Servicer Quality Home Loans Sets Another Trustee’s Sale Despite Injunction

For this reality foreclosure story, we’ll call these homeowners the Smiths.

A couple of weeks ago I wrote about how a temporary restraining order (“TRO”) and a loan audit was used by an attorney to stop a non-judicial foreclosure sale. The attorney used the loan audit to allege fraud and was successful in obtaining a TRO to stop the sale.

The attorney representing the Smiths later went back to court and obtained a preliminary injunction (meaning a valid court order) to prevent the servicer from foreclosing until the outcome of the lawsuit against the pretender lender was resolved.

As a side note, of interest here is that the judge ordered the homeowners to continue to make house payments of half of their monthly payments. So, it appears that some homeowners may be required to continue making payments in some amounts during the course of the lawsuit. I’m not sure what the situation was for the Smiths before they stopped making payments, but I’m sure this was quite a relief. I’ll keep watching this issue for future blog posts.

The servicer that brought the foreclosure action is Quality Loan Servicing. Interestingly, Thornburg, the originator, is in bankruptcy!

Quality Loan Servicing is represented by McCarthy & Holthus, a law firm in San Diego, California.

The Smiths’ attorney found out that the servicer set the home for sale again for February 22, 2010, despite the court’s order preventing them from selling the home. He wrote to the servicer’s attorney last week to demand that they stop their blatant violation of the court’s order.

The servicer looks like a moron and will face sanctions if they don’t stop their blatant disregard of the valid court order. I wish I could say that I’m surprised, but I’m not. I’ve talked about how the banks and their attorneys are playing dirty in the foreclosure fight.

If I were the attorney representing the servicer, I’d tell my client to stop this misconduct immediately or they will be facing sanctions. They are also not doing themselves any favors with this conduct down the road. It was precisely this conduct that caused a judge in Suffolk County to award quiet title to the Horoskis after the lender so zealously went after their home.

Stay tuned! I’ll post updates as I receive them.