Facts: A homeowner took out a loan, executing a note secured by a trust deed, then later went into default. The trust deed along with all beneficial interest was assigned to a new lender, though the physical note was not assigned. The new lender filed a notice of default (NOD) and scheduled a trustee’s sale.
Claim: The homeowner sought to stop the trustee’s sale, claiming the new lender had no right to foreclose since it did not physically possess the note.
Counter claim: The new lender claimed physical possession of the note was not required to initiate foreclosure since ownership of the note, which automatically accompanied the assignment of the trust deed, is sufficient to establish the lender’s right to foreclose.
Holding: A California appeals court held the lender may foreclose since ownership of the note and authority to foreclose was transferred with the assignment, thus the lender did not need to physically possess the promissory note in order to initiate foreclosure.
Also at issue in this case:
Facts: A homeowner took out a home loan and later went into default. The lender filed a notice of default (NOD) and scheduled a trustee’s sale. The NOD did not list the lender’s address or telephone number, though it did list the servicer’s contact information.
Claim: The homeowner sought to stop the trustee’s sale, claiming the NOD was invalid since it lacked the lender’s address and telephone number.
Counter claim: The lender claimed the NOD was valid since the omission of the name and address did not affect the homeowner’s ability to avert foreclosure, as he could have contacted the loan’s servicer.
Holding: A California appeals court held the trustee’s sale may be held since the lack of the lender’s address and telephone number on the NOD did not affect the homeowner’s ability to stop the foreclosure. [Debrunner v. Deutsche Bank National Trust Company (2012) 204 CA 4th 433]
