Sale Is Valid As A Result Of Tolerance In California

Alleged irregularities Defense does not prevent foreclosure in California

In re GAYLE A. TYDINGS-MONSOUR, Debtor. GAYLE A. TYDINGS-MONSOUR,
Plaintiff, v. EMC MORTGAGE COMPANY, a corporation, et al., Defendants.

Case Law
Case No. SV 03-18319 MT, Chapter 13, ADV. No. 03-01446 MT
UNITED STATES BANKRUPTCY COURT FOR THE CENTRAL DISTRICT OF
CALIFORNIA, SAN FERNANDO VALLEY DIVISION
2006 Bankr. LEXIS 2455

April 12, 2006, Decided
April 12, 2006, Filed

Facts: After a mortgage given by plaintiff when she bought her home was sold to the mortgagee and plaintiff failed to make required payments, the mortgagee recorded a notice of default and posted a notice of sale. Plaintiff and the mortgagee thereafter entered into a forbearance agreement, and each time that plaintiff made a payment, the nonjudicial sale was postponed another month. An order to the agent to sell the property when plaintiff failed to make the balloon payment was later countermanded, but the agent held the property for sale anyway, and was about to deliver title to the vendee when plaintiff filed both a bankruptcy and an adversary complaint against defendants.

Issue: Is the sale valid?

Ruling: Yes. It was held that the foreclosure sale was valid and that various alleged procedural irregularities, including the manner in which the sale was repeatedly postponed, were inconsequential because plaintiff had agreed to such postponements. That meant that a defense judgment was properly entered on the claims to set aside the sale and to quiet title. The court also held that the agent was entitled to summary judgment on various claims. There is a common law rebuttable presumption that a foreclosure sale has been conducted regularly and fairly. A successful challenge to the sale requires evidence of failure to comply with the procedural requirements for the foreclosure sale that caused prejudice to the person attacking the sale.

Lesson Learned:If debtor agrees and tolerates the alleged procedural irregularities attendant to the foreclosure sale, he cannot later on repudiate that action. He is stopped from questioning said irregularity.

By Kevin Levonas and Jerry L