victory!! calfornia man stops a foreclosure using the new california homeowner bill of rights (hobr)...

7/30/2019 VICTORY!! CALFORNIA MAN STOPS A FORECLOSURE USING THE NEW CALIFORNIA HOMEOWNER BILL OF RIGHTS (

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Aldon L. Bolanos, Esq., SBN. 233915Law Offices of Aldon L. Bolanos, Esq.Sacramento, CA 95814PH. 916.446.2800FX. 916.446.2828www.aldonlaw.com

Attorneys for Plaintiff Kevin SINGH

United States District Court

Eastern District of California

Kevin SINGH,

Plaintiff,

vs.

Bank of America, N.A.,RecontrustCompany, N.A.,

Defendants.

Case No. 2:13-CV-00729-MCE-AC

Application for PreliminaryInjunction

Date: April 29, 2013Time: 10:00 a.m.Ctrm: 7

1. Prefatory Statement

Plaintiff Kevin Singh, through his counsel, hereby

applies for a preliminary injunction to prevent the

sale of his home during the pendency of this action.

The basis for this application is that defendant

is engaging in wrongful foreclosure proceedings in

violation of the California Homeowners Bill of Rights.

Specifically, Mr. Singh is the victim of dual

Case 2:13-cv-00729-MCE-AC Document 14 Filed 04/25/13 Page 1 of 9


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tracking in which a lender engages in loan

modification negotiations while at the same time moving

toward a non-judicial foreclosure sale.

Previously the Court granted a temporary

restraining order to prevent the sale of the home,

which had been scheduled for April 22, 2013. Now, the

home sale has been rescheduled for May 20, 2013. See

Bolanos Declaration, concurrently filed.

In light of the above, immediate judicial

intervention is required in order to preserve the

status quo pending Mr. Singhs case being decided on

its merits.

2. Legal Standard

In determining whether the grant a preliminary

injunction, the court balances the respective equities

of the parties and concludes that pending trial on the

merits, the defendant should or should not be

restrained from exercising the right claimed by him.

Continetal Banking v. Katz, 68 Cal. 2d 512, 528. The

general purpose of such an injunction is preservation

of the status quo until a final determination of the

merits of the action. Id., citingStewart v. Superior

Court, (1893) 100 Cal. 543, 545. Thus, the courtexamines all of the material before it in order to

consider whether a greater injury will result to the

defendant from granting the inunction than to the

plaintiff from refusing it. Id.



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In making that determination the court will

consider the probability of the plaintiffs ultimately

prevailing in the case and will deny the preliminary

injunction unless there is a reasonable probability

that plaintiff will be successful in the assertion of

his rights. Id. In the last analysis, the trial

court must determine which party is the more likely to

be injured by the exercise of its discretion. Id.,

citingFamily Record Plan, Inc. v. Mitchell (1959) 172

Cal. App. 2d 235, 242.

Here, the court looks to the law at issue:

Californias Homeowners Bill of Rights. That law

provides that It is the intent of the Legislature that

the mortgage servicer offer the borrower a loan

modification or workout plan if such a plan is

consistent with its authority. California Civil Code

2923.6(b). If a borrower submits financials toward a

loan modification effort, then the

servicer/beneficiary/bank shall not conduct a trustees

sale while the application is pending and the servicer

must make a written determination that the borrower is

ineligible. Civil Code 2923.6(c).

Also under this new law, the mortgage servicer

must establish a single point of contact and provideone or more direct means of communication with the

single point of contact. Civil Code 2923.7(a). That

contact shall be responsible for communicating the

process for foreclosure prevention alternatives and



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coordinating receipt of all documents associated with

same. Id. at (b)(1). Further, that point of contact

shall have access to all current information and timely

provide same to adequately inform the borrower. Id.,

(b)(2) and (3).

Finally, the lender/servicer is required to inform

the borrower in writing that the modification proposal

has been rejected or is no longer being considered

before it may proceed with foreclosure. Civil Code

2923.6(b).

