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Bergman’s Team Argues An Important Foreclosure Case Before The 9th Circuit Court of Appeals

On March 4, 2014, Bergman’s team argued an important foreclosure case before the 9th Circuit Court of Appeals.  We argued  Junod v. MERS et al., before a 3 judge panel of the Ninth Circuit Court of Appeals.  The case involves issues similar to those in Glaski v. Bank America— whether a homeowner can challenge a foreclosure by claiming that a post-closing date transfer into a securitized trust governed by New York Trust law was void.  While this issue involves a complex analysis of California law, New York trust law, and IRS codes, the issue is relatively simple.  The theory advanced by the Plaintiffs in this case was that as U.S. Bank as Trustee for the CSMC Trust Mortgage Backed 2006-6 did not actually own the mortgage loan on which it foreclosed.  More specifically, the Plaintiffs claimed that the Assignment of Deed of Trust, dated April 16, 2010, purporting to assign their mortgage loan to a securitized trust with a “closing date” of June 29, 2006, was void since the trust had closed years before in 2006.  Thus, U.S. Bank as the trustee, could not have validly accepted the untimely transfer of the mortgage.

The plaintiffs in this case lost their home to a foreclosure in May 2011.  Although plaintiffs tried to avoid foreclosure by negotiating with Wells Fargo’s servicing company, America’s Servicing Company, U.S. Bank nevertheless foreclosed and sold their home at auction.  Despite seeking information from U.S. Bank and ASC concerning why ASC refused to provide them with a modification after entering into several trial loan modification plans, plaintiffs lost their home of over 25 years in March 2011.

Following the foreclosure, B&G filed a lawsuit in federal court asserting state and federal claims related to the wrongful foreclosure.  Judge Otis Wright, the federal court judge hearing the case, ultimately dismissed plaintiffs’ case finding plaintiffs could not challenge the foreclosure. Judge Wright reached the conclusion that the Assignment of Deed of Trust was valid and that plaintiffs had failed to plead sufficient facts to support their claims.

Bergman and her team appealed the judge’s order to the 9th Circuit Court of Appeals.  Bergman’s team argued before the court before Judge Bybee, Judge Bea, and Judge Gleason.

As noted above, this case involves almost identical issues as those presented in the groundbreaking case of Glaski v. Bank of America.  Since Glaski is the only appellate case that interprets these legal issues, we hope that the 9th Circuit will follow the reasoning of Glaski.  This is especially true since Glaski is the only case which has actually analyzed the terms of a securitized trust agreement, applicable NY Trust law, and IRS codes– all of which require that mortgage loans be deposited with the trustee by the closing date.

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