Court Decision Exacerbates Uncertainties Over Foreclosure Sales
March 7, 2016
A California court of appeals allowed residential loan borrowers to unwind a foreclosure sale of their home on the basis that the loan’s terms were unconscionable. Plaintiffs obtained a loan from a loan broker that bore periodic payments that exceeded their monthly income by more than $1,200. After they defaulted their home was sold at a foreclosure sale. They sued to unwind the sale but was denied by the trial court. On appeal however the appellate court found that the plaintiffs made a sufficient case to set aside the foreclosure sale because the loan was unconscionable (and thus unenforceable) and even though the purchaser was a bona fide purchaser for value. The case is Orcilla v. Big Sur Inc. et al. For more information, please see CBA’s Regulatory Compliance Bulletin. If you have any questions, please contact Leland Chan firstname.lastname@example.org.