The principles of equity apply to foreclosure

sales. Equity does not allow one to take advantage of

his own wrong nor will it assist in perpetration of

fraud on another or the public. Bowman v Bowman, 125

Cal. App. 602 (1932). A party cannot take advantage of

his own fault or wrong. Archibald Estate v. Matteson,

5 Cal. App. 441 (1907) Courts may set aside a

foreclosure sale when there has been fraud, when the

sale has been improperly, unfairly, or unlawfully

conducted, or when there has been such a mistake that

it would be inequitable to let stand. Bank of America

Nat. Tmst & Savings Ass'n v. Reidy, 15 Cal 2d 243, 248

(1940); Whitman v. Transtate Titie Co. , 165 Cal.App.3d312, 322-323 (1985).



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3. Legal Analysis

As stated in the concurrently-filed declaration of

Mr. Singh, as well as the Verified Complaint herein,

Mr. Singh has been residing at his home with his wife

and three children since 2005. He initially defaulted

on his loan during the fallout from the Great Recession

of 2008. Subsequently, Mr. Singh sought bankruptcy

protection under Chapter 7. That bankruptcy was

discharged on December 14, 2012.

A. Plaintiff is Likely to Prevail On The Merits

Regardless, during approximately the past year,

Mr. Singh and Bank of America have been actively

involved in loan modification negotiations. These

essentially took the form of requests for information

by Bank of America, timely responses by Mr. Singh

providing the requested information, then a period of

inaction, then follow-up communications from Mr. Singh,

then any one of a litany of excuses from the bank for

why the papers were not processed or the information

needed to be resubmitted. Then the cycle would begin

anew.

Most importantly, Mr. Singh was never provided

with anything in writing from Bank of America that ithad ceased considering him for a modification, or that

it had rejected or denied the modification. This runs

categorically afoul of the Homeowners Bill of Rights,

codified at California Civil Code 2923.6(b).



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Under these facts, and as set forth in the

California law quoted above, the banks actions are

clearly violative of the Homeowners Bill of Rights.

This is because they constitute dual tracking by

utilizing the deceptive shell game tactic of providing

a borrower with multiple points of contact and

proceeding with foreclosure without first informing the

borrower that modification efforts have proven

fruitless. Thus, under the clear meaning of

California law and the facts presented, plaintiff has

demonstrated a clear probability of prevailing on the

merits.

B. The Balance of Equities Tips Sharply Toward

Plaintiff

In this matter the relative hardship to Ms. McVey

- losing his family home - represents irreparable

injury, decreasing Ms. McVeys requirement of showing a

probability of success on the merits. The loss

of one's property due to foreclosure unquestionably

constitutes an irreparable injury. Demarest v

Quick Loan Fund, Inc. 2009 WL 940377 (CD. Cal 2009);

Wrobel v. S.L. Pope & Associates, 2007 WL 2345036 at 1

(S.D. Cal 2007) ("Losing one's home through foreclosureis an irreparable injury."), Bland v Carone Family

Trust, 2007 WL 951344, at 2 (S.D. Cal.2007).

Numerous courts have found this injury enough by itself

to mandate preliminary injunctive relief See, e.g.



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Nichols v. Deutsche Bank Nat. Trust Co., 2007 WL

4181111, at 2 (S.D. Cal.2007); United Church of Med.

Ctr. v. Med Ctr. Comm. 'n, 689 F 2d 693, 701 (7"" Cir.

1982); Johnson v. U.S. Dept. of Agriculture, supra, at

789.

Here, the balance of equities tips heavily in

favor of Mr. Singh. This is due in no small part to

the fat that the Great Recession also threatened to

claim a number of banks, including Bank of America.

However, our federal government provided Bank of

America with $45 billion dollars to prevent it from

sliding into insolvency. Since thirty-three cents of

every dollar Kevin Singh earned went to our federal

government in the form of tax, it stands to reason that

in a very real sense, Mr. Singh paid to save Bank of

America when our economy experienced turbulence.

Moreover, if plaintiff fails to receive an

injunction and his home is sold, it will be an

unmitigated disaster for himself and his family. Mr.

Singh, his wife, and their three young children would

be rendered homeless. Also, Mr. Singh runs his

painting business through the garage of his home.

Thus, if he is ejected it would spell the end of the

business and the only means by which Mr. Singh cansupport himself and his family. See Singh Declaration,

concurrently filed.

