A GENERAL OVERVIEW OF TRUTH IN LENDING LAW AND THE RIGHT TO RESCIND

NOTICE: The foregoing information is general legal information only and shall not be relied upon as legal advice, or a substitution for legal advice. If you have specific legal questions about your foreclosure case, or loan modification case you should seek out the advice of a real estate attorney. In addition, the information posted above may not be 100% complete, accurate or up-to-date. The Law Offices of Steve Vondran is licensed to practice law in the state of Arizona and California and only seeks to solicit and serve Clients in these two states. Steve Vondran, Esq. is a licensed attorney and real estate broker in California and Arizona. He can be reached by email at steve@vondranlaw.com or toll free (877) 276-5084. This is an advertisement and communication pursuant to State Bar Rules. Please do not send us private or confidential information through any of our above-listed websites. Sending us an email does not create an attorney-client relationship (only signing a legal retainer will do this).

FEDERAL TRUTH IN LENDING LAW

The Truth in Lending Act (TILA) is a cornerstone of consumer credit legislation. The Statute is Congress’s effort to guarantee the the accurate and meaningful disclosure of the costs of consumer credit and thereby to enable consumers to make informed choices in the marketplace. See 15 U.S.C. § 1601(a). The Act is designed to protect borrowers who are not on an equal footing with creditors either in bargaining power or with respect to the knowledge of credit terms. In other words, TILA was passed to aid the unsophisticated consumer. See Thomka v. A.Z. Chevrolet, Inc. 619 F.2d 246 (3d Cir. 1980). The Act is also remedial and must be liberally construed in favor of borrowers. See King v. California, 784 F.2d 910 (9^th Cir. 1986). Except where Congress has relieved lenders of liability for noncompliance, it is a strict liability statute. Courts should continue to assure that consumers are accorded the full remedies available under the Act for violations found, even if they might seem technical. See Rodash v. AIB Mortgage Co., 16 F.3d 1142, 1145, 1149 (11^th Cir. 1994). Although Congress permitted the Federal Reserve Board to issue regulations implementing TILA (Reg Z), and to issue interpretations and official staff commentary that the Courts consider to be persuasive authority, the FRB’s authority is not without limits, and a regulation that conflicts with TILA cannot stand. See Fabricant v. Sears, Roebuck, Clearinghouse No. 54,563 (S.D. Fla. Mar. 5, 2002).

NOTICE OF RIGHT TO CANCEL – DISCLOSURE REQUIREMENTS

A common violation we find (and you can check your loan documents to see if you have such a violation) is that in a refinance transaction each borrower or person with ownership interest in the property did not receive two copies each of the federally required notice of right to cancel. If this is true, and your loan was originated within the statutory three year period (note that arguments for equitable tolling may exist) then this violation, although appearing technical in nature, can trigger an extended three year right to cancel your loan.

Under Federal Truth in Lending Law, each Borrower, or person with ownership interest in the property, (in a non-purchase loan or other exempt transaction) in which a security interest, including any such interest arising by operation of law, is or will be retained or acquired in any property which is used as the principal dwelling, shall be provided with TWO (2) COMPLETED copies EACH of a notice of right to rescind (cancel). It is the lender’s obligation to complete these forms and deliver TWO copies to each Borrower or person with Ownership interest in the Property. 15 U.S.C. § 1635(a), Reg. Z §§ 226.5(b), 226.23(b). If each borrower or person with ownership interest is not provided two adequate copies of this Notice, an extended three year right to rescind is permitted under the Federal Truth in Lending Law.

The notice shall identify the transaction or occurrence and clearly and conspicuously disclose the following:

1. The retention or acquisition of a security interest in the consumer’s principal dwelling.
2. The consumer’s right to rescind, as described in paragraph (a)(1) of this section.
3. How to exercise the right to rescind, with a form for that purpose, designating the address of the creditor’s place of business.
4. The effects of rescission, as described in paragraph (d) of this section.
5. The date the rescission period expires. (See Reg. Z §§ 226.15(b)(5) and 226.23(b)(5))

See Meyer v. Argent Mortgage Co., (In re Meyer), 379 B.R. 529 (Bankr. E.D. Pa. 2007). If the notice is subject to more than one sensible reading, and different results ensue depending upon which of the readings is adopted, the creditor has not met the “clear and conspicuous standard.” SeeHandy v. Anchor Mortgage Corp., 464 F.32 760, 764 (7^th Cir. 2006).

TWO KEY POINTS WE WILL ARGUE (when the two copies each are received but the rescission dates are not filled in – a common TILA violation)

(1) The Lender must fill in the form and dates (not the borrower) – If the creditor uses the proper model form, properly completed………and fulfills all other requirements, the borrower has no rescission right. This position is supported by the actual text of the law – See 15 U.S.C. §1635(h) – which states:

Limitation on rescission:

“An obligor shall have no rescission rights arising solely from the form of written notice used by the creditor to inform the obligor of the rights of the obligor under this section, if the creditor provided the obligor the appropriate form of written notice published and adopted by the Board, or a comparable written notice of the rights of the obligor, that was properly completed by the creditor, and otherwise complied with all other requirements of this section regarding notice.”

The plain-meaning implication of this statutory provision SEEMS TO BE clear (and therefore is controlling), the lender has the obligation to complete these forms, it is not the borrowers duty to determine what dates to insert into the forms, much less at the direction of a mobile notary. In fact, the escrow instructions and lender’s instruction sheet for the notice of right to cancel form usually set forth the requirement that the dates be inserted before the borrower is asked to sign all copies. We will present credible testimony on this point as well. For now, please see attached Exhibit “A” which sets forth the evidence currently in our possession, of which we will rely on, and will build our discovery foundation upon.

This reading of the law (that it is the lender’s obligation to insert the dates, and not the borrowers) is also consistent with the requirement #5 (set forth above) that “the lender shall clearly and conspicuously identify the date the rescission period expires.” In fact, at least two courts have held in the First and Second circuit: “the complexity of business transactions under TILA means that the average consumer cannot figure out when TILA rights expire…..” See Bonney v. Wash. Mutual Bank, No. 08-30087 (D. Mass. July 30, 2008). Placing this burden on the borrower strips the “truth” from the transaction.

Finally, adding yet more support that the lender, not the borrower, must fill in the dates of the TILA right to rescind notice is a holding from another court which held: “Under both TILA and Regulation Z, the test for disclosure of the rescission right is whether the form of notice that the lender provided constitutes a clear notice of that right. See Porter v. Mid-Penn Consumer Discount Co., 961 F.2d 1066, 1076 (3d Cir.1992) (“the law does not require an ideal notice of rescission rights, just a clear, accurate and conspicuous one.”)………the right to rescind can be clearly disclosed only ifthose two dates are filled in.” See Meyer v. Argent Mortgage Co., (In re Meyer), 379 B.R. 529 (Bankr. E.D. Pa. 2007).

(2) The Lender is required to provide TWO copies of the notice of right to cancel to EACH borrower along with a copy of all of the material TILA disclosures. Failure to meet these requirements also provides an extended three year right to rescind the loan transaction. See 15 U.S.C. § 1635(a); Reg. Z §§ 226.15(b), 226.23(b) and Webster v. Centex Home Equity Corp. (In re Webster), 300 B.R. 787 (Bankr. W.D. Okla. 2003).

HERE IS ANOTHER WAY TO GET THE EXTENDED THREE YEAR RESCISSION RIGHT (USUALLY A LOAN AUDIT IS REQUIRED) The material disclosures required in a closed-end transaction, (APR, including the existence of a variable rate feature, Finance Charge, Amount Financed, Total of Payments, and Payment schedule) the failure of which to disclose results in an extended three year right to rescind. See Gaono v. Town & Country Credit, 324 F.3d 1050, 1053, (8th Cir. 2003).

Where only one copy of the notice of right to cancel is received, or where each borrower does not receive two signed and completed copies of the required right to cancel an extended three year right to rescind will apply.

Note: the lender will argue “the borrower signed an acknowledgement that they received two copies each, and therefore there is no TILA violation, sorry case closed.” It seems these lenders and loan servicers forget to read the following section of the law which we will frequently have to raise.

REBUTTABLE PRESUMPTIONS UNDER TILA

Even assuming for the sake of argument that there are two signed, dated, and accurately completed notice of right to cancel documents in the lender’s possession (or the consumer’s acknowledgment of receipt of two completed copies), this merely raises a rebuttable presumption that the lender delivered two copies to the borrower. See 15 U.S.C. § 1635(c), and Johnson v, New Century Mortgage Corp., 320 F. Supp. 2D 606, 611 (E.D. Mich. 2004). Courts permit competent testimony to rebut this assertion of the lender.

The critical factor is not whether the creditor has two signed and completed copies of the notice, but whether the borrower has possession of two signed, dated, and completed copies of the notice of right to cancel. Whether borrowers were delivered a blank notice of right to cancel is a question of fact that will not be decided on a motion to dismiss. See Clay v. Johnson, 77 F.Supp. 2D 879 (N.D. Ill. 1999). The debtor’s denial of receipt of the notices and disclosures creates a question of fact that will not be decided on summary judgment even where the borrower signed acknowledgement of having received two copies of the notice. See Moore v. Mortgagestar, Inc. 2002 U.S. Dist. LEXIS 27457, (W.D. W. Va. Dec. 18, 2002). Once the borrower rebuts the presumption of delivery (through competent testimony, affidavits, etc.) the burden shifts to the creditor to prove the delivery of the documents. See Bell v. Parkway Mortgage, Inc., 309 B.R. 139, 157 (Bankr. E.D. Pa 204).

