Lender Violations

Attorneys Holding Lenders Liable for Negligence, Fraud, and Unfair Business Practices

The body of case law regarding foreclosure is perpetually evolving to deal with the foreclosure crisis and the predatory practices of lenders and servicers that are constantly being revealed.  Since the beginning of the foreclosure crisis, the dedicated attorneys at Advocate Legal have been fighting to hold lenders and servicers liable for their negligence, fraud and unfair business practices. In addition to the Homeowners Bill of Rights (HBOR), there are recent cases that help the borrower to fight against these lender violations.

With a track record of beating big banks, Susan M. Murphy and Advocate Legal provide a trusted legal resource for homeowners in California and throughout Los Angeles, San Bernardino and Riverside counties.

Common Lender Violations

At Advocate Legal, we provide diligent, reliable assistance to victims of lender violations, including negligence, fraud, and unfair business practices. A loan modification lawyer can use litigation as leverage to facilitate modifications by enforcing borrower rights and holding a lender accountable for abuses. As skilled and efficient litigators, we assist clients with wrongful foreclosure cases, including quiet title actions, eviction defense and other matters arising from all types of lender violations.

Loan Modification Abuse

Loan servicers have successfully argued for years that they have no duty to borrowers, which meant it was hard to sue them in court for misleading homeowners during loan modification. Since the Homeowner Bill of Rights (HBOR) was enacted, protecting borrowers from dual tracking, the court has begun to impose upon lenders a duty of ordinary care towards borrowers during the loan modification process and hold servicers accountable for breaches of this duty. See Jolley v. Chase Home Finance LLC, 213 Cal.App.4th 872 (2013)

Since the foreclosure crisis began, loan servicers have been giving borrowers trial payment plans, taking their trial payments and then denying them a permanent modification. The borrower’s trial payments went to the servicer’s “retention” department and were never accounted for. Protection for the borrower is contained in recent case law that has held that if a servicer accepts trial payments pursuant to a HAMP (Homes Affordable  Modification Program), they must offer the borrower a permanent modification. See West v. JPMorgan Chase Bank, N.A., 24 Cal.App.4th 780 (2013).

Chain of Title Violations

For years, foreclosure attorneys have argued that lenders lack standing to foreclose on borrowers due to breaks in the chain of the title but borrowers still had the obstacle of The Tender Rule, which required that any action for wrongful foreclosure or quiet title be accompanied by a tender of the full amount of the mortgage debt. This obstacle was almost insurmountable since most borrowers were seeking a loan modification, to begin with, because of financial hardship and had been further damaged by having their credit lowered effectively prohibiting them from being able to raise the money to tender the debt. One of the few exceptions to the Tender Rule has always been a void assignment of the deed of trust and recently the court has strengthened the borrowers’ ability to assert this exception when the plaintiff’s loan was sold to a real estate investment trust (REIT).

If a loan was sold into a REIT without following the rules of that trust and the laws of the state it was formed in (usually New York or Delaware), that constituted a void assignment under that state’s law and this occurred with regularity on most securitized loans. Before now the California courts refused to recognize a borrower’s standing (right) to assert another state’s trust law even though these assignments were legally void, and continued to require these borrowers to tender despite this void assignment. This changed with a California appellate court case that held that a void assignment is void for all purposes and a borrower may assert another state’s trust law. See Glaski v. Bank of America, 218 Cal. App. 4th 1079 (Cal App. 5th Dist. 2013). 

When lenders sell a mortgage loan to a REIT, as they often do, title issues may arise. A lender may no longer have possession of the note or knowledge of where it might be. Without proof that the lender owns the mortgage, a foreclosure would be wrongful. To clear clouded title on a home, homeowners and lenders may sue to quiet title.


Robo-signing is a criminal process whereby banks hire employees to robotically sign documents including sworn affidavits without reviewing them. Banks use this process to speed up the foreclosure process by having bank employees in an assembly-line fashion sign documents including affidavits testifying that they have reviewed loan documents and have personal knowledge of the facts included in the affidavit. In fact, they have not reviewed the documents and have no knowledge even of whether the bank owned the mortgage or the borrower was in default. Robo-signing has led to many mistaken, wrongful and fraudulent foreclosures.


Under the Equal Credit Opportunity Act, lenders cannot make any credit decisions based on race, color, age, gender, national origin, religion, marital status, receipt of public assistance or reporting of discrimination. Race- and age-based discrimination in lending are two of the most common types of lender violations. Racial discrimination may be evidenced by many actions:

  • Different treatment in person than over the phone
  • Discriminatory comments
  • Denial of credit without explanation and even when the borrower qualifies
  • Unfavorable loan terms such as a higher rate
  • A loan that sounds too good to be true
  • Pressure to sign
  • Discouragement from applying for a loan

Penalties for discriminatory lending may include money damages for any harm caused and injunctive relief to stop continuing discrimination.

Contact Lawyers with the Knowledge and Skills to Get Results

With decades of experience and a commitment to justice, our lawyers at Advocate Legal strive to protect homeowners from suffering further harm because of lender violations and to obtain damages for harm homeowners have already sustained. With a track record of beating big banks, Susan M. Murphy and Advocate Legal provide a trusted legal resource for homeowners throughout Los Angeles, San Bernardino and Riverside counties and California.