C. No Bond Should Be Required



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Courts have broad discretion in determining the

amount of a bond. See Connecticut Gen. Life Ins Co. v.

New Images of Beverly Hills, 321 F.3d 878, 882 (9th

Cir.2003). The Court may dispense with the filing of a

bond when it concludes there is no realistic likelihood

of harm to the Defendant from enjoining his or her

conduct." Jorgensen v. Cassidy, 320 F.3d 906, 919 (9th

Cir. 2003).

Here, there is no realistic harm to Defendants

from a restraint of the foreclosure proceedings and

trustees sale. If the Defendants' position that the

loans were valid correct, then the loans are adequately

by the very property in question; additional security

if neither appropriate nor warranted. Phleger v.

Countrywide Home Loans, Inc., 2007 WL 4105672 at 6

(N.D. Cal. 2007). A bond is neither necessary nor

required in this case. If a bond is necessary, Mr.

Singh prays that the bond be set at one dollar ($1.00).

D. Notice

With respect to notice, as detailed in the

accompanying declaration of Aldon L. Bolanos, Esq.,

exhaustive efforts were made to put the bank on notice

of these proceedings. This included hand-deliveringthe documents to the local branch manager, several

blocks from the federal courthouse. They also include

providing the documents to opposing counsel at the

Bryan Cave law firm, which telephoned plaintiffs



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counsel and stated it represented Bank of America in

these proceedings. Finally, the documents were faxed

to the Home Loan Team at Bank of Americas Houston

office, using a fax number provided again in the banks

own correspondence to Mr. Singh. Thus, it is clear

that all reasonable and diligent efforts were made to

ensure that the bank was on notice of this proceeding.

4. Conclusion

Mr. Singh has shown irreparable harm and a

likelihood of prevailing on the merits, given what

appears to be a clear violation of California law.

Additionally, he has made exhaustive efforts to inform

the defendant of this hearing. For this reason, it is

respectfully submitted that he has met his burden and

satisfied the requirements for a Temporary Restraining

Order as set forth in the applicable case law and this

courts own local rules.

Respectfully Submitted,

Law Offices of Aldon L. Bolanos

Dated: April 24, 2013

By: /s/ Aldon L. Bolanos, Esq.

Attorney for Plaintiff



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1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

KEVIN SINGH,

Plaintiff,

v.

BANK OF AMERICA, N.A.,RECONTRUST COMPANY,

Defendant.

No. 2:13-cv-00729-MCE-AC

MEMORANDUM AND ORDER

On April 16, 2013, Kevin Singh (Plaintiff) filed an Application for Temporary

Restraining Order (TRO) seeking a Court order preventing Bank of America

(Defendant) from selling Plaintiffs home on April 22, 2013. (ECF No. 5.) Prior to the

TRO hearing, the Court ordered Plaintiffs counsel to notify all other parties of the

hearing and file proof of notice. (ECF No. 7.) Plaintiffs counsel complied and filed a

Notice of Hearing, but Defendants failed to appear at the April 17, 2013, hearing. (ECF

No. 8.) In open court and on the record, the Court granted Plaintiffs request for a TRO,

which will remain in effect until the date of the hearing for a Preliminary Injunction which

is set forApril 29, 2013 at 10:00 AM. The Court granted Plaintiffs Request for the TRO

for the reasons described below.

///



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2

STANDARD

The purpose of a temporary restraining order is to preserve the status quo

pending the complete briefing and thorough consideration contemplated by full

proceedings pursuant to a preliminary injunction. See Granny Goose Foods, Inc. v.

Teamsters, 415 U.S. 423, 438-39 (1974) (temporary restraining orders should be

restricted to serving their underlying purpose of preserving the status quo and preventing

irreparable harm just so long as is necessary to hold a hearing, and no longer); see also

Reno Air Racing Assn., Inc. v. McCord, 452 F.3d 1126, 1131 (9th Cir. 2006); Dunn v.

Cate, No. CIV 08-873-NVW, 2010 WL 1558562, at *1 (E.D. Cal. April 19, 2010).

