Court Decision Could Restore Balance to Frivolous Foreclosure Challenges
March 30, 2015
Defaulting mortgage borrowers and their attorneys have barraged the courts with novel legal arguments seeking to invalidate nonjudicial foreclosures after default. Some try to attack the integrity of the chain of recorded title based on a variety of alleged defects even though such defects have no connection with the borrower’s failure to make loan payments. This month a California Court of Appeal published a decision in which the defaulting borrowers sought to set aside a foreclosure sale based on the lender’s late substitution of a trustee. In its decision the Court laid out a set of rational principles for evaluating claims to invalidate foreclosures that should help restore balance and sensibility to such challenges. For more information, please see CBA’s Regulatory Compliance Bulletin.