The opinion of the court was delivered by: Present: The Honorable A. Howard Matz, U.S. District Judge
Stephen Montes Not Reported
Deputy Clerk Court Reporter / Recorder Tape No. Attorneys NOT Present for Plaintiffs: Attorneys NOT Present for Defendants:
Proceedings: IN CHAMBERS (No Proceedings Held)
Before the Court is a Motion to Dismiss the complaint filed by Defendant Aurora Loan Services, LLC ("Defendant").*fn1 Plaintiffs Jaime Hernandez and Fernanda Lozano ("Plaintiffs") filed an opposition to the Motion. For the following reasons, the Court GRANTS in part and DENIES in part Defendant's Motion.
Below is a chronology of events leading up to the current action, as alleged by Plaintiffs, and supplemented with facts from Defendant's Request for Judicial Notice ("RJN"), Dkt. 13.
July 18, 2007: Plaintiffs borrowed money from SCME Mortgage Bankers. Compl. ¶ 9. The promissory note was secured by a Deed of Trust (DOT) on the property in which Mortgage Electronic Registration Systems, Inc. MERS was the beneficiary. Compl. ¶ 9 & Exh A. The amount of the loan was $544,000, with an annual interest percentage rate of 7.5%. Id. Plaintiff alleges that "[s]hortly thereafter, SCME then transferred the promissory note to [Defendant] Aurora." Compl. ¶ 9. Plaintiffs cite to a Loan Agreement, but neither of the attached documents (Promissory Note and Deed of Trust) mention Aurora. See Compl. ¶ 9 (citing Exh. A). It is not clear, therefore, from the documents submitted to this Court, whether prior to the foreclosure sale that is described , Aurora was a party to the transactions, and why Plaintiffs communicated with Aurora about their HAMP modification prior to Aurora's supposed involvement in this process.
July 26, 2007: The DOT was recorded in the Official Records of San Bernardino County. Compl. Exh. A. RJN, Exh. 1 (Recorded DOT).
October 14, 2009: LSI Title Company, as agent for Quality Loan Service Corporation, as agent for the beneficiary, issued a Notice of Default and Election to Sell as a result of Plaintiffs' default on the note. RJN, Exh. 2 (Default Notice). MERS substituted Quality Loan Service Corporation as trustee under the DOT. RJN, Exh. 3 (Substitution of Trustee).
October 15, 2009: The Default Notice was recorded in the Official Records of San Bernardino County. RJN, Exh. 2.
January 29, 2010: Plaintiffs submitted a Home Affordable Mortgage Program ("HAMP") loan modification to Aurora. Compl. ¶ 10. Aurora representatives offered Plaintiffs a Special Forbearance agreement ("SFA"). Id. To accept the SFA, Plaintiffs were required to execute the SFA and return it to Aurora with the information requested, financial statements, and initial payment amount of $2,356.22 by February 10, 2010. Id. "Plaintiffs were told by the Aurora representative, that as long as they comply with the SFA, their HAMP review would continue and their home would not be foreclosed upon."
February 1, 2010: Plaintiffs executed the SFA and returned it to Aurora with the requested information. Compl. ¶ 10.
February 9, 2010: Plaintiffs made the initial payment pursuant to the SFA. Compl. ¶ March 2010 - July 2010: Plaintiffs made five payments to Defendant Aurora in the amount of $2356.22. Compl. ¶ 11. Aurora accepted these payments. Id.
July 2010 - December 2010: Plaintiffs were advised by an Aurora representative, whose name is unknown to Plaintiffs, that their loan modification application was still under review, and that they should continue making the same monthly payments in accordance with the SFA pending such review. Compl. ¶ 12. In reliance on these representations, Plaintiffs allege they continued to make payments until December 2010, which Aurora accepted. Id.
January 14, 2011: MERS assigned Defendant Aurora all beneficial interest under the DOT. RJN, Exh. 5.
January 28, 2011: Plaintiffs' home was sold at a foreclosure sale. RJN, Exh. 6. See also Compl. ¶ 13 (incorrectly noting date of sale as January 31, 2011). At the time of the sale, the amount of unpaid debt was $660,110.76. NOR ¶ 8; Compl. Exh. B. The amount paid by Aurora (the grantee) at the trustee's sale was $348,000. Id.
February 3, 2011: The Trustee's Deed Upon Sale was recorded, naming grantee Aurora Loan Services as the foreclosing beneficiary, having paid $348,000 at the trustee sale. RJN Exh. 6. The Deed Upon Sale stated default occurred under the DOT pursuant to the Notice of Breach recorded on October 15, 2009. Id. at 2.
February 4, 2011: Plaintiffs' attorney sent Aurora a rescission request to rescind the January 31, 2011 foreclosure sale, and to cease all eviction proceedings. Compl. ¶ 14. Aurora did not respond to the letter. Id.
February 18, 2011: Defendant filed an unlawful detainer action against Plaintiffs in San Bernardino County Superior Court. Mot. at 4. See also Aurora Loan Services v. Hernandez/Lozano-Rosas, No. UDDS1100872 (docket).
February 22, 2011: Plaintiffs were served with the unlawful detainer action. Compl. ¶ See also Aurora Loan Services v. Hernandez/Lozano-Rosas, No. UDDS1100872 (docket).
April 4, 2011: Plaintiffs filed their Complaint in San Bernardino County Superior Court against Defendant Aurora Loan Services, ...