My intention in writing this post is not to stoke up another debate over the current real estate debacle in California.  I do not intend to spark once again the philosophical wrangling between homeowners and their lenders.  I am a lawyer, not a radio talk-show host (yes, there is a difference).  I take this opportunity to present the options available to a homeowner who has fallen victim to a “wrongful foreclosure.”

A wrongful foreclosure action is a lawsuit filed by the borrower/homeowner against the loan servicer, the holder of the note, and/or the foreclosing trustee.  The driving allegation is that there was an illegal, fraudulent or willfully oppressive sale of property under a power of sale contained in a mortgage or deed of trust.  In simple terms, the borrower is claiming the lender did not follow the rules during the foreclosure process and therefore the foreclosure sale should be barred (or “set aside” if the sale has already taken place).

The specific grounds for such an action are typically one of the following: 1) the amount stated as due and owing within the notice of default is incorrect; 2) a forbearance agreement was not adhered to by the loan servicer; 3) loan servicer accepted partial payment during foreclosure process but continued with foreclosure; or 4) notice of default states unsubstantiated non-monetary basis for default (i.e. invalid “waste” argument).  These are merely examples and do not consist of an exhaustive list of grounds for a wrongful foreclosure action.

Typically, the homeowner/borrower seeks to have the foreclosure sale set aside (if the sale has already occurred) or seeks to have the court bar or enjoin the foreclosure sale from occurring.  Alternatively, he/she may seek the difference between the value of the mortgage as compared to the foreclosure sale price.  In addition, a homeowner/borrower may seek attorneys fees, emotional distress damages and/or punitive damages.

For more information regarding this process and/or what remedies are available to a homeowner in the above-described situation, please contact Richardson “Red” Griswold of Griswold Law at (858) 481-1300 or

For further reading on this topic, be sure to check out the full list of articles on foreclosure law.