Issuance of a temporary restraining order, as a form of preliminary injunctive

relief, is an extraordinary remedy, and Plaintiffs have the burden of proving the propriety

of such a remedy. See Mazurek v. Armstrong, 520 U.S. 968, 972 (1997). In general,

the showing required for a temporary restraining order and a preliminary injunction are

the same. Stuhlbarg Intl Sales Co., Inc. v. John D. Brush & Co., Inc., 240 F.3d 832, 839

n.7 (9th Cir. 2001).

The party requesting preliminary injunctive relief must show that he is likely tosucceed on the merits, that he is likely to suffer irreparable harm in the absence of

preliminary relief, that the balance of equities tips in his favor, and that an injunction is in

the public interest. Winter v. Natural Resources Defense Council, 555 U.S. 7, 20

(2008); Stormans, Inc. v. Selecky, 586 F.3d 1109, 1127 (9th Cir. 2009) (quoting Winter).

The propriety of a TRO hinges on a significant threat of irreparable injury that must be

imminent in nature. Caribbean Marine Serv. Co. v. Baldridge, 844 F.2d 668, 674 (9th

Cir. 1988).

///

///

///

///



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3

Alternatively, under the so-called sliding scale approach, as long as the Plaintiffs

demonstrate the requisite likelihood of irreparable harm and show that an injunction is in

the public interest, a preliminary injunction may issue so long as serious questions going

to the merits of the case are raised and the balance of hardships tips sharply in Plaintiffs

favor. Alliance for Wild Rockies v. Cottrell, 632 F.3d 1127, 1131-36 (9th Cir. 2011)

(concluding that the serious questions version of the sliding scale test for preliminary

injunctions remains viable after Winter).

ANALYSIS

Plaintiff owns real property and improvements thereon located in West

Sacramento, California, which is located within the Eastern District of California

(hereinafter referred to as the property unless specified otherwise). The property was

purchased by Plaintiff with a loan obtained through Defendant and evidenced by a

promissory note. (ECF No. 5-2.) The promissory note is secured by a deed of trust

which is recorded against the property. Plaintiff defaulted on the loan in 2008. (Id.) In

2012, Plaintiff and Defendant began negotiating a modification of the loan that wouldallow plaintiff to remain current on his obligation. (Id.) During the negotiations, Plaintiff

provided Defendant detailed information about Plaintiffs financial situation in exchange

for the possibility of a lower monthly payment and interest rate. As stated in open court

at the TRO hearing, Defendant has not made a written determination as to whether

Plaintiff qualifies for a loan modification. (Id.) Instead, Defendant has repeatedly failed

to respond to Plaintiffs inquiries about the status of the loan modification with passing

the buck by bank representatives, who transferred his calls repeatedly to different people

in different departments within the bank. (ECF No. 1.) Even though Plaintiff and

Defendant were negotiating a loan modification, Defendant went ahead with the

foreclosure process.

///



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4

Defendant and other lenders practice of negotiating with homeowners in default

on their loans for a loan modification while simultaneously advancing the foreclose

process is commonly referred to as dual tracking. Dual tracking has been heavily

criticized by both state and federal legislators. In July 2012, California passed legislation

referred to as The California Homeowner Bill of Rights which prohibits dual tracking.

As of January 1, 2013, The California Homeowner Bill of Rights went into effect and it

offers homeowners greater protection during the foreclosure process. Cal. Civ. Code

2923.6(b) (2013). Section 2923.6(b) states it is the intent of the legislature that the

mortgage servicer offer the borrower a loan modification or work out a plan if such a

modification or plan is consistent with its contractual or other authority. The statute

further provides that if a borrower submits a complete application for a first lien loan

modification . . . the mortgage servicer . . . shall not record a notice of default or notice of

sale, or conduct a trustees sale, while the complete first lien loan modification

application is pending. Cal. Civ. Code 2923.6(c) (2013).

At the hearing, the Court inquired of Plaintiffs counsel whether Defendant ever

responded to Plaintiffs complete application for a first lien loan modification. Plaintiff

submitted a Declaration which stated in part, I never received written notice orconfirmation or anything whatsoever to state or indicate that I did not qualify for a loan

modification. (ECF No. 10.) Because Defendant has failed to respond to Plaintiffs

application for a first lien loan modification after January 1, 2013, section 2923.6 applies

to this case and prevents Defendant from conducting a trustees sale while Plaintiffs

application for a first lien loan modification is pending.