In addition, where the debtors testify that they did not receive the disclosures (even if not “totally convincing”), the debtor’s should prevail if the credit cannot produce from its own records any copy of the disclosures. See In re Pinder, 83 B.R. 905, 913.

In most cases, especially where the borrower has credibility and kept track of all their loan documents (and where a mobile notary was used to sign the loan docs) the borrower can normally make a fair argument to rebut any assertion that the lender complied with the clear and conspicuous notice requirements and can counter any such assertion with competent testimonial evidence.

THE FOLLOWING IS SOME GENERAL INFORMATION ON EXERCISING RESCISSION RIGHTS:

THREE YEAR EXTENDED RIGHT TO RESCIND

(a) Consumer’s right to rescind. (1) “In a credit transaction in which a security interest is or will be retained or acquired in a consumer’s principal dwelling, each consumer whose ownership interest is or will be subject to the security interest shall have the right to rescind the transaction….”

(b) Exercising the right of Rescission:

1. 226.23(3) – “The consumer may exercise the right to rescind until midnight of the third business day following consummation, delivery of the notice required by paragraph (b) of this section, or delivery of all material disclosures, whichever occurs last.If the required notice or material disclosures are not delivered, the right to rescind shall expire 3 years after consummation, upon transfer of all of the consumer’s interest in the property, or upon sale of the property, whichever occurs first. In the case of certain administrative proceedings, the rescission period shall be extended in accordance with section 125(f) of the Act.” There is also legal precedence for “tolling” the statute beyond three years where fraudulent concealment is shown. See Bank of New York v. Waldon, 751 N.Y.S.2d 341 (Sup. Ct. 2002).
2. 226.23(2): (2) “To exercise the right to rescind, the consumer shall notify the creditor of the rescission by mail, telegram or other means of written communication. Notice is considered given when mailed, when filed for telegraphic transmission or, if sent by other means, when delivered to the creditor’s designated place of business.” There is also legal precedence for the proposition that filing a lawsuit demanding to exercise rescission rights is also sufficient notice. See Garedakis v. Indymac Bank, 2004 WL 2254676 (N.D. Cal. Oct. 4, 2004) and Jones v. Saxon Mortgage, Inc. 161 F.2d 2 (table), 1988 WL 614150 (4^th Cir. Sept. 9, 1998).

EFFECTS OF RESCISSION UNDER TILA (IN GENERAL):

I. STEP ONE:

When a consumer rescinds a transaction, the security interest giving rise to the right of rescission becomes void and the consumer shall not be liable for any amount, including any finance charge.

THIS MEANS THE SECURITY INTEREST BECOMES VOID BY OPERATION OF LAW.

Following the 2003 Yamamoto decision (discussed below) the FRB added language to the commentary, (Section 226.23 of Regulation Z implements § 1635(b)). Which stated:

1. When a consumer rescinds a transaction, the security interest giving rise to the right of rescission becomes void and the consumer shall not be liable for any amount, including any finance charge.
2. Within 20 calendar days after receipt of a notice of rescission, the creditor shall return any money or property that has been given to anyone in connection with the transaction and shall take any action necessary to reflect the termination of the security interest.
3. If the creditor has delivered any money or property, the consumer may retain possession until the creditor has met its obligation under paragraph (d)(2) of this section. When the creditor has complied with that paragraph, the consumer shall tender the money or property to the creditor….
4. The procedures outlined in paragraphs (d)(2) and (3) of this section may be modified by court order.

Note: This suggests section (1) above is NOT altered, and so when a consumer rescinds, “the security interest becomes void.” Unless the Court alters the procedure, the Courts have the discretion.

Where the TILA statute is clear it must be followed. Courts only have the power to alter whether the lender has to tender first, or the borrower has to tender first. See Yamamoto v. Bank of New York, 329 F.3d 1167 (9th Cir. 2003), but see Semar v. Platte Valley Federal Savings & Loan Association, 791 F.2d 699, 705-06 (9th Cir.1986) (which stands for the proposition that the Court can alter the “procedure” of TILA but not the “substance” of TILA). The substance of TILA, as described above, is that the security interest becomes void upon the exercise of rescission, (although the Court can alter this procedure by requiring the borrower to tender first).

In Yamamoto, the Court held:

“There is no reason why a court that may alter the sequence of procedures after deciding that rescission is warranted, may not do so before deciding that rescission is warranted when it finds that, assuming grounds for rescission exist, rescission still could not be enforced because the borrower cannot comply with the borrower’s rescission obligations no matter what. Such a decision lies within the court’s equitable discretion, taking into consideration all the circumstances including the nature of the violations and the borrower’s ability to repay the proceeds. If … it is clear from the evidence that the borrower lacks capacity to pay back what she has received (less interest, finance charges, etc.), the court does not lack discretion to do before trial what it could do after. Determinations regarding rescission procedures shall be made on a “case-by-case basis, in light of the record adduced.”

This case illustrates that the Courts hold the ultimate power to exercise their discretion in any TILA rescission case, and does not NECESSARILY require that the borrower prove its ability to tender as a pre-condition to exercising rescission rights.

In fact, a California Court, in Pelayo v. Home Capital Funding, Slip Copy, 2009 WL 1459419, S.D.Cal.,2009, recently denied a lenders motion to dismiss a TILA rescission claim where the Defendant argued that the borrower was required to tender before rescission could be allowed (the Defendant essentially arguing that the security instrument was not automatically void), and where the Defendant argued the Court could not hear the case until the lender made its decision within 20 days (essentially arguing the TILA claim was not ripe for review). The Court held that the case could be heard and denied Defendant’s motion to dismiss. This ruling suggests that although the Court is permitted to modify the rescission procedure and require proof of tender by the Borrower first, it was also free NOT to modify the procedure and essentially treat the security instrument as being void (as the TILA statute requires), thus making the rescission case ripe for review.

There is also legal precedent which suggests that a Court could exercise its “equitable discretion” under TILA and allow the borrower to make payments over time as part of meeting the borrower’s tender requirement (essentially reducing the monthly payment over time). See. In re Stuart, 367 B.R. 541, 552 (Bankr.E.D.Pa.2007); Shepeard v. Quality Sliding & Window Factory, Inc., 730 F.Supp. 1295 (D.Del.1990) (allowing borrower to satisfy tender obligation by making monthly payments); Mayfield v. Vanguard Sav. & Loan Ass’n, 710 F.Supp. 143, 149 (E.D.Pa.1989) (allowing borrower to satisfy tender obligation by making monthly payment).

Also note, SOMETIMES (THIS IS PULLED OFF ONE LOAN) the Notice of Right to Cancel Form given to the borrower states:

“If you cancel the transaction, the mortgage/lien/security interest is also canceled. Within 20 CALENDAR DAYS after we receive your notice, we must take the steps necessary to reflect the fact that the mortgage/lien/security interest on your home has been cancelled, and we must return to you any money or property you have given us or to anyone else in connection with this transaction.

You may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property. If it is impractical or unfair for you to return the property, you must offer its reasonable value. You may offer to return the property at your home or at the location of the property. Money must be returned to the address below. If we do not take possession of the money or property within 20 CALENDAR DAYS of your offer, you may keep it without further obligation.”

This SEEMS TO BE a legal assertion, in the form of an admission, that the security interest is automatically void upon the consumer’s exercise of rescission. Upon the consumers act of “cancelling the transaction” the “mortgage/lien/security interest is also cancelled.” A creditor should not be permitted to renege on this assertion (estoppels applies) and the lender is bound by law to honor it.

II. STEP TWO

Within 20 calendar days after receipt of a notice of rescission, the creditor shall return any money or property that has been given to anyone in connection with the transaction and shall take any action necessary to reflect the termination of the security interest.

Note: THE LENDER /SERVICER WILL NOT WANT TO DO THIS SO DON’T COUNT IT. In most cases, they would rather face a judge and see if you can prove your ability to tender.

III. STEP THREE

If the creditor has delivered any money or property, the consumer may retain possession until the creditor has met its obligation under paragraph (d)(2) of this section. When the creditor has complied with that paragraph, the consumer shall tender the money or property to the creditor or, where the latter would be impracticable or inequitable, tender its reasonable value. At the consumer’s option, tender of property may be made at the location of the property or at the consumer’s residence. Tender of money must be made at the creditor’s designated place of business. If the creditor does not take possession of the money or property within 20 calendar days after the consumer’s tender, the consumer may keep it without further obligation.

Again, the Court may alter only steps two and step three per the Federal Reserve Board’s commentary set forth above. Such FRB opinion should be seen as persuasive legal authority.

THE OTHER NICE THING ABOUT A TRUTH IN LENDING RESCISSION CLAIM IS THAT IT IS APPLICABLE AGAINST ANY AND ALL LOAN ASSIGNEES WITHOUT FEAR OF A HOLDER IN DUE COURSE ARGUMENT.

ASSIGNEE LIABILTY FOR RESCSSION

While assignees are only liable for TILA “statutory damages” that are “apparent on the face of the loan documents” assignees are subject to the rescission right to the same extent as the original creditor.

15 U.S.C. §1641(c) states:

Right of rescission by consumer unaffected

Any consumer who has the right to rescind a transaction under section 1635 of this title may rescind the transaction as against any assignee of the obligation.

