Legal Question in Real Estate Law in California

Re: Stopping Foreclosure

The automatic stay of bankruptcy will stop a foreclosure sale and probably will buy a couple months' time before the creditor obtains relief from the stay, re-notices the sale, then carries it out. The bankruptcy case may not be the best forum for adjudicating the TILA charges and providing permanent relief (but I'm not a bankruptcy expert).

In a California court, the main tool for derailing an improper trustee's sale is the sequence of temporary restraining order (TRO), followed by preliminary injunction, then decision on the merits and judgment, which might include a permanent injunction, money damages, cancellation of instruments, and on and on.

The court can't grant a TRO just upon the application of the threatened party, contrary to popular belief based on the ready availability of domestic violence restraining orders. It is necessary to prepare, file and serve a lawsuit before the court has the jurisdiction necessary to grant a TRO, and while it can be granted on very short notice, it is only good for a couple weeks, after which there must be a hearing where the plaintiff must show that a preliminary injunction, good through trial and judgment, is warranted.

Filing a suit to stop a foreclosure may also be grounds for recording a lis pendens, which likely will have a further chilling effect on the lender's eagerness to do a foreclosure sale.

Re: Stopping Foreclosure

If you are in bankruptcy, the issues have to be litigated in bankruptcy court. Your attorney should look into it. If you are not in bankruptcy, there are civil remedies. If you are not in bankruptcy, feel free to call us. We have about 650 similar cases in the office now.

Re: Stopping Foreclosure

If you are in bankruptcy, then Attorney Roth is correct - it all has to be litigated in Bankruptcy Court, and you need to discuss this with your bankruptcy attorney. If not, you may have grounds to seek an injunction against the foreclosure pending litigation of the underlying issue of the TILA violation, but it needs to be reviewed in detail by an attorney before anyone can tell you that they can stop the foreclosure.

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Re: Stopping Foreclosure

In order to stop a foreclosure, you will need to obtain a stay from a court. You may obtain a stay by filing a civil complaint and seeking a temporary emergency stay or by filing bankruptcy. However, the bankruptcy stay is only good until a motion for relief is filed. If this is what has happened, then you will need to file an adversary complaint in bankruptcy court and ask for an emergency stay based upon the adversary complaint.

It can be done. I have done it before, but it is quite expensive. So, unless your property has quite a bit of equity, it may not be worth it to pursue this avenue. Should you want to pursue this, be prepared to pay a very hefty retainer.

Also, I do not know how much time you have, but I would require at the minimum one week, unless you have not filed bankruptcy yet, in which case an emergency petition may be filed the day before the foreclosure sale.