Foreclosure Defense: Form under New Law could have similar effect of lis pendens or notice of pendency

Form Submitted by Jim McCandless, Esq.

Editor’s Note: This is the form to file under the new California law to stop the lender in its tracks when it ignores the new legal requirements.

In my opinion, this form could arguably be used in other states as an adjunct to the filing of a complaint alleging mortgage fraud on the part of the lender and  particularly where the fraud relates to fraudulent appraisals.

As I have repeatedly stated, appraisal fraud lies at the root of the mortgage crisis — at both ends — inasmuch as the fair market value of the real property was intentionally hyper inflated to cause homeowners to enter into loans that required then to pay back far more than the true value of their homes which in turn deprived both the homeowner and the “lender” (actually the investor in mortgage backed securities) of the security that was represented.

It is not a reasonable assumption that the average reasonable person acting with full knowledge of the true facts would have bought such a security nor is it a reasonable assumption that the average reasonable person acting with full knowledge of the true facts would have borrowed more than their house was worth. This notice, which is specifically provided under California law could be filed and would present a potential cloud on title in much the same way as a lis Pendens — and at the same item decrease the likelihood of the requirement of posting bond.

FORM OF NOTICE

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO

Insert Your Address

________________________________________________ SPACE ABOVE THIS LINE FOR RECORDER’S USE

You

V
Them (Your lender ,trustee ETC.
.

NOTICE OF NON COMPLIANCE
CALIFORNIA CIVIL CODE § 2923.5

NOTICE OF NON COMPLIANCE CALIFORNIA CIVIL CODE § 2923.5

Notice is given that the LENDERS AND OR TRUSTEES LISTED ABOVE has not complied with civil code 2923.5. As such all notices of default and or trustee sales and such other recordings and actions are void as a matter of law.
I have in good faith attempted to mediate the loan and the true beneficiary has refused to negotiate in good faith. They have not complied with the provisions in which they were to meet with me in person or by telephone in order to assess the borrower’s financial situation and explore options for the borrower to avoid foreclosure. During the initial contact, the mortgagee,
Beneficiary, or authorized agent shall advise the borrower that he or she has the right to request a subsequent meeting and, if requested, the mortgagee, beneficiary, or authorized agent shall schedule the meeting to occur within 14 days. The assessment of the borrower’s financial situation and discussion of options may occur during the first contact, or at the subsequent meeting scheduled for that purpose.

If we had met the property would have reflected a value of ______________. I am willing to pay an interest rate of _____and I will be able to make monthly payments of__________. The principal balance of my loan should be reduced the present market value of ____________.

In the event this is not acceptable I hereby exercise my right to have the security interest in this property rescinded pursuant to the Truth in Lending Act.

APN: ______ ________ ___________

And with a legal description of:
Lot __ of Tract No. _________, in the City of _____________________, County of ___________, State of California, as per Map recorded in Book ________, Pages ___ and ____ of Maps, in the Office of the County Recorder of said County

Dated ______________ .

____________________________________

ACKNOWLEDGMENT
Subscribed and sworn to before me this ______
day of ____, 2008
____________________________________
Notary Public in and for the County of Los Angeles, State of California

Law Offices of
TIMOTHY McCandless
15647 Village Dr
Victorville, Ca 92392
TEL (760) 733-8885; FAX (909)494-4214

From Foreclosure Offense and Defense: Separation of Mortgage from Note, 2008/10/11 at 6:50 PM

 

9 Responses

  1. I am currently looking for a custom form: Restraint order to stop the lender in court from making another move on my property.

  2. what if assignment of mortgage was made by mers/loans servicer officer as mers to plaintiff bank, that had signature of witnesses that you could not read their names and a notary which does not hold active commission in texas?

  3. Shasta County Recorder will not file (record) a Non-Compliance 2923.5 statement. Is there any legal assistance (for a fee) in filing. Also, what effect would a publishing of the Affadavit have (similar to the date of forclosure sale)? Time is of the essence

  4. One More Thing I would like to ask is and this is not for me, if anyone outhere know the answer pleas let me know so I can transfer the information to the person with concern…….

    On a bad purchase money loan (rescission) as everyone seems to say is not an option……….

    In California or Federal Law does anyone what the consummer rights are?

    If a person was offerd a Condominium and was moved into 4 Months prior to signing escrow docs, or loan docs and by doing so was forced to sign docs, ……
    When being told you have been there well over four months if you dont sign we will take you to court and bill you to redo the whole interrior of the condo………

    He was told he did not have the option to cancel the loan since it was a purchase loan….