Accordingly, Plaintiff has adequately shown he is likely to succeed on the merits

in light of Californias new Homeowners Bill of Rights. Plaintiff has also met the

remaining factors of the TRO standard. Plaintiff has demonstrated that Plaintiff will

suffer irreparable harm if he loses his home because [he] and [his] family will have

nowhere to go and nowhere to stay. . . [his] children will need to leave their schools.

(ECF No. 5-2.)



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5

Further, the balance of equities tips in Plaintiffs favor as a TRO merely delays

Defendants right to foreclose. Finally, an injunction is in the publics interest as it

enforces a recently enacted law designed to protect the public.

CONCLUSION

Accordingly, to preserve the status quo until the hearing on Plaintiffs Motion for

Preliminary Injunction can be had, the Court now orders Defendant to cancel the sale

scheduled to take place on April 22, 2013. A hearing on Plaintiffs Motion for Preliminary

Injunction is hereby scheduled at 10:00 AM on Monday, April 29, 2013, in Courtroom 7

before Chief Judge Morrison C. England, Jr. Plaintiffs Motion shall not be filed later than

April 24, 2013 and Defendants Opposition shall be filed not later than April 25, 2013.

Any reply shall be filed not later than April 26, 2013.

IT IS SO ORDERED.

DATE: April 24, 2013


___________________________________________

MORRISON C. ENGLAND, JR., CHIEF JUDGE



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Aldon L. Bolanos, Esq., SBN. 233915Law Offices of Aldon L. Bolanos, Esq.Sacramento, CA 95814PH. 916.446.2800FX. 916.446.2828www.aldonlaw.com

Attorneys for Plaintiff Kevin SINGH

United States District Court

Eastern District of California

Kevin SINGH,

Plaintiff,

vs.

Bank of America, N.A.,RecontrustCompany, N.A.,

Defendants.

Case No.

Verified Complaint for Damagesand Injunctive Relief

Jury Trial Demanded

1. Plaintiff Kevin SINGH (Plaintiff or Mr. Singh)

brings this complaint for damages due to dual

tracking and other violations of the California

Homeowners Bill of Rights by defendants Bank of

America N.A., (Bank of America) and Recontrust

Company, N.A. (Recontrust). Jurisdiction is proper

because this case involves an amount at issue greater

than seventy-five thousand dollars, and there exists

complete diversity as between the parties to this suit.



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2. Plaintiff Mr. Singh took out a loan from Bank of

America on October 24, 2005. The loan is secured by a

promissory note and deed of trust against his home at

2544 Pheasant Hollow Drive, West Sacramento, Count of

Yolo, State of California, APN 045-751-006, within this

judicial district.

3. Plaintiff defaulted on this loan when his business

faltered after the Great Recession of 2008.

4. Beginning on September 13, 2012, Bank of America

initiated negotiations with Mr. Singh toward a loan

modification. By letter written on that date, the bank

requested certain specific information and provided a

deadline to provide that information.

5. Mr. Singh provided the requested information

within the specified timeframe. However, he never

received any confirmation from the bank regarding the

next step in the negotiations. Instead, his repeated

inquiries were met with passing the buck by bank

representatives, who transferred his calls repeatedly

to different people in different departments within

the bank. Ultimately, the response he would receive

was that he needed to resubmit the requested

information, as it had gotten stale by the passage of

time.6. Then again on December 7, 2012, a day that will

live in infamy, Bank of America continued negotiations

with Mr. Singh toward a modification of the home loan.

Indeed, in a letter from bank representative Larry Hall



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written on that date, the bank states that We are

pleased to let you know that you meet the criteria

requiredfor a new modification program recently

announced as a result of the U.S. Department of Justice

and State Attorneys General national settlement.

7. The letter goes on to detail what information is

needed from Mr. Singh and the deadline to receive the

information. Again, Mr. Singh provided all the

required information within the stated timeframes and

again, no response or progress was made, and yet again

his numerous entreaties and pleas for information were

met with the functional equivalent of stonewalling and

the classic run around until he was ultimately

informed that the information provided, which was time-

sensitive, had again become stale, requiring him to

resubmit same.

