2013-00152086-CU-OR

Doris Pittell vs. Ocwen Loan Servicing LLC

Nature of Proceeding:   Motion for Preliminary Injunction

Filed By:  Dudensing, Janice D.

Plaintiff’s application for preliminary injunction is ruled upon as follows. The OSC is
dissolved.

Defendants’ request for judicial notice is granted.  In taking judicial notice of the
recorded land documents, the court accepts the fact of their existence, not the truth of  their contents.  (Herrera v. Deutsche Bank Nat’l Trust Co. (2011) 196 Cal.App.4th
1366, 1375.)

This is an action for Violation of the Homeowners Bill of Rights and Breach of Contract.
Plaintiff alleges that Defendant Ocwen Loan Services violated the Homeowners Bill of
Rights by engaging in “dual tracking” (i.e. scheduling a Trustee’s Sale while a loan
modification is under review).  Plaintiff alleges that she entered into a written
agreement with Defendant OneWest Bank, FSB (and Ocwen as successor-in-interest
to the servicing rights of the subject loan) for a Trial Payment Plan (“TPP”) by which
her compliance would result in a permanent loan modification.  Plaintiff alleges that
Defendants breached the contract by refusing to permanently modify the loan and
simultaneously recording a Notice of Default.

A TRO was issued on October 16, 2013.  Plaintiff moves for a preliminary injunction
enjoining Ocwen, OneWest and its agents from foreclosing, selling or otherwise
encumbering the property located at 831 Commons Dr. Sacramento, California 95825.

CCP Section 527 generally authorizes a court to enter a preliminary injunction. “To
obtain a preliminary injunction, a plaintiff ordinarily is required to present evidence of
the irreparable injury or interim harm that it will suffer if an injunction is not issued
pending an adjudication of the merits. Past California decisions further establish that,
as a general matter, the question whether a preliminary injunction should be granted
involves two interrelated factors: (1) the likelihood that the plaintiff will prevail on the
merits, and (2) the relative balance of harms that is likely to result from the granting or
denial of interim injunctive relief.” (White v. Davis (2003) 30 Cal.4th 528, 554.)  An
injunction may not be granted, however, in the absence of a reasonable probability
that the plaintiff will prevail on the merits. ( Teachers Ins. & Annuity Ass’n v. Furlotti
(1999) 70 Cal.App.4th 1487, 1489.)

“[T]he party seeking the injunction must present sufficient evidentiary facts to establish
a likelihood that it will prevail.” (Tahoe Keys Property Owners’ Assn. v. State Water
Resources Control Board (1994) 23 Cal.App.4th 1459, 1478.)

A motion for preliminary injunction may be based on verified allegations or affidavits.
(CCP § 527(a).)  Here, Plaintiff has filed a verified complaint on which she bases her
motion.

In the verified complaint, Plaintiff alleges that in 2012 she struggled to make her
mortgage payments because her husband became terminally ill.  (Complaint, ¶ 7.)  As
a result she sought help from her mortgage servicer, OneWest.  (Id.)  OneWest
advised Plaintiff to fall three months behind on her mortgage to qualify for a loan
modification, which she did. (Id.)  Plaintiff thereafter requested a loan modification
package from OneWest.  (Id., ¶ 8.)  Plaintiff filled out the package and submitted
documents that OneWest requested. (Id.)  Her husband passed away in September
2012 and Plaintiff decided to pay the arrears on her loan.  (Id., ¶ 10.)  However,
Plaintiff was unable to make the monthly mortgage payments and again sought
assistance.  (Id., ¶ 11.)  She was told to fall behind on her payments, which she did,
and subsequently requested a loan modification. (Id.)  Plaintiff filled out the complete
loan modification application and OneWest confirmed receipt.  (Id.)  On April 3, 2013,
Plaintiff received a notification that she was qualified for a trial period payment plan
(“TPP”).   (Id. ¶ 12.)  Plaintiff made her first payment on May 1, 2013, however, her
second payment was returned.  (Id., ¶ 13.)  Plaintiff attempted to contact OneWest, but
was unsuccessful.  (Id.)  OneWest recorded a Notice of Default.  (Id.)  Thereafter,
Plaintiff received a notice that Ocwen was servicing her loan and was directed to fill
out a new loan modification application. (Id., ¶ 14.)  Simultaneously, Ocwen caused the
recordation of a Notice of Trustee’s Sale.  (Id.)  Plaintiff completed a loan modification
application and faxed it to Ocwen on October 2, 2013. (Id., ¶ 15.)  Ocwen refused to
cancel the Trustee’s Sale which was scheduled for October 18, 2013.  (Id. ¶ 17.)

Likelihood of Success on the Merits

Homeowners Bill of Rights

In opposition, Defendants argue that this claim fails because: (1) her application was
submitted after the notice of default and notice of sale were recorded, and (2) Plaintiff
has not established that her application was completed because the determination is
made by Ocwen.

Civ. Code §2923.6(c) provides that a loan servicer must not record a notice of default,
notice of sale, or conduct a Trustee’s Sale, while a complete first lien loan modification
is pending.  The loan servicer may record a notice of default or sale, or conduct a
Trustee’s Sale after it makes a written determination that the borrower is not eligible for
the first lien loan modification, and any appeal period has expired.

The Notice of Default was recorded on April 3, 2013.  (Defendants’ RJN, Ex. D.)  The
Notice of Sale was recorded on September 16, 2013. (Defendants’ RJN, Ex. E.)
Plaintiff submitted her loan modification application to Ocwen until at least October 2,
2013.  (Complaint, ¶ 15.)  Thus, according to Defendants, Plaintiff submitted her loan
modification to Ocwen after the Notice of Default and Notice of Sale had already been
recorded and there has been no violation of the Homeowners Bill of Rights.

The Court disagrees with Defendants.  Although Plaintiff may have submitted her loan
application after the notice of default and the notice of sale were recorded, Civ. Code
§2923.6(c) also prohibits Defendants from conducting a Trustee’s Sale while her
complete loan modification was pending.  Here, Plaintiff’s verified complaint states that
she completed her loan modification application and faxed it to Ocwen on October 2,
2013, but Ocwen refused to cancel the Trustee’s Sale scheduled for October 18, 2013.
(FAC, ¶¶ 15, 17.)  Moreover, Ocwen has not proffered evidence of a written
determination that Plaintiff is not eligible for a loan modification.  Indeed, in Plaintiff’s
reply, she submits an October 22, 2013 letter from Ocwen stating that “as a result of
the financial information” that she had already provided; Ocwen was offering a Home
Affordable Modification Program – Trial Period Plan.

To the extent Defendants argue that Plaintiff did not submit a completed loan
application, Defendants have not proffered any evidence that they notified Plaintiff that
the loan package was incomplete or that she needed to provide more documents.

Given the above, the Court finds that for the purposes of this motion only, Plaintiff has
demonstrated a likelihood of prevailing on her Homeowners Bill of Rights cause of
action.

Balance of the Harms

The Court agrees that Plaintiff will undoubtedly suffer great injury if her residence is
sold.  Accordingly, the relevant factors favor Plaintiff, and the court will grant the
motion for preliminary injunction.

Accordingly, the motion for preliminary injunction is GRANTED.  The TRO is
VACATED.

No later than December 11, 2013, Plaintiff is directed to lodge a formal order for the
court’s signature and post an undertaking in the amount of $10,000. (CCP § 529(a);
CRC 3.1150(f).) The TRO shall remain in effect until the court enters the preliminary
injunction but in any case shall dissolve no later than 5:00PM on December 13, 2013.