    The company till this day has not been able to sell all the condos and have been resuced in price…… with the current market not helping……

    The condo was $315k and now are selling for about $100k..
    The buyer asked for an apraisal when docs were signed but never got a responce……
    I beleive that it was more of a skeem the seller was pulling to sell the condo conversions to the public…..
    Thats because the units where apartment a few months prior to the rise in value properties acquired at the time…

    I also have a very strng feeling the condo had multiple appraisals done durring the four months and finaly as the market gave way the seller got what he wanted…

    Signatures have been falsefied in many of the documents, that may include the appraisal, and why I belive the property was sold through a teem of professionals that some how qualified individuals even if they could not afford it.. Many of whom have lost their home and need help now.

    I would like to know if their is a law that would allow for some type of rescission or cancelation of a contract under these violations and keep lenders from foreclosing on the borrowers.

    If anyone know the answer to this email me at:

    Help@EquityLoanManagement.com

    Thank You in advance for your Help.

  5. I have made three different attempts with three different recorders and all have said the same thing about the letter listed above the first one indicated the letter looked to much like a letter you are writing to someone, he indicated it was not in the correct format and I research to see what a notice of non compliance look like and found a few I made it look like a official document went back and was told it did not have the right criteria to be recorded the third time I was told they had no provision to record it under. The next thing for me to do is go to the courthouse and file a Liz pendency against the bank and I was trying to not have to go that far, because all I am looking for is to get the bank to the table but they insist they have not gotten my rescission letter well over 2o days and I have sent eight copies all accounted for signed as received.

    I am not sure if going to court would be the best, because I would not want represent myself I am afraid to loose and have my record tainted with a lawsuit. Can you send me feedback as to what I should do and if an attorney out there is willing to take the case. I have found multiple violations on my contract such as not giving proper disclosure with regards to the three day right to cancel and in my case distribution of funds was not handled as it should have. The law states money should not be issued unless the three days to cancel are over and there no notice of rescission back from the borrower, unless the borrower signs a waiver of the three day to cancel permitted when the borrower has a financial Emergency. In my case I did not have a financial emergency but was given the cash upfront and the checks to pay the outside loans like credit cards the same day. I never signed any document stating that I was giving up my three days to cancel, the checks and cash were just handed to so I could send them off, as simple as placing them in as envelope with a stamp and sending them to the corresponding lenders.

    Also my Truth In Lending Statement is not like the on prescribed by the law indicating the Annual Percentage, Finance Charge, Loan Amount, or a Total in Payments. Mine is allover the page and not everything is listed. Nor did I receive a maturity statement; my loan was set for a five year fix and variable on the remaining 25.

    I was getting a line of credit and they said I needed to open a bank account with them in order to get the line of credit. When it came time for me to do the refinancing of my home I was offered an interest rate of 7.925% credit would have qualified me for a better rate at the time credit rating was 735 for me and 742 for my wife I knew the rates at the time where about 6.25% an I asked the broker for a better rate, I told him hey rates elsewhere are going for about 6.25% what can you do for us. “I can get you a better rate but it would cost you to buy the points down.” I ask how much and he gave me a price of about $8k, I said we won’t get the loan because we have a 6.35% interest rate now and I could get that or a better rate elsewhere. He then said “well you could get a point of if you open an account with us.” I told him that still leaves us with a 6.925% and we already have an account with you. “Well have the direct deposit done plus do the auto pay to that account and I will see about getting you the that point” “plus here are your checks so you can pay off your credit cards and after you sign I will give you the cash. You can go home and think about it your home will be worth more in a few years we don’t charge to do a refinance you may even get a better rate then since your home will go up in value.”

    If I am not mistaken that is in violation of Sherman Act, Clayton Act, Federal Trade Commission Act, 15 U.S.C. § 41, Federal Reserve Act 12 CFR 202 ,12 CFR 203, BHC Act 12 U.S.C., bank shall not in any manner extend credit, lease or sell property of any kind, or furnish any service, or fix or vary the consideration for any of the foregoing, on the condition or requirement that the customer shall obtain some additional credit, property, or service from such bank other than a loan, discount, deposit, or trust service which broadly prohibits unfair deceptive acts or coercive tie-ins practices in or affecting commerce also in violation with the state of CALIFORNIA Unfair Competition Law BUSINESS AND PROFESSIONS CODE SECTION 17200-17210 . The California code alone would cost the lender a penalty fine of $2500.00 per occurrence and $6000.00 per day violation was on effect, in a year that is about $2,190,000.00. For that to happen I think the district attorney would have to take your case and I am not sure how hard that may be.