8. Mr. Singh participated in the charade of re-

submitting the same information requested by the bank

no fewer than seven times.

9. In response, all he received were excuses and

statements that the information had been lost,

misplaced, or was being handled by someone else in a

different department who would ultimately respond once

the paperwork was ready.10. Of course the paperwork never would be ready.

Instead, on March 29, 2013, defendant, through its

third party agent and wholly-owned subsidiary

Recontrust Company, N.A. (Recontrust), caused to be



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delivered by certified mail a Notice of Trustees Sale.

The Notice of Trustees Sale states the home will be

sold at auction onApril 22, 2013.

11. The real property, like all real property, is

unique and special to plaintiff such that money damages

and legal remedies will be insufficient to compensate

him for the loss of his home.

12. Mr. Singh is informed and believes and based

thereon alleges that the bank and its wholly-owned

subsidiary Recontrust have been at all times engaged in

a shell game. The game essentially involved stringing

Mr. Singh along with promises of

refinance/modification, and requests for information,

all the while moving intently and purposefully toward a

foreclosure on his family home.

13. Mr. Singh relied to his detriment on this shell

game in the sense that he did not seek alternatives to

refinancing with Bank of America, such as short sale,

refinancing elsewhere, or the like. Regardless, as set

forth below defendant Bank and its agent Recontrust had

and have a duty under California law to negotiate in

good faith and to not engage in the prohibited and

deceitful practice of dual tracking the home loan

modification process with foreclosure proceedings.

///



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First Cause of Action: Violations of the

Homeowners Bill of Rights

14. The recently-enacted California law called the

Homeowners Bill of Rights States: It is the intent of

the Legislature that the mortgage servicer offer the

borrower a loan modification or workout plan if such a

plan is consistent with its authority. California

Civil Code 2923.6(b). If a borrower submits

financials toward a loan modification effort, then the

servicer/beneficiary/bank shall not conduct a trustees

sale while the application is pending and the servicer

must make a written determination that the borrower is

ineligible. Civil Code 2923.6(c).

15. Here, Mr. Singh has been actively engaged in loan

modification negotiations with the bank while the bank

and its third party wholly-owned subsidiary have been

taking the necessary steps to conduct a trustees sale.

This is in direct violation of the California

Homeowners Bill of Rights.

16. Also under this new law, the mortgage servicer

must establish a single point of contact and provide

one or more direct means of communication with the

single point of contact. Civil Code 2923.7(a). That

contact shall be responsible for communicating theprocess for foreclosure prevention alternatives and

coordinating receipt of all documents associated with

same. Id. at (b)(1). Further, that point of contact

shall have access to all current information and timely



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provide same to adequately inform the borrower. Id.,

(b)(2) and (3).

17. Here, one of Mr. Singhs primary problems is that

he cannot obtain a straight answer from any of the

banks myriad number of purported representatives.

Instead he has been shuttled from one department

within the monolithic corporate structure to the next,

and invariably the path of communication leads to a

wall of frustration. This is a primary wrong that the

new California law was meant to right.

Second Cause of Action:

Declaratory Relief

18. Under California law, it is well-settled that real

property is unique and that the legal remedy of money

damages would be insufficient to compensate Mr. Singh

if his home is taken from him. Stockton vs. Newman

(1957) 148 CA 2d 558, andDaniels vs. Williams, 125 CA

2d 310.

19. Here, Mr. Singh is in danger of being deprived of

his home by foreclosure sale on April 22, 2013.

Therefore, immediate action is required to prevent this

harm. He respectfully requests an injunction

preventing the sale of his home until such time as hiscase is heard and adjudicated on its merits.

///



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PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays judgment against

defendant as follows:

1. For General damages according to proof;

2. For Special damages according to proof;

3. For declaratory relief that Plaintiff is

entitled to title in the property free from any

security interest;

4. For an equitable accounting of the alleged

indebtedness;

5. For prejudgment interest as allowed by law;

6. For attorneys fees;

7. For costs of suit;

8. For such other and further relief as the court

may deem proper.