See also the case of Ocwen Fed. Bank v. Russell, 53 P.3d 312 (Haw Ct. App. 2002) which rejected the assignees holder in due course argument as being no defense to rescission. As other courts have held: “without such protection for the consumer the right of rescission would provide little or no effective remedy.” See Stone v. Mehlberg, 728 F. Supp. 1341, 1348, (W.D. Mich 1989). A loan servicer is deemed an assignee if it “is or was the holder of the obligation.” See 15 U.S.C. §1641(f)(1). Please see our request to identify the holder of the loan obligation or master loan servicer below.

As a final note, in regard to reviewing whether any additional damages may be levied against an assignee of a loan, in the Meyer case cited above the Court held:

“TILA Section 1641 addresses the circumstances under which an assignee may be liable for violations committed by the prior holder. For loans-such as this one-which are secured by real estate, the statute provides as follows:

Liability of assignee for consumer credit transactions secured by real property

Except as otherwise specifically provided in this subchapter, any civil action against a creditor for a violation of this subchapter, and any proceeding under section 1607 of this title against a creditor, with respect to a consumer credit transaction secured by real property may be maintained against any assignee of such creditor only if –

(A) the violation for which such action or proceeding is brought is apparent on the face of the disclosure statement provided in connection with such transaction pursuant to this subchapter; and the assignment to the assignee was voluntary.

For the purpose of this section, a violation is apparent on the face of the disclosure statement if the disclosure can be determined to be incomplete or inaccurate by a comparison among the disclosure statement, any itemization of the amount financed, the note, or any other disclosure of disbursement….”

We hereby reserve our rights and will seek to hold any assignees liable for any other violations uncovered following discovery.

Also note there is case law that dictates an injunction against foreclosure is also permitted even in the absence of a tender ability at the outset of the litigation. “Rescission premised upon tender is not mandatory but an option within the equitable powers of the court.” Avila v. Stearns Lending, 2008 WL 1378231 (C.D. Cal April 7, 2008).

Also note, the Courts have recognized the right to seek an injunction against foreclosure where this right (rescission) is ignored by the lender or assignee. See Horton v. California Credit Corp., 2009 WL 700223 (S.D.Cal.) 2009. Note, that the 9^th Circuit Court did not require an initial “tender” obligation from the borrower in granting the injunction where missing dates on the TILA notice of right to cancel were found.

CONCLUSION

If you have a refinance loan within the last three years (meaning it has not been more than three years since your last refinance, you may want to look at your previous loan file and determine whether or not you have a right to rescind the loan. In some cases, you will need to perform a mortgage loan audit to detect under-disclosure of APR and finance charges and other material disclosure violations. In other cases, look at your notice of right to cancel documents and see if you got two completed copies of the notice of right to cancel document (for each borrower or person with ownership interest in the property) and see if the rescission dates are filled in and otherwise accurate. If not, you may have an extended three year right to rescind your loan, and if so, you need to send in a rescission letter to protect your rights. If the lender refuses to acknowledge your legal rights under Truth in Lending Law (TILA) you may have grounds to file for an injunction to halt any slated foreclosures. In many cases, you will need to show some ability to tender back to the lender, the amounts which you would owe them (your loan balance) minus the amounts they owe you pursuant to their TILA tender obligation.

This area of the law can be tricky, so you may want to meet with an Attorney to discuss your case. In California, no attorney or other persona may accept advance fees for loan modifications pursuant to SB 94.

TRIAL PLAN FRAUD: WHAT IS IT AND CAN ANYTHING BE DONE LEGALLY TO STOP IT?

The following is general legal information only and should not be relied upon as legal advice or a substitute for legal advice. For specific advice, contact an attorney. Steve Vondran, Esq. is a Real Estate Attorney licensed to practice law in Arizona (serving greater Phoenix) and California (Serving most areas of California). He currently practices foreclosure defense and predatory lending law. He can be emailed with comments at steve@vondranlaw.com

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Introduction: Many of the major lenders have been implementing President Obama’s Making Home Affordable Loan Modification Program (HAMP). The details of the program provide that lenders who believe that California and Arizona homeowners (these are the two states I am licensed to practice law in but the program applies in other states as well) qualify for loan modification programs should provide the homeowner with a three month “trial plan” modification program.

The lenders have been rolling out HAMP and have been sending homeowners these three month trial plan agreements.

For the purposes of this article I will refer to these agreements as “contracts” for the simple reason that they look like contracts (they have terms and conditions like a contract and signature blocks for both parties). The homeowner typically performs as if they are adhering in good faith to the terms of the contract, and the lender is accepting payments on the stated understanding that of the homeowner makes the three required payments set forth in the “contract” that the “lender” (see our produce the note articles) will provide the homeowner the badly needed loan modification that the lender has agreed to give if all payments are made under the trial plan, and assuming no material representations of the homeowner have changed.

Everything sounds groovy so far. The lenders appear to be working out loan modifications and saving neighborhoods from financial disaster, and the bailout money appears to be put to a worthwhile use.

What might/could happen next is interesting, yet disturbing at the same time:

1. The borrower typically makes all of their three scheduled trial plan payments on time
2. The borrower also submits all of the requested financial documentation in complying with the terms of the contract
3. After the third and supposedly final payment is made, we are learning some homeowners are told that either (a) they do not qualify for the loan modification (b) there are missing documents and more must be submitted before a “final decision” can be reached, and or (c) they get a whole new trial plan offer as if the homeowner is supposed to start all over again.
4. Another variation is getting the final loan mod and being asked to submit all the final documentation on the very next day (which is literally impossible to do, but which raises a “mailbox rule” issue for contract lawyers).

Bottom line, the promised final mod seems to be getting stuck in the loan modification pipeline. Is this being intentionally done? Are the lenders simply overloaded? Are they playing games with homeowners so they can simply “suck” more payments out of California and Arizona homeowners who may not be making their mortgage payments in the hopes of a loan modification (some people are told you will not be considered for a loan modification unless you are late on your payments – there is some truth to that but “imminent threat of being late” on the mortgage is supposed to be considered as well).

So we are left with a bunch of homeowners scratching their heads as to what is happening with the federal bailout money and communities that seek rising foreclosure stripping away their equity asking the same questions. Are the lenders engaged in fraud? Is this a bad faith breach of contract? Are the lenders required to follow-through with the loan modification when the borrower complies with the terms of the modification trial plan agreement?

LET’S DISCUSS SOME BASIC LEGAL INFORMATION AND ATTACKS THAT MAY BE USED TO FORCE THE LENDER TO COMPLY WITH THE AGREEMENTS (SPECIFIC PERFORMANCE OF THE CONTRACT).

(1) Fraud / Negligent Misrepresentation

Generally speaking, the elements of fraud are: (1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity; (3) intent to defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting damages. Lazar v. Superior Court, 12 Cal. 4th 631, 638, 49 Cal. Rptr. 2d 377 (1996).

The elements of negligent misrepresentation are similar to intentional fraud except for knowledge that the representation is false. Charnay v. Cobert, 145 Cal. App. 4th 170, 184-85, 51 Cal. Rptr. 3d 471, 482 (2006). In a claim for negligent misrepresentation, the elements are: (1) the misrepresentation of a past or existing material fact; (2) without reasonable ground for believing it to be true; (3) with intent to induce another’s reliance on the fact misrepresented; (4) justifiable reliance on the misrepresentation; and (5) resulting damages. Id.; see also Alliance Mortgage Co. v. Rothwell, 10 Cal. 4th 1226, 1239, fn. 4, 44 Cal. Rptr. 2d 352 (1995) (negligent misrepresentation is a species of the tort of deceit and like fraud, requires a misrepresentation, justifiable reliance, and damages).

In the loan modification trial plan offer setting the lender purports (depending upon the language of the trial plan offer – each document must be reviewed to make an accurate determination), the lender is acting as if the borrower applies for a loan modification. If the lender / loan servicer have absolutely no intent to provide a loan modification at all, (legal discovery would be required in most cases to try to prove this) then it would appear the lender is doing nothing more than to try to obtain additional loan payments from the borrower, and to ultimately “time release” the foreclosure of the property onto the marketplace.

These are items that may be tough to prove, but as some of the article on our website indicate, lenders are aware that not all loan modification trial plans will result in a successful loan modification. Where the lender/servicer has absolutely no intent to provide a modification, the trial plan offer may be fraudulent, and as discussed below, violate the duty of good faith and fair dealing implied in every contract.

Again, however, the lenders/servicers will probably try to argue that the trial plan agreement is not really a contract at all, but rather an offer to negotiate or some type of preliminary negotiation. Again, you are well advised to have an attorney review your trial plan agreement.

(2) Fraudulent Inducement

This is a claim which is like a hybrid claim of breach of contract and tort. The essence of the claim is that the defendant fraudulently induced a party to enter into a contract.

This cause of action generally requires knowing and intentional false statements of material fact (a material factual omission may not be sufficient but should be explored) which reasonably induce a homeowner to rely on the statements, and which false statements were relied upon to their detriment.

Where this action lies, the Courts may allow specific performance of the contract as a remedy and where fraud is clearly shown, punitive damages may be available.

