Original proceedings; petition for a writ of mandate to challenge an order of the Superior Court of Orange County, David C. Velasquez, Judge. Petition denied. (Super. Ct. No. 30-2010-00360268).
The opinion of the court was delivered by: Rylaarsdam, Acting P. J.
CERTIFIED FOR PUBLICATION
Lucy and Manatu Vuki lost their Buena Park home to foreclosure. The sale took place October 7, 2009, with their erstwhile lender, HSBC Bank USA (HSBC), as the buyer at the foreclosure sale. In early January 2010 the Vukis stipulated to entry of judgment in an unlawful detainer action (denominated a "Limited Civil" action) brought against them by HSBC. The stipulation provided for an immediate writ of possession, but allowed the Vukis to remain in the house until January 26, 2010.
However, the day before January 26, the Vukis filed for Chapter 7 bankruptcy. It took HSBC just a little more than 60 days to obtain relief from the automatic stay, which it did on March 30, 2010. Six days after that, on April 6, 2010, the Vukis filed this state court action against HSBC for, among other things, statutory violation of Civil Code sections 2923.52 and 2923.53.
On April 9, three days later, they filed an application for a temporary restraining order seeking a stay of eviction. Three days after that, on April 12, the trial court denied the request for that restraining order. The eviction was thus free to proceed.
But then the Vukis filed this writ proceeding on April 16. On April 20 this court stayed the eviction pending further order. In particular, we wanted to consider the scope of Civil Code sections 2923.52 and 2923.53, a question of first impression. (All further undesignated statutory references will be to the Civil Code.)
We have now heard oral argument in this proceeding. Because of the importance of the statutory issues presented, we publish this opinion explaining the reasons we deny the requested writ. (See Hecht, Solberg, Robinson, Goldberg & Bagley LLP v. Superior Court (2006) 137 Cal.App.4th 579, 584 [denying petition but issuing opinion "in an effort to clarify" law on issue]; Greenlining Institute v. Public Utilities Com. (2002) 103 Cal.App.4th 1324, 1326, 1329 [same].)
In particular, we conclude that, unlike section 2923.5 as construed by this court in Mabry v. Superior Court (2010) 185 Cal.App.4th 208 (Mabry), neither section 2923.52 or section 2923.53 provides any private right of action, even a very limited one as this court found in Mabry.
We also address a related question of the operation of section 2923.54. Subdivision (b) of that statute is clear that: "Failure to comply with Section 2923.52 or 2923.53 shall not invalidate any sale that would otherwise be valid under Section 2924f." The Vukis, however, claim that the statute does not apply to lenders who themselves buy the property at foreclosure, i.e., to lenders who cannot claim the status of bona fide purchasers. This argument fails since any claim which the Vukis might have to invalidate the foreclosure sale based on sections 2923.52 and 2923.53 necessarily entails a private right of action which the statutes do not give them.
1. The Operation of Sections 2923.52 and 2923.53
a. Basic Requirements for a Loan Modification Program
Civil Code section 2923.52 imposes a 90-day delay in the normal foreclosure process. But Civil Code section 2923.53 allows for an exemption to that delay if lenders have loan modification programs that meet certain criteria. Before section 2923.52 was enacted, there was a minimum of three months from any notice of default until any foreclosure sale (§ 2924, subd. (a)(3)). After the enactment of section 2923.52, at least for certain loans, another 90 days must be included "in order to allow the parties to pursue a loan modification to prevent foreclosure." However, if lenders meet the requirements of section 2923.53, they are exempted from the 90-day delay imposed by section 2923.52.
Those requirements are set forth in subdivision (a) of section 2923.53. Readers should note the theme that the requirements are a matter of a general program, evaluated by regulatory commissioners:
"(1) The loan modification program is intended to keep borrowers whose principal residences are homes located in California in those homes . . . .
"(2) The loan modification program targets a ratio of the borrower's housing-related debt to the borrower's gross income of 38 percent or less, ...