Why Robo-Signatures Are Illegal in California and Other Non-Judicial Foreclosure States

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With all of the press robo-signing has gotten, it is a bit surprising that everyone is having such a hard time concluding whether these practices effect California foreclosures. My assistant even said to me today, “but the banks say that it doesn’t matter because California is non judicial.” Because the topic has not gotten the treatment it deserves, I will gladly do the job.

The following are by no means a complete list, but are the most clear LEGAL reasons (setting aside pure moral questions and the U.S. Constitution) that the Robo-Signer Controversy will lead to massive litigation in California.

In short, Robo Signers are illegal in California because good title cannot be based on fraud, robo signed non judicial foreclosure sales are void as a matter of law, the documents are not able to be recorded in California if they are not notarized, which we know was often not done properly, and finally, because they robo signed forgeries ARE intended for judicial proceedings, including evictions and bankruptcy relief from stay motions.

1. Good Title Cannot Be Based on Fraud (Even as to a 3d Party).
In the case of a fraudulent transaction California law is settled. The Court in Trout v. Trout, (1934), 220 Cal. 652 at 656 made as much plain:
“Numerous authorities have established the rule that an instrument wholly void, such as an undelivered deed, a forged instrument, or a deed in blank, cannot be made the foundation of a good title, even under the equitable doctrine of bonafide purchase. Consequently, the fact that defendant Archer acted in good faith in dealing with persons who apparently held legal title, is not in itself sufficient basis for relief.” (Emphasis added, internal citations omitted).

This sentiment was clearly echoed in 6 Angels, Inc. v. Stuart-Wright Mortgage, Inc. (2001) 85 Cal.App.4th 1279 at 1286 where the Court stated:
“It is the general rule that courts have power to vacate a foreclosure sale where there has been fraud in the procurement of the foreclosure decree or where the sale has been improperly, unfairly or unlawfully conducted, or is tainted by fraud, or where there has been such a mistake that to allow it to stand would be inequitable to purchaser and parties.”
(Emphasis added).
Hence, if forged Robo Signed signatures are used to obtain the foreclosure, it CERTAINLY makes a difference in California and other non-judicial foreclosure states.

2. Any apparent sale based on Robosigned documents is void – without any legal effect – like Monopoly Money. In Bank of America v. LaJolla Group II, the California Court of Appeals held that if a trustee is not contractually empowered under the Deed of Trust to hold a sale, it is totally void. It has no legal effect whatsoever. Title does not transfer. No right to evict arises. The property is not sold. In turn, California Civil COde 2934a requires that the beneficiary execute and notarize and record a substitution for a valid substitution of trustee to take effect. Thus, if the Assignment of Deed of Trust is robo-signed, the sale is void. If the substitution of trustee is robo-signed, the sale is void. If the Notice of Default is Robo-Signed, the sale is void.

3. These documents are not recordable without good notarization.
In California, the reason these documents are notarized in the first place is because otherwise they will not be accepted by the County recorder. Moreover, a notary who helps commit real estate fraud is liable for $25,000 per offense. Powered Microsoft of the State of California be administered, willfully and contrary to the oath, states as true or she knows to be false, and every person who testifies, declares, deposes, or certifies under the cases in which the testimony, declarations, depositions, or certification is permitted by law under penalty of perjury and willfully states as true any material matter which he or she knows perjury. This subdivision is applicable whether the statement, or the testimony, declaration, made or subscribed within or without the State of California. Penal Code section 132 provides: Every person who upon any trial, proceeding, inquiry, or authorized or permitted by law, offers in evidence, as genuine or true, any book, paper, document, instrument in writing, knowing the same to have been forged or fraudulently altered or ante-The Doctrine of Unclean Hands provides: plaintiff’s “unclean hands” bar injunctive relief when arose from the transaction pleaded in the complaint. California Satellite Sys. v Nichols (1985) The unclean hands doctrine demands that a plaintiff act fairly in the matter for which he or plaintiff must come into court with clean hands, and keep them clean, or he or she will be denied relief, regardless Kendall-Jackson Winery Ltd. v Superior Court (1999) 76 CA4th 970, 978, 90 CR2d 743. Whether question of fact. CrossTalk Prods., Inc. v Jacobson (1998) 65 CA4th 631, 639, 76 CR2d 615.

5. Robo Signed Documents Are Intended for Use in California Bankruptcy Court One majorly overlooked facet of California is our extremely active bankrtupcy court proceedings, foreclosure states, the banks must prove “standing” to proceed with a foreclosure. All declarations standing to file a proof of claim, objections to a plan and most importantly perhaps Relief from bankruptcy court if signed by robo-signers.
Conclusion
Verified eviction complaints, perjured motions for summary judgment, and all other eviction non judicial foreclosures in California and other states are illegal and void. The paperwork itself But the only way to clean up the hundreds of thousands of effected titles is through litigation, banks will simply not do the right thing. And that’s why robo signers count in non-judicial foreclosure robosigners in California may seek declaratory relief, damages under the Rosenthal Act; an for Unfair Business practices, as well as claims for slander of title; abuse of process, civil theft, Bay Area Criminal DUI Defense At