Damages for Notice of Default?

[sfosmith]

What is the name of your state (only U.S. law)? California

If a foreclosure company files a Notice of Default which begins a foreclosure process in California, but was not legally the trustee untill 2 monts later, what actions can a plaintiff undertake for damages? In this case, the sale was stopped in the bankruptcy court with the automatic stay, so the owner has no need to void a trustee sale. But the illegal filing of the notice of default allegedly caused the owner a number of harms, such as public notice of default, filing for bankruptcy, stress, expenses, etc.

Not sure if Slander of Title is the way to go, but there should be some recourse for damages in this case. Causes of Action? Cases?

 

[justalayman]

this premature filing somehow caused you to file bankruptcy? Since you discovered they were not the trustees and that was the basis for filing BK, have you sought to have the BK discharged with no actions?

Oh, that's right. They did become the trustee so the complaint (suit) would be proper.

Ever think it was merely a matter of you not being aware they were the trustees yet? It takes time to file and send proper notices once they actually are substituted as trustee.


the bigger question: did the plaintiff eventually become trustee? If so, the title has not been slandered and their filing, although premature, was not essentially improper so the stress involved is your own cause since you apparently defaulted on your mortgage loan which gave somebody the right to file suit.

 

[sfosmith]

this premature filing somehow caused you to file bankruptcy? Since you discovered they were not the trustees and that was the basis for filing BK, have you sought to have the BK discharged with no actions?

Oh, that's right. They did become the trustee so the complaint (suit) would be proper.

Ever think it was merely a matter of you not being aware they were the trustees yet? It takes time to file and send proper notices once they actually are substituted as trustee.


the bigger question: did the plaintiff eventually become trustee? If so, the title has not been slandered and their filing, although premature, was not essentially improper so the stress involved is your own cause since you apparently defaulted on your mortgage loan which gave somebody the right to file suit.
02-18-2012 02:39 PM

Non judicial in California. Yes, they became trustee 2 months later. The issue surrounds the fact that they filed a document without authority to do so. If the sale would have gone through, it could have been voided. So the courts consider this a serioud issue. But since the sale did not go through, does that make their act no big deal? Its still an act of damage upon title and I don't that depends entirely on whether they got away with it.

Is attempted robbery not prosecutable because they didn't steal anything?

 

[tranquility]

Attempted robbery? Really?

You don't pay and they try to collect. You think there is a payday here?

This is a paperwork issue. No one is trying to steal anything. The harms were caused by the OPs failure to pay and not by the entity that tried to stem some of the loss caused by that failure. A rubber stamp missing or some delayed signatures doesen't change that.

 

[sfosmith]

Let me make this more clear

With attempted robbery, I did not intend to imply the filing of the NOD is theft. Just to give an example how in another arena, their can be a crime (intent) without having arrived at the end result (taking of property).

I must not be making myself clear. Let me say it again.

I noticed in California cases that a foreclosure can be unwound after sale if the Notice of Default was filed before the foreclosure mill was Trustee. That is, they jumped the gun. They were on their way to legally becoming Trustee, the arrangements were all made with the bank, the MERS signing officer, the foreclosure file was started, BUT THE FORECLOSURE WAS FOUND TO BE VOID BECAUSE THE SUBSTITUTION OF TRUSTEE WAS NOT NOTARIZED AND FILED!!!!

Did the court say "Well, it's ok because they became Trustee later", or "It's just a delay in paperwork"? No. The sale was void and they had to do it over. Not just the noticing of sale, but the entire process from the beginning pursuant to Ca foreclosure law.

Now, does the void NOD depend on whether they went to sale and took the house with a credit bid? I don't think so. The court found the NOD void because they were not legally the Trustee, because that requires filing in the county land records. Otherwise, the original title company is the trustee.

So back to my question. In this case the NOD was filed 2 months before the foreclosure mill was LEGALLY Trustee. If I understand the court's RULING, that NOD is void and it doesn't matter if they became Trustee eventually, or whether there was a paperwork delay. If the NOD was void, then the NOD filing and noticing of sale damaged the owner. Yes or no? If yes, is there a damage claim and was there slander of title?

 

[tranquility]

If yes, is there a damage claim and was there slander of title?

No to both.