UTA Successfully Opposes Borrower's Request To Depublish Pro-Industry Decision

UTA wins one

The California State Supreme Court has denied a request for depublication made by various borrower advocate groups in a pro-industry court of appeal decision, Nungaray, et al. v. Litton Loan Servicing, LP, et al.  Martin T. McGuinn, Esq., Kirby & McGuinn, UTA’s Legal Resources Committee Chair, wrote UTA’s opposition to the court regarding that request. 

Ronald D. Roup, Esq. of Roup & Associates, UTA Board Director, handled the appeal and filed the initial victorious opposition to depublish on behalf of Litton and Bank of America.

The court of appeal decision which was favorable to trustees on the issue of modifications, remains as a published precedent that can be used in the future.

The Nungaray case involved a HAMP trial modification plan, the completion of which was one of a number of conditions to borrower receiving a permanent loan modification agreement.  In the letter to the California State Supreme Court, UTA wrote:  “UTA opposes the request of the National Housing Law Project and the Housing and Economic Rights Advocates … to depublish of the court of appeal’s decision in Nungaray v. Litton Loan Servicing.  UTA believes the published opinion provides clear guidance to its members concerning forbearance postponement and modifications agreements including the Trial Period Plans (“TPP”) under the Home Affordable Modification Program (“HAMP”).  In the Nungaray decision, the court of appeal held that normal contract rules apply to TPPs.  The clarity provided by the Nungaray decision will help foster an environment where all involved in the loan modification process, including borrowers, consumers, lenders, loan servicers, and trustees, can understand the basic framework underlying TPPs in California.”

Phil Adleson, Esq., Adleson, Hess & Kelly, UTA’s Corporate Counsel stated:  “Because of the clarity it adds, the Nungaray decision was good for trustees, loan servicers, lenders, and for borrowers.  Lenders and servicers will be more likely to enter trial payment plans after the Nungaray decision as they will feel more comfortable knowing that trial courts should apply basic contract law to forbearance and modification agreements and that the lender’s acceptance of a partial payment from the borrower during a trial payment plan period should not create an equitable estoppel or a violation of California’s one-form of action anti-deficiency rule. The Nungaray decision, now left published, will discourage borrowers who have failed to fulfill the conditions of their trial modification plan from filing frivolous lawsuits to get a second bite at their modification apple.”

In addition to UTA’s letter in opposition to the request to depublish the decision on behalf of Litton and Bank of America, the California Mortgage Association and CitiMortgage also expressed opposition to the request as did KL Gates on behalf of Wells Fargo.

Read the State Supreme Court’s denial of request for certification

Read UTA’s Letter to the California Supreme Court opposing a request for depublication