(3) Breach of Covenant of Good Faith and Fair Dealing

Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.” Carma Developers, Inc. v. Marathon Dev. Cal., Inc., 2 Cal.4th 342, 371, 6 Cal.Rptr.2d 467, 826 P.2d 710 (1992) (quoting Restatement (Second) of Contracts § 205). “The covenant of good faith finds particular application in situations where one party is invested with a discretionary power affecting the rights of another. Such power must be exercised in good faith. See Marsu, B.V. v. Walt Disney Co., 185 F.3d 932, C.A.9 (Cal.),1999.

The Cause of action for tortious breach of implied covenant of good faith and fair dealing exists if special relationship between parties is characterized by elements of public interest, adhesion, and fiduciary responsibility. Kittredge Sports Co. v. Superior Court, 213 Cal.App.3d 1045, 261 Cal.Rptr. 857

The duty of good faith and fair dealing arises from every contract as an implied covenant generating both a contractual obligation and a duty in tort. Hess v. Transamerica Occidental Life Ins. Co., 235 Cal.Rptr. 715. The Implied covenant of good faith and fair dealing is an equitable doctrine which may validate otherwise unenforceable agreements. It is a doctrine of equity that the courts may use to achieve a just result when a contract (ex. The loan modification trial plan agreement) is unclear regarding a party’s obligations and the doctrine can then allow the court to enforce what might otherwise be deemed an unenforceable agreement.

The implied promise requires each contracting party to refrain from doing anything to injure the right of the other to receive the benefits of the agreement Egan v. Mutual of Omaha Ins. Co., supra, 24 Cal.3d at p. 818, 169 Cal.Rptr. 691, 620 P.2d 141.

A “breach of a specific provision of the contract is not a necessary prerequisite” to a breach of an implied covenant of good faith and fair dealing. Carma Developers, Inc. v. Marathon Dev. Cal., Inc., 2 Cal.4th 342, 371, 6 Cal.Rptr.2d 467, 826 P.2d 710 (1992) “[T]he covenant is implied to prevent a contracting party from engaging in conduct which (while not technically transgressing the express covenant) frustrates the other party’s rights of the benefits of the contract.” See Los Angeles Equestrian Ctr., Inc. v. City of Lose Angeles, 17 Cal.App.4^th, 434, 447, 21 Cal.Rptr.2d 313 (1993).

As a general principle, there can be no breach of the implied promise or covenant of good faith and fair dealing where the contract expressly permits the actions being challenged, and the defendant acts in accordance with the express terms of the contract. See Clark v. America’s Favorite Chicken Co., 110 F.3d 295 (5th Cir. 1997) (applying Louisiana law)

This is so even where the contractual provision at issue is one that purports to grant to the defendant absolute discretion to take certain actions or engage in certain conduct under the contract; such a provision, stated simply, permits the defendant substantial latitude, and as long as the discretion is exercised as permitted under the contract, and without evident bad faith motive or malice, its exercise cannot be a breach of the more general implied promise of good faith and fair dealing. See Clark v. America’s Favorite Chicken Co., 110 F.3d 295 (5th Cir. 1997).

Yet, even where a defendant is given absolute discretion, it must exercise that discretion in good faith. See Travellers Intern., A.G. v. Trans World Airlines, Inc., 41 F.3d 1570 (2d Cir. 1994) . Thus, a party who “evades the spirit of the contract,” willfully renders imperfect performance, or interferes with performance by the other party, may be liable for breach of the implied covenant of good faith and fair dealing. See Paul v. Howard University, 754 A.2d 297, 145 Ed. Law Rep. 702 (D.C. 2000).

Some courts have focused on the reasonable expectations of the parties, (See Savers Federal Sav. and Loan Ass’n v. Home Federal Sav. and Loan Ass’n, 721 F. Supp. 940, 945 (W.D. Tenn. 1989) while others have focused on whether the action taken by the breaching party was arbitrary and capricious. See Coles Dept. Store v. First Bank (N.A.)–Billings, 240 Mont. 226, 783 P.2d 932, 936, 11 U.C.C. Rep. Serv. 2d 1074 (1989).

In determining whether a party has breached the obligation or covenant of good faith and fair dealing, a court must examine not only the express language of the parties’ contract, but also any course of performance or course of dealing that may exist between the parties. See Sanpete Water Conservancy Dist. v. Carbon Water Conservancy Dist., 226 F.3d 1170 (10th Cir. 2000) (applying Utah law). Note: The court may be unwilling to imply any duty that the parties could not reasonably expect from the terms of their contract). Hejmadi v. Amfac, Inc., 202 Cal. App. 3d 525, 547-549, 249 Cal. Rptr. 5, (1st Dist. 1988).

Generally speaking, a Breach of the covenant is a breach of contract. Tort recovery for breach of the covenant of good faith and fair dealing is available only in limited circumstances, generally involving a special relationship between the contracting parties, such as the relationship between an insured and its insurer.

Potential Damages: In general, contract damages are available (not including pain and suffering or emotional damages) but the “benefit of the bargain” damages (consequential damages and perhaps specific performance of the contract – forcing the other party to provide the loan modification as agreed in the trial plan modification offer). See Pasadena Live, LLC v. City of Pasadena, 114 Cal. App. 4th 1089, 8 Cal. Rptr. 3d 233 (2d Dist. 2004), reh’g denied, (Feb. 4, 2004).

(4) Violation of California Civil Code Section 17200

California’s unfair competition law (Business and Professions Code Section 17200 et seq.) defines “unfair competition” to mean and include “any unlawful, unfair or fraudulent business act or practice.” See Kasky v. Nike, Inc., 27 Cal. 4th 939, 949, 119 Cal. Rptr. 2d 296 (2002). By defining unfair competition to include any unlawful business act or practice, “the UCL permits violations of other laws to be treated as unfair competition that is independently actionable.” In essence, an action based on the UCL to redress an unlawful business practice “borrows” violations from other laws and treats these violations, when committed pursuant to business activity, as unlawful practices independently actionable under Section 17200 and subject to the distinct remedies provided there under. See Stop Youth Addiction, Inc. v. Lucky Stores, Inc., 17 Cal. 4th 553, 566-67, 71 Cal. Rptr. 2d 731 (1998).

There is no single definition for the phrase “unfair business practices.” It is an evolving concept reflecting the ingenuity of unscrupulous business persons in concocting new schemes to gain advantage at someone else’s expense. The existence of an unfair business practice is a question of fact determined in light of all the circumstances surrounding a case. See People ex rel. Bill Lockyer v. Fremont Life Ins. Co., 104 Cal.App.4th 508, 128 Cal.Rptr.2d 463, Cal.App. 2 Dist.,2002.

Sperry & Hutchinson, supra, 405 U.S. 233, 92 S.Ct. 898, 31 L.Ed.2d 170, describes the test for fairness as one developed by the Federal Trade Commission to determine “whether a practice that is neither in violation of the antitrust laws nor deceptive is nonetheless unfair.” The test as stated by the court is as follows: “ ‘(1) whether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise-whether, in other words, it is within at least the penumbra of some common-law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers (or competitors or other businessmen).’

It is not necessary that all three components of this standard be satisfied; a practice may be unfair because of the degree to which it meets one of these criteria, or because to a lesser extent it meets all three. Expert testimony may be used to prove that business conduct is unfair. The court must determine on a case-by-case basis whether the alleged conduct is unethical, oppressive, or unscrupulous, or whether it was an appropriate exercise of good business judgment. This is a balancing test, whereby the fact finder weighs the utility of the offending party’s conduct against the gravity of harm to the injured party or the public at large.

(5) Violation of California Consumer Legal remedies Act (Cal Civ. Code Section 1770 et seq.)

California’s Consumers Legal Remedies Act (CLRA) establishes a nonexclusive statutory remedy for unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the SALE OR LEASE OF GOODS OR SERVICES to any consumer. See Gonzalez v. Proctor and Gamble Co., S.D.Cal.2007, 247 F.R.D. 616.

Purpose of California Consumers Legal Remedies Act (CLRA) is to attempt to alleviate social and economic problems stemming from deceptive business practices. See America Online, Inc. v. Superior Court (App. 1 Dist. 2001) 108 Cal.Rptr.2d 699.

I. Loan transactions are “goods or services” under the Act.

California Civil Code section 1754 provides that the CLRA “shall not apply to any transaction which provides for the construction, sale, or construction and sale of an entire residence or … for the sale of a lot or parcel of real property, including any site preparation incidental to such sale.” However, this provision bars application of the CLRA only to transactions for the sale or construction of real property; it does not also exclude financial services related to such transactions.

Cases in support of this proposition include:

1. Jefferson v. Chase Home Finance LLC, No. C06-6510, 2007 WL 1302984 (N.D.Cal. May 3, 2007) (concluding that the loan transactions between a mortgage finance company and the plaintiff involved “more than the provision of a loan; they also include the financial services of managing the loan.”)
2. Knox v. Ameriquest Mortgage Co., No. C05-00240, 2005 WL 1910927 (N.D.Cal. Aug. 10, 2005) (finding that, in the context of predatory lending allegations and after a review of the case law, “California courts generally find financial transactions to be subject to the CLRA.”);
3. In re Ameriquest Mortgage Co., No 05-CV-7097, 2007 WL 1202544, (N.D.Ill. Apr. 23, 2007) (stating, in dicta, that “it is not inconceivable that Plaintiffs could prove the existence of tangential ‘services’ associated with their residential mortgages and establish that these transactions were covered by the CLRA.”).
4. In an unreported decision (Jefferson v. Chase Home Finance, LLC – 2007 WL 1302984, N.D.Cal., 2007.) the Court stated:

“the arranging of the loan, including but not limited to its origination, processing, documentation, wire-transmittal and underwriting constitutes ‘services’ within the meaning of subsection(b) of § 1761 of the CLRA……Plaintiffs did not seek just a loan; they sought defendants’ services in developing an acceptable refinancing plan by which they could remain in possession of their home. Thus, unlike the Berry case cited above……the present case involves more than the mere extension of a credit line. Instead, the circumstances here deal not just with the mortgage loan itself, but also with the services involved in developing, securing and maintaining plaintiffs’ loan…..in fact, in an effort to create an appropriate refinancing package, plaintiffs met with defendants’ agent three times before finally agreeing on a payment plan that plaintiffs and defendants found acceptable.”

