Source: https://bobhurt.wordpress.com/2016/04/20/saterback-opinion-destroys-psaassignment-arguments-post-yvanova/
Timestamp: 2019-04-23 04:47:03+00:00

Document:
My mortgage examiner friend saw the California Yvanova case as much ado about nothing. The borrower, Yvanova, sued for wrongful foreclosure because she discovered that the lender New Century Mortgage had, in bankruptcy, wrongfully assigned her note to a securitizer rather than allowing the bankruptcy liquidation trustee do it. That meant the securitization trust had no rightful ownership of the note and therefore no authority to foreclose. The California supremes supported her right to challenge the foreclosure for that reason.
Thus, despite expounding on the issues for 30 pages, the Yvanova opinion simply stands for the unremarkable and largely undisputed proposition that a borrower can sue for wrongful foreclosure where the transaction by which the beneficiary acquired the loan became void from its inception.
The California Supreme Court clarified the only issue before it. The court opined that in a lawsuit for wrongful foreclosure on a deed of trust securing a home loan, the borrower has standing to challenge a creditor’s void assignment of the note and deed of trust to a successor creditor who successfully foreclosed the loan.
The Yvanova case has gone back to trial court to deal with the issue of the impact of the void assignment on the foreclosure. Tsvetana Yvanova has assured me I don’t understand her case well enough to predict the outcome. Nevertheless, I have predicted that in the end, the court will uphold the foreclosure sale of Yvanova’s property for failure to pay timely.
Likewise, borrowers’ counsel, and some in the financial industry, have misconstrued the Court’s narrow holding by reading more into it than it contains. They seem to think that the borrower ought to have standing to challenge a defective assignment or a violation of the Pooling and Servicing Agreement, even thought it does not injure or benefit the borrower, andthe borrower never became a party to it.
Recently, California’s 4th District Court of Appeals, in Saterbak v. JPMCB, addressed what the Yvanova courts did not. It thereby put to rest many of the specious legal theories that borrowers use in an effort to welch on their home loan and get a free house. Notice from the opinion, which I have shown below, how the Court keeps going back to the language of the contract .
The upshot: borrowers can win setoffs, settlements, and damage awards by attacking the contract, NOT by attacking the foreclosure.
Notice key text in bold typeface.
Laura SATERBAK, Plaintiff and Appellant, v. JPMORGAN CHASE BANK, N.A., as Trustee, etc., Defendant and Respondent.
Law Offices of Richard L. Antognini and Richard L. Antognini, Lincoln, for Plaintiff and Appellant. Bryan Cave, Glenn J. Plattner and Richard P. Steelman, Jr., Santa Monica, for Defendant and Respondent.
Laura Saterbak appeals a judgment dismissing her first amended complaint (FAC) after the sustaining of a demurrer without leave to amend. Saterbak claims the assignment of the deed of trust (DOT) to her home by Mortgage Electronic Registration Systems, Inc. (MERS) to Structured Asset Mortgage Investment II Trust 2007–AR7 Mortgage Pass–Through Certificates 2007–AR7 (2007–AR7 trust or Defendant) was invalid. Arguing the assignment occurred after the closing date for the 2007–AR7 trust, and that the signature on the instrument was forged or robo-signed, she seeks to cancel the assignment and obtain declaratory relief. We conclude Saterbak lacks standing and affirm the judgment.
On December 27, 2011, MERS executed an assignment of the DOT to “Citibank, N.A. as Trustee for [2007–AR7 trust].” The assignment was recorded nearly a year later, on December 17, 2012. It is this assignment that Saterbak challenges. The 2007–AR7 trust is a real estate mortgage investment conduit (REMIC) trust; its terms are set forth in a pooling and servicing agreement (PSA) for the trust, which is governed under New York law. Pursuant to the PSA, all loans had to be transferred to the 2007–AR7 trust on or before its September 18, 2007, closing date.
Saterbak filed suit in January 2014. She alleged the DOT was transferred to the 2007–AR7 trust four years after the closing date for the security, rendering the assignment invalid. She further alleged the signature on the assignment document was robo-signed or a forgery. She sought to cancel the assignment as a “cloud” on her title pursuant to Civil Code 2 section 3412. She also sought declaratory relief that the same defects rendered the assignment void.
In May 2014, the trial court sustained Chase’s demurrer. It held Saterbak lacked standing to sue based on alleged noncompliance with the PSA for 2007–AR7 trust because she did not allege she was a party to that agreement. The court granted Saterbak leave to amend to plead a different theory for cancellation of the DOT.
