A homeowner obtained an adjustable rate mortgage (ARM) from a lender and was unable to make the monthly payments after the loan was reset to fully amortize. The homeowner defaulted and the lender initiated foreclosure proceedings. The homeowner filed a petition for bankruptcy protection, which stayed foreclosure proceedings. The homeowner requested a loan modification and reinstatement and the lender agreed to enter into loan modification negotiations and reinstate the loan if the homeowner would forgo further bankruptcy proceedings. The homeowner agreed to forgo further bankruptcy proceedings in reliance on the lender’s promise to negotiate a modification and reinstatement of his loan. After the bankruptcy stay on foreclosure was lifted, the lender never negotiated a modification of the loan and moved forward with foreclosure proceedings, selling the homeowner’s home at a trustee’s sale. The homeowner made a demand on the lender for his losses, claiming the lender was liable for his losses due to the foreclosure of his home since he acted in reliance on the lender’s promise that they would negotiate a modification and reinstatement of his loan. The lender claimed they could not be held liable for the homeowner’s losses since the lender did not enter into a written commitment for a loan modification with the homeowner and it was within the lender’s rights to foreclose on the homeowner’s home. A California court of appeals held the lender was liable for the homeowner’s losses due to the trustee’s sale since the homeowner acted in reliance on the lender’s oral promise to negotiate a modification and reinstatement of his mortgage when he abandoned his right to bankruptcy protection. [Aceves v. U.S. Bank (2011) 192 CA4th 218]