The residential mortgage foreclosure crisis continues to grind onward across California resulting in the eviction of thousands of Californians from their homes. Even as numerous banks, including the largest in the United States, have paid billions of dollars in fines and penalties for their unlawful actions, they relentlessly pursue unlawful foreclosures and evictions from the most vulnerable Californians. In the process, California homeowners have collectively lost billions and billions of dollars of value in the largest assets many of them will ever own, their primary residences, and nobody seems to care.
In the wake of this news, Finkel Law Group is pleased to report a positive result in a civil case we filed on behalf of the proverbial “little old lady” from Livermore who faced foreclosure and eviction by one of the biggest banks operating in the United States.
In September 2009, we filed suit on our client’s behalf against a large money center bank and its wholly-owned subsidiary trustee in Alameda County Superior Court, the Honorable George C. Hernandez presiding. In conjunction with seeking and receiving a preliminary injunction from the court enjoining the foreclosure for the duration of the trial, we filed a multi-claim complaint against the lender and trustee for a variety of statutory violations and common law claims.
First we sought to enjoin the unlawful sale of our client’s home by the lender and trustee under the appropriate provisions of the Civil Code. Second, we sought to impose liability on the defendants under a variety of common law claims for their repeated and unrepentant unlawful actions to throw her out of her home. Third, we sought to recover compensatory and exemplary damages from the defendants for their repeated despicable actions.
The complaint alleged that the defendants violated several provisions of the California Civil Code pertaining to residential mortgage foreclosure laws, including failure to meet and confer with the homeowner to discuss her financial situation and explore options to avoid foreclosure before filing a notice of default; failure to accept the homeowner’s tender of the amounts owing under the mortgage so she could cure the default, reinstate the mortgage, and terminate the foreclosure; and failure to provide a proper notice of trustee’s sale before commencing the foreclosure. The complaint also included an additional claim under the Civil Code for taking unconscionable advantage of a homeowner when her home is in foreclosure. The complaint finally included common law claims for negligence, fraud and deceit, infliction of emotional distress, unfair business practices, and accounting.
We litigated these claims against a bank that in the last two years has paid the U.S. Department of Justice and several states’ attorneys general more than $20 billion in fines and penalties. After more than four years of litigation, innumerable discovery battles, the imposition of thousands of dollars of monetary sanctions against the defendants for discovery misuse, the appointment of a referee paid entirely by the defendants, and a looming trial date scheduled for this summer, the defendants finally cried, “uncle” and decided to settle with the little old lady from Livermore.
The key to the case was requesting and ultimately receiving pattern and practice discovery on exactly how the bank and trustee were treating not just our client, but all California homeowners against whom the defendants were pursuing foreclosure. Without the court’s repeated discovery orders instructing the bank and trustee to produce this information – and the imposition of thousands of dollars in sanctions and referee’s fees for its failure to do so – we would not have been able to secure as favorable result as we did for our client. The defendants were simply too big, too brash, and too well funded.
Under the settlement Finkel Law Group negotiated for our client the bank agreed to reduce the principal balance owing on the mortgage by close to $250,000. The bank further agreed to extend the term of the note to 40 years, and reduced the interest rate to 2 percent for all purposes, including in the event of a default. The bank finally agreed to pay the little old lady from Livermore $200,000 to settle all of her claims.