II. Prohibited Acts

Section 1770 prohibits, (among other things), the following:

Knowingly misrepresenting the character, uses and benefits of its products and services; Knowingly misrepresenting the standard and quality of products and services; Advertising goods or services with intent not to sell them as advertised; Misrepresenting that the consumer will receive…..an economic benefit if the earning of the benefit is contingent on an event to occur subsequent to the consummation of the transaction and, inserting an unconscionable provision in the contract (the Court will look to California Civil Code section 1670.5 in making the unconscionability determination).

CASES ILLUMINATING THE UNCONSCIONABILITY PRINCIPLE INCLUDE THE FOLLOWING:

Civil Code section 1670.5 follows the law developed primarily in the sale of goods, governed by the Uniform Commercial Code, in enabling courts to grant relief from unconscionable contracts or clauses. “The principle is one of the prevention of oppression and unfair surprise.” Whether a contract is unconscionable or not is a question of law for the Court. Shadoan v. World Savings & Loan Assn., 219 Cal.App.3d 97, 268 Cal.Rptr. 207 (1990).

As stated by the court in the seminal case of Williams v. Walker-Thomas Furniture Company (D.C.Cir.1965) 350 F.2d 445, 449, “Unconscionability has generally been recognized to include an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.”

Absence of meaningful choice occurs when a party to a bargain has little choice but to accept the terms stated by the other party. Hidden Terms in an agreement may qualify to show absence of meaningful terms.” See A & M Produce Co. v. FMC Corp. 135 Cal.App.3d 473, 486 (1982).

A contract may be procedurally unconscionable under California law when the party with substantially greater bargaining power presents a take-it-or-leave it contract to a customer, even if the customer has a meaningful choice as to service providers. Shroyer v. New Cingular Wireless Services, Inc., C.A.9 (Cal.)2007, 498 F.3d 976.

Discussion: California and Arizona homeowners (greater phoenix area) who are lead to believe that they qualify for a loan modification given the representations made by and concerning the trial plan modification program, may have a claim to assert for damages. It is not certain you can prove that the lenders loan modification services are covered by the act, but it does appear to be a claim worth investigating at any rate.

III. DAMAGES AVAILABLE

(A) Any consumer who suffers any damage as a result of the use or employment by any person of a method, act, or practice declared to be unlawful by Section 1770 may bring an action against that person to recover or obtain any of the following:

1. Actual damages, but in no case shall the total award of damages in a class action be less than one thousand dollars ($1,000 minimum).
2. An order enjoining the methods, acts, or practices.
3. Restitution of property.
4. Punitive damages.
5. Any other relief that the court deems proper.

(B) Any consumer who is a senior citizen or a disabled person, as defined in subdivisions (f) and (g) of Section 1761, as part of an action under subdivision (a), may seek and be awarded, in addition to the remedies specified therein, up to five thousand dollars ($5,000) where the trier of fact does all of the following:

(C) Finds that the consumer has suffered substantial physical, emotional, or economic damage resulting from the defendant’s conduct.

NOTE: GENERALLY, WHEN ASSERTING A CLAIM UNDER THE CALIFORNIA LEGAL REMEDIES ACT, A POTENTIAL PLAINTIFF MUST GIVE THE LENDER A 30 DAY RIGHT TO CURE NOTICE THAT GIVES THEM THE OPPORTUNITY TO REMEDY THEIR VIOLATION PRIOR TO FILING A LAWSUIT.

CONSLUSION:

If you were given a trial plan loan modification offer, agreement, or other documents, and you made payments under the trial plan as agreed in the loan mod document, and any material representations that you made pursuant to the agreement DID NOT CHANGE from the time you entered into the contract, to the time your final payment was made; and if the lender or loan servicer refused to follow through with the trial plan, said you don’t qualify for a loan modification, or sold you house from underneath you, you may need to see a real estate, predatory lending, and foreclosure attorney to review whether or not you have a valid legal case to assert for either specific performance of the contract, or potentially money damages, including potentially punitive damages.

There are causes of action that may be applied in the loan modification trial plan context such as fraud, deceit, fraudulent inducement to contract, breach of implied covenant of good faith and fair dealing, and/or violation of the California Legal Remedies Act. Lenders and loan servicers, who were well financed by the federal bailout, should not be preying in California and Arizona homeowners in the greater Phoenix area by trying to “trick” them into making additional loan payments were foreclosure is inevitable given the lender/loan servicer’s mindset as to whether or not you are truly a loan modification candidate.

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Attorney Steve Vondran can be reached at steve@vondranlaw.com or toll free at (877) 276-5084. Information about trial plan fraud can be found at www.TrialPlanFraud.com

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ABOUT US:

The Law Offices of Steve Vondran in licensed to practice law in California and Arizona. Steve Vondran, Esq. is a licensed attorney and real estate broker in California and Arizona.

He can be reached by email at steve@vondranlaw.com or toll free (877) 276-5084

Offices:

Arizona Office (Esplanade): 2415 E. Camelback Road, Suite 700, Phoenix, AZ, 85020.California Office (Fashion Island): 620 Newport Center Drive, Suite 1100, Newport Beach, CA 92660

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Our Real Estate Law Services:

1. Loan Modifications / Loan Workouts (World Savings and Wachovia Loans
2. Commercial Lease Modifications
3. DRE audits, hearings and investigations
4. Real Estate Broker admissions cases
5. Foreclosure Defense
6. Mortgage Law & Predatory Law
7. Phoenix Real Estate Zoning Attorney – Greater Phoenix (Scottsdale, Goodyear, Buckeye, Casa Grande etc.)
8. Phoenix Eminent Domain Attorney / Inverse Condemnation / Prop 207 (Greater Phoenix)
9. Real Estate Arbitration, Litigation and Mediation
10. Foreclosure Consultant Contracts / Loan Modification Contracts
11. Real Estate LLC’s & Incorporations
12. Real Estate Partnership Law
13. Quiet Title Actions
14. Forensic Loan Audits – Greater Phoenix (Truth in Lending (TILA), RESPA, HOEPA, Fraud, etc).

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KEYWORDS: ARIZONA FORECLOSURE DEFENSE ATTORNEY / CALIFORNIA FORECLOSURE DEFENSE ATTORNEY / PHOENIX FORECLOSURE DEFENSE ATTORNEY / PHOENIX FORECLOSURE DEFENSE LAWYER / SCOTTSDALE FORECLOSURE DEFENSE ATTORNEY / SCOTTSDALE FORECLOSURE DEFENSE LAWYER / ORANGE COUNTY PREDATORY LENDING LAWYER / ORANGE COUNTY FORECLOSURE DEFENSE ATTORNEY / ORANGE COUNTY FORECLOSURE DEFENSE LAYWER / TRUTH IN LENDING LAWYER / TRUTH IN LENDING ATTORNEY / SOUTHER CALIFORNIA MORTGAGE LAW ATTORNEY / MORTGAGE LAWYER / RIVERSIDE FORECLOSURE ATTORNEY / RIVERSIDE FORECLOSURE LAWYER / RESPA LAWYER / RESPA ATTORNEY / FORECLOSURE DEFENSE LAW / PHOENIX LOAN MODIFICATION ATTORNEY / PHOENIX FORECLOSURE DEFENSE LAWYER / ORANGE COUNTY REAL ESTATE LAWYER / ORANGE COUNTY PREDATORY LENDING AND MORTGAGE LITIGATION ATTORNEY / NEWPORT BEACH FORECLOSURE DEFENSE LAWYER / NEWPORT BEACH FORECLOSURE DEFENSE ATTORNEY / CALIFORNIA FORECLOSURE DEFENSE LAWYER / PREDATORY LENDING LAWYER / LOAN RESCISSION ATTORNEY / TILA RESCISSION LAWYER / WACHOVIA OPTION ARM LOAN / WORLD SAVINGS OPTION ARM LOAN / RESCIND MY LOAN

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HELPFUL FORECLOSURE DEFENSE LINKS:

1. SUBMIT YOUR FORECLOSURE / LOAN SCENARIO: WWW.LOANMODSOLUTIONS.NET
2. SUBMIT YOUR LOAN MODIFICATION SCAM SCENARIO: WWW.LOANMODIFICATIONRIPOFF.NET
3. LITIGATING OPTION ARM LOANS WWW.OPTIONARMLAWYER.COM
4. CALIFORNIA FORECLOSURE DEFENSE ATTORNEY STEVE VONDRAN WEBSITE: WWW.VONDRANLEGAL.COM
5. ARIZONA FORECLOSURE DEFENSE ATTORNEY STEVE VONDRAN WEBSITE: WWW.VONDRANLEGAL.COM
6. STEVE VONDRAN REAL ESTATE WEBSITE WWW.VONDRANLAW.COM
7. INFORMATION ON TRIAL PLAN FRAUD: WWW.TRIALPLANFRAUD.COM
8. FORECLOSURE DEFENSE RADIO SHOW: WWW.LOANMODRADIO.COM
9. INFORMATION ON TRUTH IN LENDING LOAN RESCISSION: WWW.RESCINDMYLOAN.NET
10. INFORMATION ON PRODUCE THE NOTE: WWW.PRODUCETHENOTEATTRORNEY.COM

SOME OF THE ABOVE WEBSITES CAN BE VIEWED AT WWW.CUSTOMLAWNBLOGS.COM (CREATOR OF MY LEGAL BLOGS). THEY ARE OPERATED BY WWW.CONTINGENCYCASE.COM WEBSITE WHICH IS A WEBSITE DIRECTORY FOR CONTINGENCY CASE LAWYERS ACROSS THE UNITED STATES).

