Rodriguez v. Bank of America
Plaintiffs Anabel and Jose Rodriguez appeal the judgment of dismissal in favor of defendants Bank of America, N.A. (BofA),[1] Federal National Mortgage Association (Fannie Mae), and Mortgage Electronic Registration Systems, Inc. (MERS) following the trial court's order sustaining without leave to amend their demurrer to the first amended complaint. In that complaint, plaintiffs allege that defendants wrongfully foreclosed the deed of trust on their home. Among other things, they allege that representatives of BAC Home Loans Servicing, L.P. (BAC) told them they had qualified for a loan modification and assured them the trustee's sale had been cancelled. In the meantime, the trustee, ReconTrust Company, N.A. (ReconTrust), sold the property to Fannie Mae.
Generally, a borrower must tender the full amount of the debt to maintain an action to cancel a completed trustee's sale. (Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal.App.3d 112, 117 (Karlsen).) The trial court invoked this rule to dismiss the causes of action seeking to avoid the sale. Plaintiffs allege the tender rule does not apply here because the substitution of trustee and assignments of the deed of trust from the original lender to BAC were void. The test, however, is not whether these documents were void, but whether the sale itself was void. Plaintiffs have not alleged facts demonstrating that the substitution and assignments affected the trustee's statutory authority to foreclose and sell the property. As both the original and substitute trustee, ReconTrust had that authority regardless of whether the substitution was valid.
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