23 September 2012

KingCast & Mortgage Movies see a 9th Circuit split on Irreparable Harm in fraudulent foreclosure cases in Tandiama v. Novastar Mortg. Inc vs. Tabb v. One West Bank.

Interestingly enough the trend seems to be that the Courts are giving homeowners less and less protection, even though almost every foreclosure these days involves an element of fraud. Query, if getting thrown out of your home -- particularly if you have a family -- does not constitute irreparable harm (emotional and psychological and financial harms all rolled into one) then what does? That's why I encouraged U.S. AG Eric Holder, NY AG Eric Schneiderman and HUD Secretary Shaun Donovan to redouble their efforts to fight the Good Fight in the comprehensive journal entry. Well it was comprehensive then, but I have more to post about Bank of America and their fraudulent ways as noted herein. Hint: That forensic loan audit relative to Cecilia May's mortgage is going to get ugly. Very ugly. Look for it in the next day or so.

Tabb v. One West Bank, 2010 U.S. Dist. LEXIS 89049 2010 U.S. Dist. LEXIS 89049

This matter comes before the Court on Plaintiffs' Emergency Motion (#22) for Temporary Restraining Order and Temporary Injunction and Motion (#23) for Evidentiary Hearing and Order to Show Cause. For the reasons that follow, the Court concludes oral argument would not be helpful and DENIES Plaintiffs' Motions.

Plaintiffs seek an injunction against Defendants to halt the foreclosure of Plaintiffs' mortgage and a Trustee's sale of the residence at 9415 N.E. River Pointe Circle, Portland, Oregon 97211, which Plaintiffs assert is scheduled for August 30, 2010. The Ninth Circuit recently restated the test for a temporary restraining [*2] order (TRO) as set out by the Supreme Court:

"A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest."

 To the extent that our cases have suggested a lesser standard, they are no longer controlling, or even viable. Am. Trucking Assocs., Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009)(quoting Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 129 S.Ct. 365, 374, 172 L. Ed. 2d 249 (2008)). The standards for issuance of a TRO are identical to those for issuing a preliminary injunction. Whitman v. Hawaiian Tug & Barge Corp./Young Bros. Ltd. Salaried Pension Plan, 27 F. Supp. 2d 1225, 1228 (D. Haw. 1998).

 The Court has reviewed Plaintiffs' submissions as well as their Complaint. Styled as an "Action of Trespass on the Case," it appears Plaintiffs' contend, among their numerous allegations, that Defendants committed fraud by securitizing and transferring the promissory note that accompanied Plaintiff's mortgage. Plaintiffs have not clearly alleged or shown any false representations [*3] by Defendants on which Plaintiffs relied to their detriment to support their claim of fraud under Oregon law. See Webb v. Clark, 274 Ore. 387, 391, 546 P.2d 1078 (1976) (setting out the elements of fraud under Oregon law).

Moreover, Plaintiffs have not cited, and the Court is not aware of, any law that prohibits the transfer or sale of Plaintiffs' promissory note as alleged. Accordingly, for the purposes of this Motion only, the Court concludes Plaintiffs have not demonstrated the necessary likelihood of success on the merits of their claim. The Court, therefore, concludes Plaintiffs have not satisfied their burden with respect to their Motion for a Temporary Restraining Order.

 CONCLUSION For these reasons, the Court DENIES Plaintiffs' Motion (#22) for Temporary Restraining Order and Temporary Injunction and Motion (#23) for Evidentiary Hearing and Order to Show Cause. IT IS SO ORDERED. DATED this 27th day of August, 2010. ANNA J. BROWN United States District Judge

But see Tandiama v. Novastar Mortg., Inc., 2005 U.S. Dist. LEXIS 33622

Alternatively, the Tandiamas argue that a preliminary injunction is appropriate under the Ninth Circuit's alternative preliminary injunction test, contending that they have a strong likelihood of success on the merits and that irreparableinjury will result if NovaStar forecloses on their home. Setting the parties' merits-based arguments aside, the court finds that the Tandiamas will suffer irreparable harm if they lose their home and are forced to relocate. A foreclosure sale would leave Melanie and Angelito Tandiama, their three children, [*9] and Melanie's elderly mother without the home they have shared for the last decade.

There is no doubt that foreclosing on the deeds of trust would deliver a devastating emotional and financial blow to the Tandiamas. HN3Having demonstrated a strong showing of irreparable harm, the Tandiamas' required showing of probable success on the merits is decreased. Flowers, 408 F.3d at 1120. Previously, the court held that NovaStar's failure to provide the Tandiamas with a timely, written good faith estimate disclosing the yield spread premium it paid in connection with their mortgage constitutes an unfair and deceptive practice under Washington's Consumer Protection Act. Order, Dkt. # 167 at 10.

The Tandiamas rely on this finding alone to demonstrate their likelihood of success on the merits. Yet, the court refrained from granting summary judgment in favor of the Tandiamas on their CPA claim because of the "hotly contested" factual issues surrounding the false employment and income information contained in Juliana Tandiama's loan application. Id. Since this ruling, both parties have developed further evidence which they argue supports their version of events. 6Neither party's [*10] evidence, however, resolves the overriding factual question of whether the Tandiamas engaged in a scheme to defraud NovaStar, which can only be resolved at trial. This question will likely boil down to a credibility determination in light of the vastly different stories of what occurred. Nonetheless, the court finds that injunctive relief is warranted in light of the irreparable harm that would result from foreclosing on the Tandiamas' home and the Tandiamas' at least even chance of prevailing on the merits of their CPA claim.

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