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NOTICE:

The foregoing information is general legal information only and shall not be relied upon as legal advice, or a substitution for legal advice. If you have specific legal questions about your foreclosure case, or loan modification case you should seek out the advice of a real estate attorney. In addition, the information posted above may not be 100% complete, accurate or up-to-date. The Law Offices of Steve Vondran is licensed to practice law in the state of Arizona and California and only seeks to solicit and serve Clients in these two states. Steve Vondran, Esq. is a licensed attorney and real estate broker in California and Arizona. He can be reached by email at steve@vondranlaw.com or toll free (877) 276-5084. This is an advertisement and communication pursuant to State Bar Rules. Please do not send us private or confidential information through any of our above-listed websites. Sending us an email does not create an attorney-client relationship (only signing a legal retainer will do this).

TRIAL PLAN FRAUD: WHAT IS IT AND CAN ANYTHING BE DONE LEGALLY TO STOP IT?

The following is general legal information only and should not be relied upon as legal advice or a substitute for legal advice. For specific advice, contact an attorney. Steve Vondran, Esq. is a Real Estate Attorney licensed to practice law in Arizona (serving greater Phoenix) and California (Serving most areas of California). He currently practices foreclosure defense and predatory lending law. He can be emailed with comments at steve@vondranlaw.com

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Introduction: Many of the major lenders have been implementing President Obama’s Making Home Affordable Loan Modification Program (HAMP). The details of the program provide that lenders who believe that California and Arizona homeowners (these are the two states I am licensed to practice law in but the program applies in other states as well) qualify for loan modification programs should provide the homeowner with a three month “trial plan” modification program.

The lenders have been rolling out HAMP and have been sending homeowners these three month trial plan agreements.

For the purposes of this article I will refer to these agreements as “contracts” for the simple reason that they look like contracts (they have terms and conditions like a contract and signature blocks for both parties). The homeowner typically performs as if they are adhering in good faith to the terms of the contract, and the lender is accepting payments on the stated understanding that of the homeowner makes the three required payments set forth in the “contract” that the “lender” (see our produce the note articles) will provide the homeowner the badly needed loan modification that the lender has agreed to give if all payments are made under the trial plan, and assuming no material representations of the homeowner have changed.

Everything sounds groovy so far. The lenders appear to be working out loan modifications and saving neighborhoods from financial disaster, and the bailout money appears to be put to a worthwhile use.

What happens next is interesting, yet disturbing at the same time:

1. The borrower typically makes all of their three scheduled trial plan payments on time
2. The borrower also submits all of the requested financial documentation in complying with the terms of the contract
3. After the third and supposedly final payment is made, we are learning some homeowners are told that either (a) they do not qualify for the loan modification (b) there are missing documents and more must be submitted before a “final decision” can be reached, and or (c) they get a whole new trial plan offer as if the homeowner is supposed to start all over again.
4. Another variation is getting the final loan mod and being asked to submit all the final documentation on the very next day (which is literally impossible to do, but which raises a “mailbox rule” issue for contract lawyers).

Bottom line, the promised final mod seems to be getting stuck in the loan modification pipeline. Is this being intentionally done? Are the lenders simply overloaded? Are they playing games with homeowners so they can simply “suck” more payments out of California and Arizona homeowners who may not be making their mortgage payments in the hopes of a loan modification (some people are told you will not be considered for a loan modification unless you are late on your payments – there is some truth to that but “imminent threat of being late” on the mortgage is supposed to be considered as well).

So we are left with a bunch of homeowners scratching their heads as to what is happening with the federal bailout money and communities that seek rising foreclosure stripping away their equity asking the same questions. Are the lenders engaged in fraud? Is this a bad faith breach of contract? Are the lenders required to follow-through with the loan modification when the borrower complies with the terms of the modification trial plan agreement?

LET’S DISCUSS SOME BASIC LEGAL INFORMATION AND ATTACKS THAT MAY BE USED TO FORCE THE LENDER TO COMPLY WITH THE AGREEMENTS (SPECIFIC PERFORMANCE OF THE CONTRACT).

(1) Fraud / Negligent Misrepresentation

Generally speaking, the elements of fraud are: (1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity; (3) intent to defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting damages. Lazar v. Superior Court, 12 Cal. 4th 631, 638, 49 Cal. Rptr. 2d 377 (1996).

The elements of negligent misrepresentation are similar to intentional fraud except for knowledge that the representation is false. Charnay v. Cobert, 145 Cal. App. 4th 170, 184-85, 51 Cal. Rptr. 3d 471, 482 (2006). In a claim for negligent misrepresentation, the elements are: (1) the misrepresentation of a past or existing material fact; (2) without reasonable ground for believing it to be true; (3) with intent to induce another’s reliance on the fact misrepresented; (4) justifiable reliance on the misrepresentation; and (5) resulting damages. Id.; see also Alliance Mortgage Co. v. Rothwell, 10 Cal. 4th 1226, 1239, fn. 4, 44 Cal. Rptr. 2d 352 (1995) (negligent misrepresentation is a species of the tort of deceit and like fraud, requires a misrepresentation, justifiable reliance, and damages).

In the loan modification trial plan offer setting the lender purports (depending upon the language of the trial plan offer – each document must be reviewed to make an accurate determination), the lender is acting as if the borrower applies for a loan modification. If the lender / loan servicer have absolutely no intent to provide a loan modification at all, (legal discovery would be required in most cases to try to prove this) then it would appear the lender is doing nothing more than to try to obtain additional loan payments from the borrower, and to ultimately “time release” the foreclosure of the property onto the marketplace.

These are items that may be tough to prove, but as some of the article on our website indicate, lenders are aware that not all loan modification trial plans will result in a successful loan modification. Where the lender/servicer has absolutely no intent to provide a modification, the trial plan offer may be fraudulent, and as discussed below, violate the duty of good faith and fair dealing implied in every contract.

Again, however, the lenders/servicers will probably try to argue that the trial plan agreement is not really a contract at all, but rather an offer to negotiate or some type of preliminary negotiation. Again, you are well advised to have an attorney review your trial plan agreement.

(2) Fraudulent Inducement

This is a claim which is like a hybrid claim of breach of contract and tort. The essence of the claim is that the defendant fraudulently induced a party to enter into a contract.

This cause of action generally requires knowing and intentional false statements of material fact (a material factual omission may not be sufficient but should be explored) which reasonably induce a homeowner to rely on the statements, and which false statements were relied upon to their detriment.

Where this action lies, the Courts may allow specific performance of the contract as a remedy and where fraud is clearly shown, punitive damages may be available.

(3) Breach of Covenant of Good Faith and Fair Dealing

Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.” Carma Developers, Inc. v. Marathon Dev. Cal., Inc., 2 Cal.4th 342, 371, 6 Cal.Rptr.2d 467, 826 P.2d 710 (1992) (quoting Restatement (Second) of Contracts § 205). “The covenant of good faith finds particular application in situations where one party is invested with a discretionary power affecting the rights of another. Such power must be exercised in good faith. See Marsu, B.V. v. Walt Disney Co., 185 F.3d 932, C.A.9 (Cal.),1999.

The Cause of action for tortious breach of implied covenant of good faith and fair dealing exists if special relationship between parties is characterized by elements of public interest, adhesion, and fiduciary responsibility. Kittredge Sports Co. v. Superior Court, 213 Cal.App.3d 1045, 261 Cal.Rptr. 857

The duty of good faith and fair dealing arises from every contract as an implied covenant generating both a contractual obligation and a duty in tort. Hess v. Transamerica Occidental Life Ins. Co., 235 Cal.Rptr. 715. The Implied covenant of good faith and fair dealing is an equitable doctrine which may validate otherwise unenforceable agreements. It is a doctrine of equity that the courts may use to achieve a just result when a contract (ex. The loan modification trial plan agreement) is unclear regarding a party’s obligations and the doctrine can then allow the court to enforce what might otherwise be deemed an unenforceable agreement.

The implied promise requires each contracting party to refrain from doing anything to injure the right of the other to receive the benefits of the agreement Egan v. Mutual of Omaha Ins. Co., supra, 24 Cal.3d at p. 818, 169 Cal.Rptr. 691, 620 P.2d 141.

