Just last month California’s Supreme Court declined to rule on a hot and eagerly anticipated question for borrowers in foreclosure: whether a loan transferred into a trust after the trust’s closing date is void. The Court’s analysis in Yvanova v. New Century Mortgage Corporation discussed Glaski v. Bank of American N.A. which clearly stated that a borrower is able to claim that an assignment of their loan into a trust is void if the transfer occurred after the closing date of the trust. You may recall Glaski which cited a law review article written by Roy Oppenheim and Jacquelyn Trask, “Deconstructing the Black Magic of Securitized Trusts,” cited in its opinion. In Glaski, the Court simply stated that, a borrower facing a foreclosure is able defend itself by asserting that the transfer of their loan was improper because the transfer occurred after the closing date of the trust.
While Florida Courts have yet to jump into the fray, California Courts have also refused to make a call and finally answer whether the transfer of a loan into a trust after the closing date makes the transfer void or voidable.
The Supreme Court of California firmly refused to render an opinion on this issue by stating, “[w]e express no opinion on whether plaintiff has alleged facts showing a void assignment, or on any other issue relevant to her ability to state a claim for wrongful foreclosure.”
We have been following this developing issue for years. While the Courts continue to sit on the sidelines, we will continue a full-court press, forcing the banks to keep dropping the ball.
From the Trenches,