    I fell for it because I felt I knew the guy, since I have asked if he was a notary public and he admits he is not. Telling me that his boss instructed them to do so when ever the notary public was not available and that she had told the notary public he needed to leave the book even on his days off and that she would sign the book when they had to process a loan.

    I posted the comment with regards to Notary Publics and the California Civil Code § 1185.

    Thank you Neal
    Your response to my posting was as listed bellow. I found that at least I am not running around wasting my time and that you are really are making a difference. All most everything I have read on your site I have gone out and researched, and put some of it to the test.

    I have run to a roadblock with the letter of Non Compliance Posted by Timothy Mccandless’s and need help going over the hump. My email is attached with the posting if you could give me some guidance I would appreciate it so much.

    Thank you Neal this is a great service. Till this day I have not been able to find so much info like what you offer. Most out there are looking to play attorney and get you to sign a contract with them get your money and not really looking to help.

    California Code: Notary Must NOT Have an Interest in the Document Being
    Signed
    January 30, 2009 · 14 Comments

    I caught this from the comments section: He’s right and I think if you
    look in the statutes of every state and industry standards that are
    published by Notary Associations you will find the same language. The fact
    that the Title agent is the closing agent is the Trustee on the Deed of
    Trust DOES create an interest in the document being signed (Deed of
    Trust). In judicial states it might be a different story. The logical
    conclusion is that either a quiet title or mandatory injunction removing
    the Deed of Trust from the official records of the county in which they
    are recorded might be successful. This would remove the security but not
    necessarily the obligation or the note (which is evidence of the
    obligation). It DOES accomplish two things (a) the loan is no longer
    secured and (b) there is nobody authorized to enforce it. Take a look at
    this:

    Notary Publics and the California Civil Code § 1185.
    8224. A notary public who has a direct financial or beneficial
    interest in a transaction shall not perform any notarial act in
    connection with such transaction.
    For purposes of this section, a notary public has a direct
    financial or beneficial interest in a transaction if the notary
    public:
    (a) With respect to a financial transaction, is named,
    individually, as a principal to the transaction.
    (b) With respect to real property, is named, individually, as a
    grantor, grantee, mortgagor, mortgagee, trustor, trustee,
    beneficiary, vendor, vendee, lessor, or lessee, to the transaction.
    For purposes of this section, a notary public has no direct
    financial or beneficial interest in a transaction where the notary
    public acts in the capacity of an agent, employee, insurer, attorney,
    escrow, or lender for a person having a direct financial or
    beneficial interest in the transaction.

    8227.1. It shall be a misdemeanor for any person who is not a duly
    commissioned, qualified, and acting notary public for the State of
    California to do any of the following:
    (a) Represent or hold himself or herself out to the public or to
    any person as being entitled to act as a notary public.
    (b) Assume, use or advertise the title of notary public in such a
    manner as to convey the impression that the person is a notary
    public.
    (c) Purport to act as a notary public.
    8227.3. Any person who is not a duly commissioned, qualified, and
    acting notary public who does any of the acts prohibited by Section
    8227.1 in relation to any document or instrument affecting title to,
    placing an encumbrance on, or placing an interest secured by a
    mortgage or deed of trust on, real property consisting of a
    single-family residence containing not more than four dwelling units,
    is guilty of a felony.
    8228.

  6. IHAVE A QUES? I TRIED TO DISCHARGE MY MORTGGAE UNDER UCC-3. AT FIRST THE BANKS WERE RECEPTIVE THEY EVEN SENT ME A LETTER STATING MY MORTGAGE WAS PAID OFF. OF COURSE MY HOUSE FORECLOSED NEARLT TWO YEARS AGO. I ATTEMPTED THE DISCHARGE USING A CLOSED ACCOUNT? MY QUES IS WHY HAVEN’T THE BANKS MENTION THIS IN THE FORECLOSURE DOCUMENTS. NEIL OR ANY EXPERIENCE LAWYER CAN YOU ANSWER THIS QUES FOR ME.

  7. Ditto. A frustrating trip to the recorders office and an unhappy client. Maybe you should either take the document down, or provide legal authority for its recordation.

  8. I tried today to file one in So. California and was given an instruction saying, “We have found no provision in the California State Law authorizing recording of the enclosed document(s)”. Does anyone have any suggestions? I have not been able to get in contact with Tim Mccandles who suggested this form. What shall we do to get this filed??? Thanks!

  9. I was wondering if you had been able to convince any county recorder to record one of your Civil Code § 2923.5 Notices of Non-Compliance. Also, do you have any insights on whether the right to a telephonic meeting is a right that belongs to the lender, despite the borrower’s request for a personal meeting?

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