This Opposition is in response to a Demurrer to a wrongful foreclosure matter. Specifically, it addresses the standing of the foreclosing trustee and alleged beneficiary to foreclose on the property. Here, MERS allegedly assigned the deed of trust to U.S. Bank as trustee of a mortgage backed securities fund. However, at the time MERS made the assignment, it was not registered to do business in California and was exempt from registration pursuant to Corporations Code 191(c). As a result, MERS's assignment is voidable. Additionally, as is common in California foreclosure cases, Defendants argue that Plaintiffs' unlawful detainer action which evicted them from the property is res judicata to any claims brought in a civil action. The issue raises a common problem in this area as unlawful detainer judges often refuse to adjudicate issues of title. Lenders would like that refusal to be a bar to raising the issues in civil court. Finally, foreclosing lenders greatly rely on the tender rule to immunize them from any wrongful conduct. If applied as they propose, lenders would essentially be immune from following any laws regarding foreclosure as it is the rare case that a borrower who cannot pay their mortgage would be able to tender the entire debt owed (or the amount of the sale at the foreclosure sale) prior to bringing an action. Of course, this is never an issue in judicial foreclosure states where a lender must establish that they have standing and the right to foreclose prior to doing so.
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