Myles v. Pennymac Loan Services, LLC
Facts: An owner defaults on a mortgage secured by their residence. The original mortgage holder is closed by the federal government. Due to several mortgage transfers and assignments, foreclosure proceedings are not initiated. Several years later, the current mortgage holder assigns the mortgage to a loan servicer. The loan servicer begins nonjudicial foreclosure proceedings on the owner’s home.
Claim: The owner seeks to prevent the foreclosure, claiming the loan servicer lacked standing to initiate foreclose since the mortgage’s assignment to the loan servicer was rendered void by the owner’s default.
Counterclaim: The loan servicer seeks to proceed with the foreclosure, claiming the assignment is valid since the default status of the mortgage does not preclude a mortgage holder from assigning the mortgage to a different loan servicer.
Holding: A California appeals court holds the assignment is valid and the loan servicer may foreclose since the owner’s default does not preclude a mortgage holder from assigning the mortgage to a third party. [Myles v. Pennymac Loan Services, LLC (October 8, 2019)_CA6th_]
