In Yvanova v. New Century Mortgage Corp., plaintiff filed suit against numerous financial institutions alleging that the deed of trust was improperly securitized and assigned from the original lender to several successive entities. In 2006, plaintiff obtained a loan from a mortgage lender who went into bankruptcy in 2007. Subsequently, the deed of trust was assigned to New Century Mortgage through a pooling and servicing agreement. Plaintiff defaulted and was served with a notice of default in August 2008 and January 2012. The property was sold through a foreclosure sale on September 14, 2012.
After two rounds of motions to dismiss, the operative complaint contained a single cause of action for quiet title. The complaint alleged that the assignment of the deed of trust from the original lender to New Century Mortgage and the substitution of trustee were void, thus rendering the foreclosure sale invalid.
Defendant demurred to the operative second amended complaint on the ground that plaintiff could not state a valid cause of action because she had failed to even allege tender of the sums owed prior to the foreclosure sale. The pro per plaintiff had represented that she had failed to repay the debt or tender the sums owed as required under California law. Accordingly, the trial court sustained the demurrer based on plaintiff’s failure to allege either tender of the amount owed or fraud in origination.
Plaintiff appealed the decision of the trial court and challenged defendant’s standing to foreclose. Plaintiff sought a reversal of the trial court’s decision and a chance to file a third amended complaint. The California Court of Appeal, Second District, affirmed the trial court’s order. In so doing, the Court of Appeal’s decision held that a borrower lacks standing to complain of any alleged defect in the transfer of a loan into a securitized trust in violation of a pooling and servicing agreement.
The Court of Appeal agreed with Jenkins v. J.P. Morgan Chase Bank, N.A., 216 Cal. App. 4th 497 (2013) and declined to follow Glaski v. Bank of America, 218 Cal. App. 4th 1079 (2013). In Jenkins, the Court of Appeal had found that a borrower lacked standing to enforce any agreements related to assignments of a promissory note because any impropriety in such a transfer only affects the parties to the transaction and not the borrower. The Jenkins court had also held that “an unrelated third party to the alleged securitization, and any other subsequent transfers of the beneficial interest under the promissory note lacks standing to enforce any agreements. . . relating to such transactions.” 216 Cal. App. 4th at 515. The Court of Appeal found plaintiff’s reliance on Glaski unpersuasive. Although agreeing that Glaski would support plaintiff’s position, the Court of Appeal noted that no California court had chosen to follow Glaski’s holding that a borrower could resist foreclosure on any ground that renders an assignment in the chain of title void. The decision was filed on April 25, 2014.
On June 10, 2014, a real estate broker and “legal advocate” submitted a letter to the California Supreme Court requesting depublication of the Opinion.