Calvo v. HSBC Bank USA
199 Cal. App. 4th 118
| Cal. Ct. App. | 2011Background
- Calvo obtained a loan secured by a deed of trust against her residence; original lender CBSK Financial Group assigned the loan to HSBC Bank USA, N.A.; Aztec Foreclosure Corporation substituted as trustee with substitution stating MERS as the present beneficiary; substitution of trustee recorded October 14, 2008, same date as notice of trustee’s sale; foreclosure notice and sale were conducted, resulting in HSBC Bank purchasing the residence and a trustee’s deed upon sale recorded January 9, 2009; second amended complaint seeks to set aside the sale for alleged violation of Civil Code section 2932.5 requiring recording of an assignment before exercising a power of sale; trial court sustained demurrer without leave to amend; court held 2932.5 does not apply to deeds of trust and sale did not violate it.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §2932.5 apply to deeds of trust for foreclosures? | Calvo argues 2932.5 requires recorded assignment before sale. | HSBC Bank argues 2932.5 applies only to mortgages, not deeds of trust. | No; §2932.5 does not apply to deeds of trust. |
Key Cases Cited
- Stockwell v. Barnum, 7 Cal.App.413 (1908) (assignment recording requirement applies to mortgages, not deeds of trust)
- Bank of Italy etc. Assn. v. Bentley, 217 Cal.644 (1933) (distinguishes mortgage vs. deed of trust; security exhaustion rules; not §2932.5 applicable to deeds of trust)
- Strike v. Trans-West Discount Corp., 92 Cal.App.3d 735 (1979) (distinguishes equitable subrogee from deed of trust with power of sale; context not §858 predecessor scope)
- Gomes v. Countrywide Home Loans, Inc., 192 Cal.App.4th 1149 (2011) (interprets deed of trust granting power to initiate foreclosure by MERS as agent)