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, Petitioners,
AURORA LOAN SERVICES LLC et al., Real Party in Interest.

No. G042926.

Court of Appeals of California, Fourth District, Division Three.

Filed June 11, 2010.

Law Offices of Moses S. Hall and Moses S. Hall for Petitioners.

No appearance for Respondent.

McCarthy & Holthus, Matthew Podmenik, Melissa Robbins, Charles E. Bell; Akerman Senterfitt,
Justin D. Balser and Donald M. Scotten for Real Party in Interest Aurora Loan Services.




This case shows how the conclusions we set forth in Mabry v. Superior Court (2010) ___
Cal.App.4th ___ (Mabry), involving Civil Code section 2923.5,[1] play out with different facts.

Here, on September 18, 2009, Clifford and Tracey Davidson filed an action against defendant
Aurora Loan Services and others connected with their home loan ("the lender") based on causes of
action arising out of an alleged breach by the lender of section 2923.5. Like the plaintiffs in
Mabry, they alleged that the lender had not, prior to filing a notice of default, contacted them to
assess their financial situation and explore options to avoid foreclosure.

The lenders scheduled a foreclosure sale for October 15, 2009. One week before that sale, on
October 8, 2009, the Davidsons filed an application for a temporary restraining order and
preliminary injunction to prevent the sale. The trial court issued a temporary restraining order and
set October 27, 2009 to hear the application for a preliminary injunction.
At the hearing on October 27, the trial judge — the same trial judge who first heard the Mabry
matter — made these determinations:

(1) Contrary to what he had decided in Mabry, the trial judge concluded that a section 2923.5
action was not preempted by the federal Home Owners Loan Act of 1933.
(2) Confronting the state law on its own terms, the trial judge concluded that a section 2923.5
declaration must be under oath.
(3) In accord with what he had determined in Mabry, the trial judge concluded that full tender of
arrearages was required for any relief under the statute. In that regard, at the hearing, the trial judge
was initially under the misimpression that the foreclosure sale had already taken place, and,
accordingly, applied Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal.App.3d 112 to the case
at hand. Karlsen was a postforeclosure case, but had held that even if the foreclosure sale there
really was voidable, a tender of the whole amount of indebtedness was required before the sale
could be set aside.

Thus the result of the October 27 hearing was still the same as in Mabry: The borrowers had no
relief. The temporary injunction was dissolved and the application for preliminary injunction

This writ petition challenging the trial court's order was filed on November 24, 2009. The relief
requested, however, was a bit ambiguous as to what stage foreclosure proceedings had reached by
that date. Specifically, it did not mention whether the case was a preforeclosure sale — and
therefore the Davidsons were seeking a postponement of that sale — or postforeclosure sale, and
therefore the Davidsons were seeking a stay of any eviction. In the three substantive requests for
relief, the Davidsons sought an order of this court that would have the effect of commanding the
Superior Court to "enter a new order" that would stay "both the foreclosure on their residence and
their eviction thereof."

Less than a week later, on November 30, 2009, this court issued an order tracking the language of
the petition's prayer: "As prayed for, pending further order of this court the foreclosure on
petitioners' residence and their eviction thereof is STAYED."

In their November 24 petition, the Davidsons did not tell this court that the foreclosure sale had
already taken place. To be fair to the Davidsons and their counsel, though, we must point out that
it was not until Mabry, decided in early June 2010, that the significance of a completed foreclosure
sale — as distinct from a right to postpone a foreclosure sale — was fully recognized in the
context of the statutory scheme revolving around section 2923.5. In any event, the lender, in its
return by way of answer and demurrer to the petition, filed February 19, 2010, alleged that the
foreclosure sale had taken place on November 16, 2009, i.e., eight days before the writ petition
was filed.

At oral argument in May 2009, the fact of a foreclosure sale was admitted by the Davidsons'
counsel. Counsel made the point, though, that it was the lender itself that had bought the property
at the foreclosure sale.[2]


As explained in Mabry, the individual right of action created by the Legislature is a limited one:
To have a foreclosure sale postponed so that the lender can comply with section 2923.5's
substantive contact requirements. As also explained, there is nothing in section 2923.5 that
indicates that the Legislature wanted to allow noncompliance with section 2923.5 to be the basis of
any action to set aside a foreclosure sale. (Mabry v. Superior Court (June 10, 2010, G042911) ___
Cal.App.4th ___, ___ [2010 WL 2180530 at p. 1] ["If a lender did not comply with section 2923.5
and a foreclosure sale has already been held, does that noncompliance affect the title to the
foreclosed property obtained by the families or investors who may have bought the property at the
foreclosure sale? No. The Legislature did nothing to affect the rule regarding foreclosure sales as

Accordingly, regardless of whether there was compliance here, section 2923.5 does not afford a
basis for relief.


The petition for writ of mandate is denied. Because section 2923.5 has been a matter of first
impression in the California state courts, each side will bear its own costs on appeal. The stay
issued by this court (which in any event has prevented eviction for these past six months or so) is




[1] All otherwise undesignated statutory references in this opinion are to the Civil Code.
[2] A petition for rehearing by the Davidsons develops the argument. As we understand the argument, the idea is that
because the lender bought the property itself at the foreclosure sale, it is not a "bona fide purchaser for value"
(commonly "BFP's") and therefore should take the property subject to the prior owners' claims of a violation of section
2923.5 — particularly given that the lender, of all parties, would have actual notice of any violation of section 2923.5.
The petition also makes the policy argument that any other result would give lenders an incentive to circumvent the
consequences of any violation of section 2923.5 by hurrying up an impending foreclosure sale.

These two arguments are unavailing. As explained in Mabry, the only statutory remedy for violation of section 2923.5
is to be found in section 2924g, and that remedy is only a postponement of a foreclosure sale. There is nothing in
section 2923.5 on which we may distinguish BFP's from some other class of buyer. Thus, allowing an alleged
violation of section 2923.5 to be the basis of an action to set aside a foreclosure sale in the case of a non-BFP buyer
would be to judicially create a redemption period, and that out of whole cloth. That we decline to do. (See Code Civ.
Proc., § 1858 ["the office of a judge is . . . not to insert what has been omitted"].) If the Legislature had wanted to
create a redemption period, or provide for an action to set aside a foreclosure sale as a mechanism to enforce section
2923.5, it could have said so. It didn't. Obviously some balancing of interests was involved, and the Legislature was
willing to compromise the respective interests of borrowers and lenders by giving borrowers more time before
foreclosure, but only that, regardless of the incentives created for lenders to foreclose at the earliest possible moment.

We should add, of course, that nothing we say in this opinion is intended to affect the existing edifice of law governing
when, or when not, irregularities in foreclosure proceedings may be the basis of an action to set aside a foreclosure