February 2016 CA Supreme Court Decision Gives Foreclosed Borrowers Power to Sue Banks Over Ownership of Mortgage Loan Debt

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The CA Supreme Court ruled in February 2016 that homeowner borrowers that had been foreclosed on could sue their mortgage banks on the grounds of which entity actually owns the mortgage. Attorney Patricia Rodriguez, a leading foreclosure defense lawyer, calls the ruling a historic win for homeowner borrowers in California.

A homeowner who has been foreclosed on by one with no right to do so has suffered an injurious invasion of his or her legal rights at the foreclosing entity's hands. No more is required for standing to sue.

Patricia Rodriguez , lead attorney for the Patricia Rodriguez Law Group, is one of several well known foreclosure defense attorneys who were recently empowered and vindicated by a landmark Supreme Court of California decision providing homeowner borrowers further grounds to sue against wrongful foreclosures instituted by their banks. The state Supreme Court opinion on the case of Yvanova v. New Century Mortgage Corp was filed on Thursday, February 18th, 2016, and came down unanimously in favor of borrowers over banks in that borrowers can now challenge in court foreclosures if the assigned holder of a loan can’t prove it is the actual owner. This profoundly affects borrowers who received loans from banks which pooled mortgages into securitized trusts or other financial instruments.

The state Supreme Court stated in a 33-page ruling: "The borrower owes money not to the world at large but to a particular person or institution, and only the person or institution entitled to payment may enforce the debt by foreclosing on the security.” And further, "A homeowner who has been foreclosed on by one with no right to do so has suffered an injurious invasion of his or her legal rights at the foreclosing entity's hands. No more is required for standing to sue."

The case for California homeowner Yvanova was argued before the state Supreme Court by attorney Richard Antognini. He had previously lost the Yvanova v New Century Mortgage Corp case in a California Court of Appeals and other lower courts. Similarly, Patricia Rodriguez was the attorney for the high profile and often-referenced homeowner borrowers’ rights case of Jenkins v. JPMorgan Chase (which also lost in 2011) in which the Court of Appeals said the borrower could not file a claim of wrongful foreclosure because they are not a party to or a holder of the debt.

Patricia Rodriguez is one of the pioneer attorneys in challenging foreclosing banks on the grounds of the chain of assignment of ownership of the loan and other related conditions. She commented, “This is a critically and historically important reversal of the California lower courts’ opinions that blocked homeowner borrowers from suing banks based on which entity actually owns the debt. This is a tremendous opening for California homeowners who are in or have gone through nonjudicial foreclosure. Essentially, the court is saying if you claim you own a debt, then you have to prove you actually do own that debt, and a borrower can take that bank to court and prove the bank does not own it.”

The state Supreme Court essentially sided with a 2013 state appellate ruling in Glaski v. Bank of America. This case held that borrowers can challenge a nonjudicial foreclosure sale based on alleged violations of pooling and servicing agreement terms.

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Patricia Rodriguez
@RZLG_Inc
since: 04/2011
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