Lona vs Citibank: Decision from Court of Appeals of California

Edstrom_MortgageSecuritization_POSTER_17_x_22_v4_1Lona vs Citibank: Decision from Court of Appeals of California

By Daniel Edstrom
DTC Systems, Inc.

Here is this summary judgment reversal from an original ruling against a homeowner.   Download the PDF at the end.


JONAS Z. LONA, Plaintiff and Appellant,


CITIBANK, N.A., as Trustee, etc. et al., Defendants and Respondents. 

No. H036140.

Court of Appeals of California, Sixth District.

Filed December 21, 2011.

Law Office of Adlore V. Clarambeau, Adlore V. Clarambeau, Attorneys for Appellant Jonas Z. Lona.

Alvarado Smith, John M. Sorich, S. Christopher Yoo, Geoffrey C. Brethen, Attorneys for Respondent Citibank, N.A.



Responding to a mortgage broker’s “marketing enticement,” a homeowner agreed in January 2007 to refinance his home for $1.5 million. With a monthly income of only $3,333, the homeowner quickly fell behind in his monthly payments of $12,381.36. In August 2008, the home was sold at a nonjudicial foreclosure sale. The homeowner filed an action against the lender, the loan servicer, and others to set aside the trustee’s sale claiming that he was a victim of predatory lending. He claimed the transaction was invalid because the loan broker ignored his inability to repay the loan, and, as a person with limited English fluency, little education, and modest income, he did not understand many of the details of the transaction which was conducted entirely in English.

In response to the homeowner’s claim, the lender and the loan servicer moved for summary judgment, arguing: that the homeowner had failed to tender the amounts due on the loans, which was required to set aside the sale; that none of the exceptions to the tender requirement applied; and that the homeowner voluntarily entered into the loan agreements and was personally responsible for the loss of his home. The trial court granted summary judgment to the lender and loan servicer.

We will reverse the summary judgment. In doing so, we define the elements of an equitable cause of action to set aside a foreclosure sale and exceptions to the requirement that the borrower tender any amounts due under the loan. We hold that summary judgment was improper because: the homeowner presented sufficient evidence of triable issues of material fact with regard to the alleged unconscionability of the transaction; and the motion did not address a pertinent exception to the tender requirement, which the homeowner had raised in his complaint. Continue reading “Lona vs Citibank: Decision from Court of Appeals of California”