Pfeifer v. Countrywide Home Loans, Inc.
211 Cal. App. 4th 1250
| Cal. Ct. App. | 2012Background
- Pfeifers (Allen and Florence) sue to enjoin nonjudicial foreclosure, seek declaratory relief, accounting, and elder abuse relief related to an FHA-insured mortgage.
- Deed of trust incorporates HUD servicing requirements, including a face-to-face interview before foreclosure.
- Countrywide and ReconTrust foreclose; Pfeifers allege Recon is a FDCPA debt collector and that MERS lacks beneficial interest.
- Trial court sustained lenders' demurrer without leave to amend and entered judgment for lenders on most claims.
- Court analyzes Mathews v. PHH Mortgage Corp. and HUD regulations; HUD provisions are conditions precedent to acceleration/foreclosure.
- Court holds: (i) no private damage action under HUD regs; (ii) Pfeifers may seek injunction/declaratory relief for failure to comply with HUD servicing requirements; (iii) no damages for Recon under FDCPA; tender not required for injunctive relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| FDCPA applicability to Recon | Pfeifers: Recon is a debt collector under FDCPA | Recon: not a debt collector under FDCPA; FDCPA not applicable | FDCPA claim fails; Recon not a debt collector under the Act |
| HUD servicing requirements as conditions precedent | Face-to-face interview required before foreclosure; regulations incorporated into deed | HUD regs do not create private duties to borrowers; interview not required | HUD face-to-face requirement is a condition precedent; foreclosure cannot proceed absent compliance |
| Private right of action for HUD regulations | Regulations incorporated into deed grant private enforcement rights | No private right to damages for HUD regulatory violations | No private right to damages; relief available only defensively via injunction/declaratory relief |
| Tender requirement for wrongful foreclosure claim | Tender not necessary to obtain injunctive relief to stop foreclosure | Tender generally required to challenge foreclosure | Tender not required to pursue injunctive/declaratory relief against pending foreclosure |
| Mathews v. PHH Mortgage Corp. and controlling reasoning | Mathews supports incorporating HUD regs and enforcing as to foreclosure | Mathews is distinguishable; HUD regs primarily for HUD, not borrower | Mathews reasoning adopted; HUD regs incorporated as conditions precedent to foreclosure |
Key Cases Cited
- Lacy-McKinney v. Taylor, Bean & Whitaker Mortgage Corp., 937 N.E.2d 853 (Ind.Ct.App. 2010) (HUD servicing duties can be conditions precedent to foreclosure)
- Wells Fargo v. Neal, 922 A.2d 538 (Md. 2007) (HUD servicing regulations protect borrowers; private action limited)
- Mathews v. PHH Mortgage Corp., 724 S.E.2d 196 (Va. 2012) (HUD regs incorporated to prevent acceleration/foreclosure)
- California Golf, L.L.C. v. Cooper, 163 Cal.App.4th 1053 (Cal. Ct. App. 2008) (Limitations of private rights in nonjudicial foreclosure; policy considerations)
- I. E. Associates v. Safeco Title Ins. Co., 39 Cal.3d 281 (Cal. 1985) (Trustee powers in nonjudicial foreclosures governed by contract and statute)