CA Homeowners Sue Over Allegedly Invalid Foreclosure Proceedings

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Two homeowners have filed a lawsuit against a group of 10 loan servicers, trusts, and lenders, claiming the defendants violated various state and federal laws in initiating a non-judicial foreclosure of their home. The 38-page complaint alleges that Caliber Home Loans, Inc. – at the direction of U.S. Bank Trust, N.A. and on behalf of LSF9 Master Participation Trust – sent the plaintiffs a notice of default on mortgage loans that it legally had no authority to service. According to the suit, the loan ownership history was disputed and contained “gaps in the chain of title” and “a myriad of other problems.” Under the California Homeowner Bill of Rights, entities attempting to initiate a foreclosure are required to prove that they are the true owners of the loan, the complaint argues.

The suit also alleges violations of the Fair Debt Collection Practices Act and points at Caliber’s purported attempt to collect on debts it could not validate. From the complaint:

“Caliber…despite acknowledging that there were unexplained financial discrepancies in the debt validation statements, mortgage statements and other demands for payment they had sent to Plaintiffs and other Class members on behalf of Defendants US Bank and LSF9, nevertheless attempted to collect the debt as if it had the authority to do so and as if the amount was validated and undisputed.”

Because of the defendants’ failure to provide validation of the loan ownership, amount of debt, and other legally required information, the notice of default sent to the plaintiffs was “on its face void and invalid,” according to the complaint. The plaintiffs claim they have suffered “actual economic damages” and seek injunctive and monetary relief.