When can I collect damages for wrongful foreclosure in California?

In California, a debtor who experiences a wrongful foreclosure can collect damages in certain instances. Damages for wrongful foreclosure may be available should the case be taken to court and the debtor win, as long as there are damages that can be proven to the judge as having occurred.

The first step in collecting damages will be winning the wrongful foreclosure case. A wrongful foreclosure may occur for a variety of reasons:

• Breach of contract on the part of the lender
• Errors in actual totals due vs. paid
• Notice of default is incorrect due to interest rate changes, misapplied payments, agreements between debtor and lender, etc.
• Lender accepted payments but continued with the foreclosure actions

In any of the above scenarios, the state of California will likely consider a foreclosure action as having been wrongful and thus invalid, and the debtor is in a position to sue for damages. However, it will be the burden of the plaintiff to prove that the wrongful action occurred and that damages were caused by it. These damages can include various things, such as:

• Emotional distress
• Negligence
• Damage to property inflicted during foreclosure action
• Violation of Unfair Business Practices code
• Wrongful foreclosure (Civil violation)

In any situation involving wrongful foreclosure action, a debtor should contact a lawyer immediately upon belief or realization that the foreclosure is going to take place. Even if it already has, legal help is essential in taking the wrongful foreclosure case to court, but getting a lawyer before the action itself is actually taken may help prevent even greater loss and may keep the situation from escalating unnecessarily.