein in full.
91. As a result of the supposed Loan Modification, defendants extracted
hundreds of dollars in payments from plaintiffs that they would not have
been entitled to collect had they not engaged in the scheme as described
herein.
92. Defendants are aware of its receipt of the above-described benefits.
93. Defendant received the above-described benefits [the trial loan mod
payments and the $30,000 from plaintiffs].3 “Bank of America near $8.5B Mortgage Settlement” June 29, 2011- (AP) LOS ANGELES
_______________________ 32 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
94. Defendant received the above-described benefits to the detriment
of Plaintiffs.
95. Defendant continues to retain the above-described benefits to the
detriment of the Plaintiffs.
96. As a result of defendants’ unjust enrichment, plaintiffs have
sustained damages in an amount to be determined at trial and seek full
disgorgement and restitution of defendants’ enrichments, benefits and ill-
gotten gains acquired as a result of the wrongful conduct above.
TENTH CAUSE OF ACTIONINJUNCTIVE RELIEF
97. Plaintiffs re-allege and incorporate herein as if set forth in full, each
and every allegation contained in paragraphs 1 through 96 inclusive and
further allege:
98. Based upon the facts as herein alleged, that BAC and BOFA NA and
COUNTRYWIDE failed to provide plaintiffs a loan modification; failed to
follow normal underwriting guidelines, failed to disclose after plaintiffs’
request for accounting where the $30,000 went to, failed to provide
plaintiffs with required disclosures,; that BAC, BOFA NA and
COUNTRYWIDE misrepresented the type of loan they would be obtaining,
namely a conventional mortgage versus a negatively amortized
mortgage, plaintiffs have no adequate remedy at law to prevent a
foreclosure on their property.
99. Plaintiffs were the obvious victims of predatory lending, in that
COUNTRYWIDE and B OF A failed to adequately verify plaintiffs’ income at
the inception of the negotiation of the DOT, during their trial loan
modification, thus, fraudulently inducing plaintiffs to enter into the
mortgage on the subject property.
100. Plaintiffs have no adequate remedy at law. Monetary damages are
inadequate to fully compensate plaintiffs if the subject property is sold at
a foreclosure sale.
_______________________ 33 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
101. Plaintiffs will suffer irreparable damages if the subject property is
sold by way of Trustee’s Sale, as the subject property is a unique
property, warranting injunctive relief.
102. Plaintiffs seek a preliminary injunction, preventing BAC, BOFA,
RECONTRUST and/or MERS from foreclosing on the subject property, until
a complete judicial determination of the parties are determined in court.
WHEREFORE, plaintiffs pray for judgment as more fully set forth herein.
WHEREFORE, Plaintiffs pray:
1. that Defendants be prohibited from conducting any sale of the subject
real property pending the outcome of this case and or determination of
their loan modification;
2. that this Court award Plaintiff damages as against Defendants MERS,
RECONTRUST, COUNTRYWIDE, BANK OF AMERICA, BAC HOME LOANS and
each of them, jointly and severally, for their malicious and oppressive
conduct, and their conscious disregard for Plaintiffs’ legal and property
rights, according to proof at trial.
3. that Defendants BAC HOME LOANS, RECONTRUST and MERS and each
of them, be permanently enjoined from any and all attempts to foreclose
on the Subject Property unless and until it can present proof that it is
entitled, under the law of negotiable instruments in force in California, to
enforce the underlying Promissory Note described in the Deed of Trust
that is identified in Exhibit “A.”
4. that Defendants BAC HOME LOANS, MERS, RECONTRUST, and each of
them, be ordered to provide an accounting of the loan;
5. that Plaintiff be awarded monetary damages against all of the
Defendants, and each of
them, jointly and severally, in the sum or sums incurred by Plaintiff due to
the need to bring this action, according to proof;
6. that Plaintiff be awarded statutory damages against Defendant
RECONTRUST and BAC HOME LOANS a for Unfair Debt Collection practices
under the federal and California statutes;
_______________________ 34 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
7. that attorney fees be awarded Plaintiffs as may be permitted by law;
8. that pre-judgment interest be awarded Plaintiffs as may be permitted
by law; and
9. for a declaration that the NOD recorded at this county and attached as
Exhibit B is invalid and does not provide the necessary foundation for the
conduct of a trustee sale, as defined by California Civil Code 2924 et seq.;
10. For a declaration that defendants have violated California Civil Code
§2924c(b)(1), California Civil Code §2924f, California Civil Code §2924b,
California Civil Code §2923.6, and California Civil Code §2923.52.
11. For general and special damages according to proof;
12. For punitive title;
13. For quiet title.
14. for such other and further equitable relief, declaratory relief and
legal damages as may be permitted by law and as the court may consider
just and proper.
DATED: September , 2011 LAW OFFICES OF TIMOTHY L. MCCANDLESS
_____________________________________Timothy L. McCandless, Esq.
Attorney for Plaintiffs(s): VICTOR D. JOHNSON andFRANCES M. JOHNSON
_______________________ 35 __________________________ COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
VERIFICATION
We are the plaintiff and are parties to this action. We have read the
within pleading, and on information and belief, believe that the matters
therein to be true and on that ground allege that the matters stated therein
are true. The matters stated in the foregoing documents are true to our
knowledge. We declare under penalty of perjury under the laws of the State
of California that the foregoing is true and correct. Executed in
________________, California
DATED: April 7, 2023
_________________________VICTOR D. JOHNSON
_________________________FRANCES M. JOHNSON
_______________________ 36 __________________________ COMPLAINT