Case Number: KC067309    Hearing Date: January 05, 2015    Dept: J

Re: Arturo Alas v. CitiMortgage, Inc., et al. (KC067309)

ORDER TO SHOW CAUSE RE PRELIMINARY INJUNCTION

Moving Party: Plaintiff Arturo Alas

Respondents: Defendants CitiMortgage, Inc. and US Bank National Association

POS: Moving OK; Opposing OK

Plaintiff commenced this action alleging a wrongful foreclosure on 12/1/14, asserting causes of action for:

1. Violation of Homeowner’s Bill of Rights – CC §§ 2923.6 and 2924.11
2. Wrongful Foreclosure – Violation of CC § 2924
3. Fraudulent Misrepresentation
4. Negligent Misrepresentation
5. Promissory Estoppel
6. Negligence
7. Unfair Business Practices

The Case Management Conference is set for 4/23/15.

On 12/4/14, Plaintiff’s Ex Parte Application for Order to Show Cause and Temporary Restraining Order was granted. Plaintiff was ordered to personally serve Defendants with the Summons, Complaint, Ex-Parte papers, TRO and the OSC by 12/10/14.

Plaintiff Arturo Alas seeks a preliminary injunction restraining Defendants CitiMortgage, Inc., US Bank, N.A. and Quality Loan Service Corp. (collectively “Defendants”) from proceeding with a non-judicial foreclosure of Plaintiff’s home.

In deciding whether to issue a preliminary injunction, the court weighs two interrelated factors: the likelihood the moving party ultimately will prevail on the merits, and the relative interim harm to the parties from the issuance or nonissuance of the injunction. A trial court may not grant a preliminary injunction, regardless of the balance of interim harm, unless there is some possibility that the plaintiff would ultimately prevail on the merits of the claim. (Hunt v. Superior Court (1999) 21 Cal. 4th 984, 999-1000.) Proof of facts is ordinarily made by affidavits or declarations. (CCP § 2009.)

LIKELIHOOD OF SUCCESS ON THE MERITS:

Effective January 1, 2013, legislation entitled “The California Homeowner Bill of Rights” (“HBOR”) precludes loan servicers from foreclosing until after pre-modification and pre-foreclosure notices and review of loan-modification applications. Further, it requires a single point of contact for borrowers, and enables homeowners (1) to request injunctions against foreclosures pending compliance, (2) to obtain damages where violations were not corrected prior to the recordation of the trustee’s deed upon sale, and (3) to obtain penalties when servicers have filed multiple, inaccurate mortgage documents, or committed reckless or willful violations. (See CC § 2923.6.)

Lenders must send written notice when they deny a borrower’s application for a first lien loan modification. The notice must, among other things, identify the reasons for the denial, the amount of time the borrower has to appeal and any other available foreclosure prevention alternatives. (See CC § 2923.6(f).) If the borrower timely appeals, the mortgage servicer may not proceed with foreclosure until the later of (i) 15 days after the appeal is denied; (ii) 14 days after the borrower declines a modification offered following the appeal; or (iii) if the lender offers a modification after the appeal and the borrower accepts, the date on which the borrower fails to timely submit the first payment or otherwise breaches the offer’s terms. (See CC § 2923.6(e)(2).)

Plaintiff submits evidence that Defendants were seeking to foreclose on Plaintiff’s home while his loan modification application was still pending in violation of CC § 2923.6. (Application, Alas Decl.) Specifically, Plaintiff submits evidence that he submitted a complete application for a first lien loan modification in August 2014, and that this application is still pending. (Id. ¶¶ 10-14.)

Defendants, in opposition, submit evidence that they complied with all of the requirements of CC § 2923.6 prior to instructing the trustee to proceed with recording a Notice of Sale on November 12, 2014. Defendants submit the following evidence:

On September 11, 2014, CitiMortgage, Inc. (“Citi”) sent a letter to Plaintiff advising that his application for a loan modification under the Citi Supplemental Modification program and, separately, under the Home Affordable Modification program had been denied (“Denial Letter”). (Hackmann Decl. ¶¶ 3-4, Exh. A.) The Denial Letter advised Plaintiff of the reasons for the denials under each loan modification program. (Id. ¶ 5.) The Denial Letter also advised Plaintiff that he had 30 days from the date of the letter to contact Citi to request an appeal, provided instructions on how to appeal the denial, and advised Plaintiff of other foreclosure prevention alternatives. (Id. ¶¶ 6-7.) The Notice of Sale was then recorded on November 12, 2014, which is more than the required thirty-one days after Plaintiff was notified in writing of the denial.

Plaintiff fails to demonstrate that Defendant violated the HBOR. Plaintiff presents no evidence that he appealed the denial of his loan modification, or that an appeal was pending when the Notice of Sale was recorded. Thus, Plaintiff’s request for preliminary injunction is denied.