Dated: April 11, 2013

Law Offices of Aldon L. Bolanos, Esq.

/s/ Aldon L. Bolanos, Esq.

Aldon L. Bolanos, Esq.Attorney for Plaintiff Kevin Singh

Verification

I, Kevin Singh, am the plaintiff in this action. I

have read and reviewed this complaint for damages and

injunctive relief and know it to be true of my ownpersonal knowledge. I have provided my attorney with

an original of my signature which he has in his

possession. I declare same on penalty of perjury under

the laws of the United States.

/s/ Kevin Singh



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1


EASTERN DISTRICT OF CALIFORNIA

KEVIN SINGH,

Plaintiff,

v.

BANK OF AMERICA, N.A.,RECONTRUST COMPANY,

Defendant.

No. 2:13-cv-00729-MCE-AC

MEMORANDUM AND ORDER

On April 15, 2013, Kevin Singh (Plaintiff) filed this action against Bank ofAmerica (BoA) and ReconTrust. Plaintiffs Complaint alleges BoA engaged in loan

modification discussions with Plaintiff while ReconTrust simultaneously advanced the

foreclosure process in contravention of Californias Homeowners Bill of Rights. On

April 17, 2013, the Court granted Plaintiffs Application for Temporary Restraining Order

(TRO) preventing Defendant from selling Plaintiffs home on April 22, 2013. (ECF

Nos. 9, 11). On April 29, 2013, the Court held a preliminary injunction hearing. At issue

was whether Defendant should be enjoined from foreclosing on Plaintiffs home

throughout the litigation. At the hearing, the Court orally GRANTED Plaintiffs

Application for a Preliminary Injunction for the reasons described below. (ECF No. 14.)

///

///



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2

BACKGROUND

ReconTrust is a subsidiary of BoA. ReconTrust provides mortgage default

services to BoA. Plaintiff owns real property and improvements thereon located in West

Sacramento, California, which is located within the Eastern District of California

(hereinafter referred to as the property unless specified otherwise). The property was

purchased by Plaintiff with a loan obtained through BoA and evidenced by a promissory

note. (ECF No. 5-2.) The promissory note is secured by a deed of trust which is

recorded against the property. Plaintiff defaulted on the loan in 2008. (Id.) In 2012,

Plaintiff and BoA began negotiating a modification of the loan that would allow plaintiff to

remain current on his obligation. (Id.) During the negotiations, Plaintiff provided BoA

detailed information about Plaintiffs financial situation in exchange for the possibility of a

lower monthly payment and interest rate. BoA has not made a written determination as

to whether Plaintiff qualifies for a loan modification. (ECF No. 10.) Even though Plaintiff

and BoA were negotiating a loan modification, ReconTrust went ahead with the

foreclosure process.

ANALYSIS

A preliminary injunction is an extraordinary remedy, and Plaintiffs have the burden

of proving the propriety of such a remedy by clear and convincing evidence. See

Granny Goose Foods, Inc. v. Brotherhood of Teamsters & Auto Truck Drivers, 415 U.S.

423, 442 (1974). The party requesting preliminary injunctive relief must show that he is

likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence

of preliminary relief, that the balance of equities tips in his favor, and that an injunction is

in the public interest. Winter v. Natural Resources Defense Council, 555 U.S. 7, 20

(2008); Stormans, Inc. v. Selecky, 586 F.3d 1109, 1127 (9th Cir. 2009) (quoting Winter).

///



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3

Plaintiffs Complaint alleges that the Court has diversity jurisdiction. In

Defendants Opposition, Defendant argues the Court does not have jurisdiction to hear

this suit because the parties are not completely diverse. (ECF No. 16.) Under 28 U.S.C

1332(a), diversity jurisdiction exists where the amount in controversy exceeds $75,000

and no defendant party shares citizenship in the same state as Plaintiff. Exxon Mobil

Corp. v. Allapattah Servs., Inc. 545 U.S. 546, 553 (2005) (citing Strawbridge v. Curtiss,

3 Cranch 267, 2 L. Ed. 435 (1806)). Article III courts are courts of limited jurisdiction,

and are presumptively without jurisdiction over civil actions. Kokkonen v. Guardian Life

