Facts: A homeowner obtains a mortgage secured by a trust deed on their property which is subsequently assigned to a new mortgage holder. The owner later defaults on the mortgage and receives a Notice of Default (NOD) from a substitute trustee named on the notice. However, the new mortgage holder does not execute a substitution formally naming the trustee delivering the NOD as the substitute trustee until several weeks later. The owner fails to tender the required amounts and the property is sold at a nonjudicial foreclosure sale.

Claim: The owner seeks to nullify the foreclosure sale as void, claiming the new mortgage holder wrongfully foreclosed since the substitute trustee was not formally named as trustee when they delivered the NOD and did not have authority to commence foreclosure, thus breaking the chain of title.

Counter claim: The new mortgage holder claims the foreclosure sale is valid since the timing of the formal substitution of the trustee did not affect the trustee’s compliance with required foreclosure procedures or deprive the owner of the opportunity to cure the default and avoid foreclosure.

Holding: A California court of appeals holds the foreclosure sale was not void since the delayed substitution of the trustee was not a material defect that impaired the owner’s ability to cure the default and prevent foreclosure. [Ram v. OneWest Bank (February 6, 2015)_CA4th_]

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