A “breach of a specific provision of the contract is not a necessary prerequisite” to a breach of an implied covenant of good faith and fair dealing. Carma Developers, Inc. v. Marathon Dev. Cal., Inc., 2 Cal.4th 342, 371, 6 Cal.Rptr.2d 467, 826 P.2d 710 (1992) “[T]he covenant is implied to prevent a contracting party from engaging in conduct which (while not technically transgressing the express covenant) frustrates the other party’s rights of the benefits of the contract.” See Los Angeles Equestrian Ctr., Inc. v. City of Lose Angeles, 17 Cal.App.4^th, 434, 447, 21 Cal.Rptr.2d 313 (1993).

As a general principle, there can be no breach of the implied promise or covenant of good faith and fair dealing where the contract expressly permits the actions being challenged, and the defendant acts in accordance with the express terms of the contract. See Clark v. America’s Favorite Chicken Co., 110 F.3d 295 (5th Cir. 1997) (applying Louisiana law)

This is so even where the contractual provision at issue is one that purports to grant to the defendant absolute discretion to take certain actions or engage in certain conduct under the contract; such a provision, stated simply, permits the defendant substantial latitude, and as long as the discretion is exercised as permitted under the contract, and without evident bad faith motive or malice, its exercise cannot be a breach of the more general implied promise of good faith and fair dealing. See Clark v. America’s Favorite Chicken Co., 110 F.3d 295 (5th Cir. 1997).

Yet, even where a defendant is given absolute discretion, it must exercise that discretion in good faith. See Travellers Intern., A.G. v. Trans World Airlines, Inc., 41 F.3d 1570 (2d Cir. 1994) . Thus, a party who “evades the spirit of the contract,” willfully renders imperfect performance, or interferes with performance by the other party, may be liable for breach of the implied covenant of good faith and fair dealing. See Paul v. Howard University, 754 A.2d 297, 145 Ed. Law Rep. 702 (D.C. 2000).

Some courts have focused on the reasonable expectations of the parties, (See Savers Federal Sav. and Loan Ass’n v. Home Federal Sav. and Loan Ass’n, 721 F. Supp. 940, 945 (W.D. Tenn. 1989) while others have focused on whether the action taken by the breaching party was arbitrary and capricious. See Coles Dept. Store v. First Bank (N.A.)–Billings, 240 Mont. 226, 783 P.2d 932, 936, 11 U.C.C. Rep. Serv. 2d 1074 (1989).

In determining whether a party has breached the obligation or covenant of good faith and fair dealing, a court must examine not only the express language of the parties’ contract, but also any course of performance or course of dealing that may exist between the parties. See Sanpete Water Conservancy Dist. v. Carbon Water Conservancy Dist., 226 F.3d 1170 (10th Cir. 2000) (applying Utah law). Note: The court may be unwilling to imply any duty that the parties could not reasonably expect from the terms of their contract). Hejmadi v. Amfac, Inc., 202 Cal. App. 3d 525, 547-549, 249 Cal. Rptr. 5, (1st Dist. 1988).

Generally speaking, a Breach of the covenant is a breach of contract. Tort recovery for breach of the covenant of good faith and fair dealing is available only in limited circumstances, generally involving a special relationship between the contracting parties, such as the relationship between an insured and its insurer.

Potential Damages: In general, contract damages are available (not including pain and suffering or emotional damages) but the “benefit of the bargain” damages (consequential damages and perhaps specific performance of the contract – forcing the other party to provide the loan modification as agreed in the trial plan modification offer). See Pasadena Live, LLC v. City of Pasadena, 114 Cal. App. 4th 1089, 8 Cal. Rptr. 3d 233 (2d Dist. 2004), reh’g denied, (Feb. 4, 2004).

(4) Violation of California Civil Code Section 17200

California’s unfair competition law (Business and Professions Code Section 17200 et seq.) defines “unfair competition” to mean and include “any unlawful, unfair or fraudulent business act or practice.” See Kasky v. Nike, Inc., 27 Cal. 4th 939, 949, 119 Cal. Rptr. 2d 296 (2002). By defining unfair competition to include any unlawful business act or practice, “the UCL permits violations of other laws to be treated as unfair competition that is independently actionable.” In essence, an action based on the UCL to redress an unlawful business practice “borrows” violations from other laws and treats these violations, when committed pursuant to business activity, as unlawful practices independently actionable under Section 17200 and subject to the distinct remedies provided there under. See Stop Youth Addiction, Inc. v. Lucky Stores, Inc., 17 Cal. 4th 553, 566-67, 71 Cal. Rptr. 2d 731 (1998).

There is no single definition for the phrase “unfair business practices.” It is an evolving concept reflecting the ingenuity of unscrupulous business persons in concocting new schemes to gain advantage at someone else’s expense. The existence of an unfair business practice is a question of fact determined in light of all the circumstances surrounding a case. See People ex rel. Bill Lockyer v. Fremont Life Ins. Co., 104 Cal.App.4th 508, 128 Cal.Rptr.2d 463, Cal.App. 2 Dist.,2002.

Sperry & Hutchinson, supra, 405 U.S. 233, 92 S.Ct. 898, 31 L.Ed.2d 170, describes the test for fairness as one developed by the Federal Trade Commission to determine “whether a practice that is neither in violation of the antitrust laws nor deceptive is nonetheless unfair.” The test as stated by the court is as follows: “ ‘(1) whether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise-whether, in other words, it is within at least the penumbra of some common-law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers (or competitors or other businessmen).’

It is not necessary that all three components of this standard be satisfied; a practice may be unfair because of the degree to which it meets one of these criteria, or because to a lesser extent it meets all three. Expert testimony may be used to prove that business conduct is unfair. The court must determine on a case-by-case basis whether the alleged conduct is unethical, oppressive, or unscrupulous, or whether it was an appropriate exercise of good business judgment. This is a balancing test, whereby the fact finder weighs the utility of the offending party’s conduct against the gravity of harm to the injured party or the public at large.

(5) Violation of California Consumer Legal remedies Act (Cal Civ. Code Section 1770 et seq.)

California’s Consumers Legal Remedies Act (CLRA) establishes a nonexclusive statutory remedy for unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the SALE OR LEASE OF GOODS OR SERVICES to any consumer. See Gonzalez v. Proctor and Gamble Co., S.D.Cal.2007, 247 F.R.D. 616.

Purpose of California Consumers Legal Remedies Act (CLRA) is to attempt to alleviate social and economic problems stemming from deceptive business practices. See America Online, Inc. v. Superior Court (App. 1 Dist. 2001) 108 Cal.Rptr.2d 699.

I. Loan transactions are “goods or services” under the Act.

California Civil Code section 1754 provides that the CLRA “shall not apply to any transaction which provides for the construction, sale, or construction and sale of an entire residence or … for the sale of a lot or parcel of real property, including any site preparation incidental to such sale.” However, this provision bars application of the CLRA only to transactions for the sale or construction of real property; it does not also exclude financial services related to such transactions.

Cases in support of this proposition include:

1. Jefferson v. Chase Home Finance LLC, No. C06-6510, 2007 WL 1302984 (N.D.Cal. May 3, 2007) (concluding that the loan transactions between a mortgage finance company and the plaintiff involved “more than the provision of a loan; they also include the financial services of managing the loan.”)
2. Knox v. Ameriquest Mortgage Co., No. C05-00240, 2005 WL 1910927 (N.D.Cal. Aug. 10, 2005) (finding that, in the context of predatory lending allegations and after a review of the case law, “California courts generally find financial transactions to be subject to the CLRA.”);
3. In re Ameriquest Mortgage Co., No 05-CV-7097, 2007 WL 1202544, (N.D.Ill. Apr. 23, 2007) (stating, in dicta, that “it is not inconceivable that Plaintiffs could prove the existence of tangential ‘services’ associated with their residential mortgages and establish that these transactions were covered by the CLRA.”).
4. In an unreported decision (Jefferson v. Chase Home Finance, LLC – 2007 WL 1302984, N.D.Cal., 2007.) the Court stated:

“the arranging of the loan, including but not limited to its origination, processing, documentation, wire-transmittal and underwriting constitutes ‘services’ within the meaning of subsection(b) of § 1761 of the CLRA……Plaintiffs did not seek just a loan; they sought defendants’ services in developing an acceptable refinancing plan by which they could remain in possession of their home. Thus, unlike the Berry case cited above……the present case involves more than the mere extension of a credit line. Instead, the circumstances here deal not just with the mortgage loan itself, but also with the services involved in developing, securing and maintaining plaintiffs’ loan…..in fact, in an effort to create an appropriate refinancing package, plaintiffs met with defendants’ agent three times before finally agreeing on a payment plan that plaintiffs and defendants found acceptable.”

II. Prohibited Acts

Section 1770 prohibits, (among other things), the following:

Knowingly misrepresenting the character, uses and benefits of its products and services; Knowingly misrepresenting the standard and quality of products and services; Advertising goods or services with intent not to sell them as advertised; Misrepresenting that the consumer will receive…..an economic benefit if the earning of the benefit is contingent on an event to occur subsequent to the consummation of the transaction and, inserting an unconscionable provision in the contract (the Court will look to California Civil Code section 1670.5 in making the unconscionability determination).

CASES ILLUMINATING THE UNCONSCIONABILITY PRINCIPLE INCLUDE THE FOLLOWING:

Civil Code section 1670.5 follows the law developed primarily in the sale of goods, governed by the Uniform Commercial Code, in enabling courts to grant relief from unconscionable contracts or clauses. “The principle is one of the prevention of oppression and unfair surprise.” Whether a contract is unconscionable or not is a question of law for the Court. Shadoan v. World Savings & Loan Assn., 219 Cal.App.3d 97, 268 Cal.Rptr. 207 (1990).