Chase demurred and requested judicial notice of the following instruments: the DOT, the corporate assignment DOT, substitution of trustee, notice of default, and notice of trustee sale. The trial court granted Chase’s request for judicial notice and sustained its demurrer. The court held, “Despite the arguments made by Plaintiff, the FAC does, in fact, allege that the assignment is void because the loan was not moved into the securitized trust in a timely manner.” As it had previously, the court held Saterbak lacked standing to sue based on alleged noncompliance with the PSA, as she was not a party to that agreement. The court also rejected Saterbak’s robo-signing theory for lack of standing, stating she had not alleged that she “relied” on the assignment or sustained injury from it. The court denied leave to amend, noting the FAC was Saterbak’s second attempt and concluding there was no possibility she could remedy her standing deficiencies through amendment.
The court entered judgment for Chase in August 2014, and Saterbak timely appealed.
Central to this appeal is whether as a borrower, Saterbak has standing to challenge the assignment of the DOT on grounds that it does not comply with the PSA for the securitized instrument. For the reasons discussed below, the trial court properly sustained Defendant’s demurrer to the FAC without leave to amend.
Saterbak alleges the DOT was assigned to the 2007–AR7 trust in an untimely manner under the PSA. Specifically, she contends the assignment was void under the PSA because MERS did not assign the DOT to the 2007–AR7 trust until years after the closing date. Saterbak also alleges the signature of “Nicole M. Wicks” on the assignment document was forged or robo-signed.
trustee is not void but merely voidable by the beneficiary”].) 5 Consequently, Saterbak lacks standing to challenge alleged defects in the MERS assignment of the DOT to the 2007–AR7 trust.
Saterbak also points to the presuit notice provisions in the DOT to argue the DOT contemplates her action. She quotes language in the DOT requiring the Borrower and Lender to provide notice and a reasonable opportunity to repair before “any judicial action ․ that arises from the other party’s actions pursuant to this Security Instrument.” However, by Saterbak’s own theory, her action does not arise “pursuant to this Security Instrument”; it is premised instead on a violation of the PSA. The presuit notice provisions in the DOT do not contemplate her action.
In summary, for the reasons discussed above, we conclude Saterbak lacks standing to challenge MERS’s assignment of the DOT to the 2007–AR7 trust.
Saterbak seeks to cancel the assignment of the DOT pursuant to section 3412. She argues that to withstand a demurrer, she merely needs to allege the assignment was void or voidable and that it could cause serious injury. We disagree.
seeking to cancel it”].) Johnson dismissed a similar cause of action under section 3412 because the plaintiffs, borrowers like Saterbak, failed to “allege a plausible case that the assignment is ‘void or voidable’ against them.” (Johnson, supra, at p. 990.) Here, Saterbak fails to state a cause of action under section 3412 because she cannot allege that MERS’s assignment of the DOT to the 2007–AR7 trust was void or voidable against her.
Finally, because a cause of action to cancel a written instrument under section 3412 sounds in equity, a debtor must generally allege tender or offer of tender of the amounts borrowed as a prerequisite to such claims. The tender requirement “is based on the theory that one who is relying upon equity in overcoming a voidable sale must show that he is able to perform his obligations under the contract so that equity will not have been employed for an idle purpose.” (Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868, 878, italics omitted.) The tender rule is not absolute; tender is not required to cancel a written instrument that is void and not merely voidable. (Id. at p. 876; Smith v. Williams (1961) 55 Cal.2d 617, 620–621; Ram v. OneWest Bank, FSB (2015) 234 Cal.App.4th 1, 11.) As discussed ante, we conclude the alleged defects merely rendered MERS’s assignment of the DOT to the 2007–AR7 trust voidable under New York law. In any event, because we affirm the judgment on standing grounds, we do not decide whether Saterbak was required to plead the ability or willingness to tender to cancel the assignment pursuant to section 3412.
We must consider whether Saterbak has demonstrated a reasonable probability that she could cure the defects that we have identified. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.) Saterbak contends she could amend her complaint to “argue that the language in her [DOT] gives her the right to attack a void assignment of her loan.” As discussed in detail above, we conclude the DOT does not confer this right. Because Saterbak has not shown how she could remedy her lack of standing to challenge MERS’s assignment of the DOT to the 2007–AR7 trust, we conclude the trial court properly sustained Defendant’s demurrer to the FAC without leave to amend.
The judgment is affirmed. Respondent 2007–AR7 trust shall recover its costs on appeal.
The parties do not dispute Saterbak is in arrears on her debt obligations and a foreclosure sale has yet to take place.
The Supreme Court has granted review in Keshtgar v. U.S. Bank, N.A., review granted October 1, 2014, S220012, a case involving a preforeclosure challenge based on alleged deficiencies in the assignment of the deed of trust.
interpretation of New York law].) We decline to follow Glaski and conclude the alleged defects here merely render the assignment voidable.

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