Ins. Co. of Am., 511 U.S. 375, 377 (1994). The burden of establishing the contrary rests

upon the party asserting jurisdiction. Id. In BoAs Opposition and at the hearing, BoAs

counsel asserted that ReconTrust is a citizen of California which destroys the complete

diversity citizenship requirement under 28 U.S.C., section 1332(a). At the hearing, the

Court expressed concern over BoAs lack of admissible proof that ReconTrusts main

office is located in California. Regardless, Plaintiff agreed to dismiss Defendant

ReconTrust within two days of the hearing to prevent the Court from dismissing the

entire case for lack of subject matter jurisdiction. On April 30, 2013, Plaintiff filed a

Notice of Voluntary Dismissal. (ECF No. 21.) Now, Bank of America, a citizen of NorthCarolina, is the remaining Defendant and it is diverse from Plaintiff, a citizen of

California. Thus, the Court has diversity jurisdiction to hear this case.

BoA and other lenders practice of negotiating with homeowners in default on their

loans for a loan modification while simultaneously advancing the foreclose process is

commonly referred to as dual tracking. Dual tracking has been heavily criticized by

both state and federal legislators. In July 2012, California passed legislation referred to

as The California Homeowner Bill of Rights which prohibits dual tracking. As of

January 1, 2013, The California Homeowner Bill of Rights went into effect and it offers

homeowners greater protection during the foreclosure process. Cal. Civ. Code

2923.6(b) (2013).

///



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4

Section 2923.6(b) states it is the intent of the legislature that the mortgage servicer offer

the borrower a loan modification or work out a plan if such a modification or plan is

consistent with its contractual or other authority. The statute further provides that if a

borrower submits a complete application for a first lien loan modification . . . the

mortgage servicer . . . shall not record a notice of default or notice of sale, or conduct a

trustees sale, while the complete first lien loan modification application is pending. Cal.

Civ. Code 2923.6(c) (2013).

At the preliminary injunction hearing, Plaintiff maintained that BoA never

responded to Plaintiffs complete application for a first lien loan modification. BoA does

not dispute Plaintiffs assertion. Neither Plaintiff nor BoA provided the Court with any

new evidence at the preliminary injunction hearing. Because BoA has failed to respond

to Plaintiffs application for a first lien loan modification after January 1, 2013, section

2923.6 applies to this case and prevents BoA from conducting a trustees sale while

Plaintiffs application for a first lien loan modification is pending.

Accordingly, Plaintiff has adequately shown he is likely to succeed on the merits

in light of Californias new Homeowners Bill of Rights. Plaintiff has also met the

remaining factors of the preliminary injunction standard. Plaintiff has demonstrated thatPlaintiff will suffer irreparable harm if he loses his home because [he] and [his] family

will have nowhere to go and nowhere to stay. . . [his] children will need to leave their

schools. (ECF No. 5-2.) Further, the balance of equities tips in Plaintiffs favor as a

TRO merely delays Defendants right to foreclose. Finally, an injunction is in the publics

interest as it enforces a recently enacted law designed to protect the public.

BoA asked the Court to order Plaintiff to make $2,700 monthly bond payments if

the Court granted Plaintiffs Application for a Preliminary Injunction. (ECF No. 16.)

Federal Rule of Civil Procedure 65(c) states the court may issue a preliminary injunction

orderonly if the movant gives security in an amount that the court considers proper to

pay costs and damages sustained by any party found to have been wrongfully enjoined

or restrained. (Emphasis added.)



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In light of Rule 65, the Court orders Plaintiff to post a $1,000 bond within seven days of

the date of the preliminary injunction hearing.

CONCLUSION

Accordingly, the Court GRANTS Plaintiffs Application for a Preliminary Injunction

and orders Plaintiff to pay $1,000 bond by Monday, May 6, 2013. (ECF No. 14.)

Pursuant to Plaintiffs filing, ReconTrust is dismissed and no longer a Defendant in this

case. (ECF No. 21.)

IT IS SO ORDERED.

DATE: May 1, 2013


___________________________________________

MORRISON C. ENGLAND, JR., CHIEF JUDGE


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