As stated by the court in the seminal case of Williams v. Walker-Thomas Furniture Company (D.C.Cir.1965) 350 F.2d 445, 449, “Unconscionability has generally been recognized to include an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.”

Absence of meaningful choice occurs when a party to a bargain has little choice but to accept the terms stated by the other party. Hidden Terms in an agreement may qualify to show absence of meaningful terms.” See A & M Produce Co. v. FMC Corp. 135 Cal.App.3d 473, 486 (1982).

A contract may be procedurally unconscionable under California law when the party with substantially greater bargaining power presents a take-it-or-leave it contract to a customer, even if the customer has a meaningful choice as to service providers. Shroyer v. New Cingular Wireless Services, Inc., C.A.9 (Cal.)2007, 498 F.3d 976.

Discussion: California and Arizona homeowners (greater phoenix area) who are lead to believe that they qualify for a loan modification given the representations made by and concerning the trial plan modification program, may have a claim to assert for damages. It is not certain you can prove that the lenders loan modification services are covered by the act, but it does appear to be a claim worth investigating at any rate.

III. DAMAGES AVAILABLE

(A) Any consumer who suffers any damage as a result of the use or employment by any person of a method, act, or practice declared to be unlawful by Section 1770 may bring an action against that person to recover or obtain any of the following:

1. Actual damages, but in no case shall the total award of damages in a class action be less than one thousand dollars ($1,000 minimum).
2. An order enjoining the methods, acts, or practices.
3. Restitution of property.
4. Punitive damages.
5. Any other relief that the court deems proper.

(B) Any consumer who is a senior citizen or a disabled person, as defined in subdivisions (f) and (g) of Section 1761, as part of an action under subdivision (a), may seek and be awarded, in addition to the remedies specified therein, up to five thousand dollars ($5,000) where the trier of fact does all of the following:

(C) Finds that the consumer has suffered substantial physical, emotional, or economic damage resulting from the defendant’s conduct.

NOTE: GENERALLY, WHEN ASSERTING A CLAIM UNDER THE CALIFORNIA LEGAL REMEDIES ACT, A POTENTIAL PLAINTIFF MUST GIVE THE LENDER A 30 DAY RIGHT TO CURE NOTICE THAT GIVES THEM THE OPPORTUNITY TO REMEDY THEIR VIOLATION PRIOR TO FILING A LAWSUIT.

CONSLUSION:

If you were given a trial plan loan modification offer, agreement, or other documents, and you made payments under the trial plan as agreed in the loan mod document, and any material representations that you made pursuant to the agreement DID NOT CHANGE from the time you entered into the contract, to the time your final payment was made; and if the lender or loan servicer refused to follow through with the trial plan, said you don’t qualify for a loan modification, or sold you house from underneath you, you may need to see a real estate, predatory lending, and foreclosure attorney to review whether or not you have a valid legal case to assert for either specific performance of the contract, or potentially money damages, including potentially punitive damages.

There are causes of action that may be applied in the loan modification trial plan context such as fraud, deceit, fraudulent inducement to contract, breach of implied covenant of good faith and fair dealing, and/or violation of the California Legal Remedies Act. Lenders and loan servicers, who were well financed by the federal bailout, should not be preying in California and Arizona homeowners in the greater Phoenix area by trying to “trick” them into making additional loan payments were foreclosure is inevitable given the lender/loan servicer’s mindset as to whether or not you are truly a loan modification candidate.

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Attorney Steve Vondran can be reached at steve@vondranlaw.com or toll free at (877) 276-5084. Information about trial plan fraud can be found at www.TrialPlanFraud.com

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ABOUT US:

The Law Offices of Steve Vondran in licensed to practice law in California and Arizona. Steve Vondran, Esq. is a licensed attorney and real estate broker in California and Arizona.

He can be reached by email at steve@vondranlaw.com or toll free (877) 276-5084

Offices:

Arizona Office (Esplanade): 2415 E. Camelback Road, Suite 700, Phoenix, AZ, 85020.California Office (Fashion Island): 620 Newport Center Drive, Suite 1100, Newport Beach, CA 92660

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Our Real Estate Law Services:

1. Loan Modifications / Loan Workouts (World Savings and Wachovia Loans
2. Commercial Lease Modifications
3. DRE audits, hearings and investigations
4. Real Estate Broker admissions cases
5. Foreclosure Defense
6. Mortgage Law & Predatory Law
7. Phoenix Real Estate Zoning Attorney – Greater Phoenix (Scottsdale, Goodyear, Buckeye, Casa Grande etc.)
8. Phoenix Eminent Domain Attorney / Inverse Condemnation / Prop 207 (Greater Phoenix)
9. Real Estate Arbitration, Litigation and Mediation
10. Foreclosure Consultant Contracts / Loan Modification Contracts
11. Real Estate LLC’s & Incorporations
12. Real Estate Partnership Law
13. Quiet Title Actions
14. Forensic Loan Audits – Greater Phoenix (Truth in Lending (TILA), RESPA, HOEPA, Fraud, etc).

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KEYWORDS: ARIZONA FORECLOSURE DEFENSE ATTORNEY / CALIFORNIA FORECLOSURE DEFENSE ATTORNEY / PHOENIX FORECLOSURE DEFENSE ATTORNEY / PHOENIX FORECLOSURE DEFENSE LAWYER / SCOTTSDALE FORECLOSURE DEFENSE ATTORNEY / SCOTTSDALE FORECLOSURE DEFENSE LAWYER / ORANGE COUNTY PREDATORY LENDING LAWYER / ORANGE COUNTY FORECLOSURE DEFENSE ATTORNEY / ORANGE COUNTY FORECLOSURE DEFENSE LAYWER / TRUTH IN LENDING LAWYER / TRUTH IN LENDING ATTORNEY / SOUTHER CALIFORNIA MORTGAGE LAW ATTORNEY / MORTGAGE LAWYER / RIVERSIDE FORECLOSURE ATTORNEY / RIVERSIDE FORECLOSURE LAWYER / RESPA LAWYER / RESPA ATTORNEY / FORECLOSURE DEFENSE LAW / PHOENIX LOAN MODIFICATION ATTORNEY / PHOENIX FORECLOSURE DEFENSE LAWYER / ORANGE COUNTY REAL ESTATE LAWYER / ORANGE COUNTY PREDATORY LENDING AND MORTGAGE LITIGATION ATTORNEY / NEWPORT BEACH FORECLOSURE DEFENSE LAWYER / NEWPORT BEACH FORECLOSURE DEFENSE ATTORNEY / CALIFORNIA FORECLOSURE DEFENSE LAWYER / PREDATORY LENDING LAWYER / LOAN RESCISSION ATTORNEY / TILA RESCISSION LAWYER / WACHOVIA OPTION ARM LOAN / WORLD SAVINGS OPTION ARM LOAN / RESCIND MY LOAN

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HELPFUL FORECLOSURE DEFENSE LINKS:

1. SUBMIT YOUR FORECLOSURE / LOAN SCENARIO: WWW.LOANMODSOLUTIONS.NET
2. SUBMIT YOUR LOAN MODIFICATION SCAM SCENARIO: WWW.LOANMODIFICATIONRIPOFF.NET
3. LITIGATING OPTION ARM LOANS WWW.OPTIONARMLAWYER.COM
4. CALIFORNIA FORECLOSURE DEFENSE ATTORNEY STEVE VONDRAN WEBSITE: WWW.VONDRANLEGAL.COM
5. ARIZONA FORECLOSURE DEFENSE ATTORNEY STEVE VONDRAN WEBSITE: WWW.VONDRANLEGAL.COM
6. STEVE VONDRAN REAL ESTATE WEBSITE WWW.VONDRANLAW.COM
7. INFORMATION ON TRIAL PLAN FRAUD: WWW.TRIALPLANFRAUD.COM
8. FORECLOSURE DEFENSE RADIO SHOW: WWW.LOANMODRADIO.COM
9. INFORMATION ON TRUTH IN LENDING LOAN RESCISSION: WWW.RESCINDMYLOAN.NET
10. INFORMATION ON PRODUCE THE NOTE: WWW.PRODUCETHENOTEATTRORNEY.COM

SOME OF THE ABOVE WEBSITES CAN BE VIEWED AT WWW.CUSTOMLAWNBLOGS.COM (CREATOR OF MY LEGAL BLOGS). THEY ARE OPERATED BY WWW.CONTINGENCYCASE.COM WEBSITE WHICH IS A WEBSITE DIRECTORY FOR CONTINGENCY CASE LAWYERS ACROSS THE UNITED STATES).

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NOTICE:

The foregoing information is general legal information only and shall not be relied upon as legal advice, or a substitution for legal advice. If you have specific legal questions about your foreclosure case, or loan modification case you should seek out the advice of a real estate attorney. In addition, the information posted above may not be 100% complete, accurate or up-to-date. The Law Offices of Steve Vondran is licensed to practice law in the state of Arizona and California and only seeks to solicit and serve Clients in these two states. Steve Vondran, Esq. is a licensed attorney and real estate broker in California and Arizona. He can be reached by email at steve@vondranlaw.com or toll free (877) 276-5084. This is an advertisement and communication pursuant to State Bar Rules. Please do not send us private or confidential information through any of our above-listed websites. Sending us an email does not create an attorney-client relationship (only signing a legal retainer will do this).