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Hector Albizo, et al v. Wachovia Mortgage

March 13, 2013


The opinion of the court was delivered by: Allison Claire United States Magistrate Judge


On March 13, 2013, the court held a hearing on plaintiffs' February 20, 2013 motion to quash. Breyon Davis appeared for plaintiffs. Melissa Coyle appeared for defendants. On review of the motion, the documents filed in support and opposition, hearing the arguments of counsel, and good cause appearing therefor, THE COURT FINDS AS FOLLOWS:

RELEVANT BACKGROUND A. Factual Allegations

In or around August 2006, plaintiffs Hector and Mary Albizo obtained a mortgage loan from World Savings Bank, FSB (now Wachovia Mortgage ("Wachovia"), a wholly-owned subsidiary of Wells Fargo Bank, N.A. ("Wells Fargo")) secured by real property located at 7033 Ludlow Drive, Roseville, CA 95747 ("the Subject Property"). A deed of trust was recorded in the Placer County Recorder's Office on August 7, 2006.

In or around July 2010, Wachovia contacted plaintiffs to inform them that they were behind on their mortgage. Plaintiffs claim that they were not behind on their mortgage payments. Instead, they accuse Wachovia of failing to withdraw funds through the automatic payment plan that they established through World Savings Bank, FSB. Plaintiffs maintain that the servicing of their mortgage loan has been impacted by two separate mergers during the first three years of the life of the loan: in or around October 2007, World Savings Bank, FSB merged with Wachovia, who began servicing plaintiffs' mortgage loan, and in on or around January 2009, Wachovia merged with Wells Fargo & Co., parent to Wells Fargo. Plaintiffs claim that they continued to make payments on their mortgage loan, remitting them to Wachovia through the automatic payment plan, and that any default on the mortgage loan was due to Wachovia's negligence.

Wachovia instructed plaintiffs to make a nearly-$15,000 payment to bring the account current. Plaintiffs allege that they were only behind two months on their payments, which was approximately $5,000 in arrears, due to Wachovia's negligence, and that the amount sought by Wachovia to bring the account current was too high. Nonetheless, plaintiffs made the payment as instructed and received a letter of confirmation dated August 27, 2010 that the account was current. After this incident, which plaintiffs claim was a scheme by Wachovia to make money off of late fees and other charges, plaintiffs refused to continue with the automatic payment plan and instead began sending monthly checks with their mortgage statement.

Plaintiffs claim that they made payments for September and October 2010 and were current on their payments at that time, but on October 29, 2010, plaintiffs learned that the Subject Property was scheduled for a foreclosure sale on November 2, 2010. Immediately, plaintiffs sent a letter to Wachovia to contest the sale. They also contacted an attorney, who suggested filing a Chapter 13 bankruptcy petition, which would stay the sale of the Subject Property.

On or about November 2, 2010, a bankruptcy petition was filed and the sale of the Subject Property was stayed. Plaintiffs made the December 2010 mortgage payment as required by the bankruptcy court. Through their bankruptcy attorney, plaintiffs negotiated with Wachovia for a loan modification. However, plaintiffs were unable to make their March 2011 payment to Wachovia directly because, although the bankruptcy case was still pending, the bankruptcy court would no longer accept the mortgage payment.

In or around April 2011, Wachovia received notice of the bankruptcy case's dismissal and directed plaintiffs to send them a payment for the March 2011 payment. Plaintiffs sent a check to Wachovia, but the latter did not cash the check.

In May 2011, plaintiffs completed an application for a loan modification. In or around June 2011, plaintiffs were informed by Wachovia that their application was still being reviewed.

In or around July 2011, Wachovia informed plaintiffs that they qualified for a loan modification. On or around July 7, 2011, plaintiffs received a call from a Wachovia representative who discussed the terms of the loan modification.

On July 18, 2011, the Subject Property was sold at a non-judicial foreclosure sale.

Plaintiffs were unaware of this sale.

In July 29, 2011, Wachovia confirmed plaintiffs' loan modification in writing. On or around late-August 2011, plaintiffs received a letter from Wachovia stating that their loan had been reinstated ...

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