Vincent Howard and our Corona foreclosure defense attorneys work every day with victims of what we consider deceptive and unfair lending and loan servicing practices. Though not every one of these practices falls under federal or state predatory lending laws, banks have had ample time to innovate new ways to mislead borrowers or deprive them of information in a way that creates more profits for the lender or servicer. That's why we were pleased to see the Ninth Circuit's ruling in Kekauoha-Alisa v. Ameriquest Mortgage Co. et al., which ultimately found defendants had violated Hawaii state law. Margery Kanamu-Kalehuanan Kekauoha-Alisa filed for bankruptcy, triggering a stay on her foreclosure sale. Due to the foreclosing company' failure to properly announce a delay, the ensuing foreclosure was ultimately voided and found unfair and deceptive.
The foreclosure sale was correctly postponed three times during the bankruptcy's pendency. The fourth time, however, the foreclosure law firm sent an inexperienced employee who failed to announce a postponement, and indeed asked bystanders if they were interested in the property. The lender later moved for relief from stay to foreclose, received it, and sold the property to itself at auction. A state-court case evicting Kekauoha-Alisa is currently pending. However, Kekauoha-Alisa filed a complaint in the bankruptcy court alleging that the foreclosure sale was improper -- among other reasons, because of the failure to announce the postponement, which violated state law. After a trial, the bankruptcy court agreed, finding it violated Hawaii foreclosure requirements as well as the mortgage contract, and was an unfair or deceptive trade practice under Hawaii law. It awarded Kekauoha-Alisa $417,761.77. Lenders appealed the ruling to the Bankruptcy Appellate Panel of the Ninth Circuit, which reversed, finding the public announcement requirements were met. Kekauoha-Alisa appealed.
The Ninth Circuit reversed again, ruling the bankruptcy court was correct to avoid the foreclosure sale. The law firm employee clearly did not make a public announcement, the court said, and the BAP erred in attempting to construe statutes to find otherwise. Hawaii law doesn't expressly provide a remedy for this failure, it noted, but it agreed with the bankruptcy court that Hawaii precedent requires the foreclosure to be voided regardless of whether the violation was technical or prejudicial. And because there was clearly no public announcement, in violation of Hawaii law, the court said, the bankruptcy court was also correct to find a breach of the mortgage contract's provision that both parties would follow Hawaii law. Finally, the Ninth ruled the failure to correctly postpone the sale was deceptive under Hawaii law. It was a material misrepresentation likely to mislead a reasonable consumer; whether anyone was actually misled was immaterial, the court said. However, it found the bankruptcy court failed to investigate Kekauoha-Alisa's actual damages, so it remanded the case for a proper calculation of those and attorney fees.
Vincent Howard and our Anaheim foreclosure defense lawyers are pleased to see the bulk of the ruling upheld. Though Kekauoha-Alisa's damages will be recalculated, she will certainly still come out the winner, given the Ninth Circuit's clear findings that the mortgage lender violated the law. The lender argued that these were "technical" violations, and perhaps that's true. However, in our experience as Long Beach foreclosure defense attorneys, lenders are perfectly happy to enforce their rights when borrowers commit "technical" violations, such as sending a payment slightly late. Indeed, lenders eager to avoid making loan modifications they've already promised to make have been accused of inventing technical violations. At Howard Law, P.C., we make it a goal to fight foreclosures based on these shoddy grounds.
Led by experienced bankruptcy and foreclosure litigator Vincent Howard, Howard Law represents clients across California who are struggling to stay in their homes despite indifference or malfeasance by their loan servicers. To tell us your story or learn more, call us today at 1-800-872-5925 or send us a message online.