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73 7. Id. at 837. 8. Id. at 837, citing, e.g., Cardenas v. Caliber Home Loans, Inc. (N.D. Cal. 2017) 261 F. Supp. 3d 862, 870; Galvez v. Wells Fargo Bank, N.A. (N.D. Cal. Oct. 4, 2018, No. 17-cv-06003-JSC) 2018 U.S. Dist. Lexis 172087, at *12 9. Id. at 850. 10. Id. at 850, citing Jolley v. Chase Home Finance, LLC (2013) 213 Cal. App. 4th 872, 904. the borrower before recording a notice of default, the servicer may cure these violations by … postponing the foreclosure sale, communicating with the borrower about potential foreclosure alternatives, and fully considering any application by the borrower for a loan modification. Following these corrective measures, any remaining violation related to recording of the notice of default is immaterial, and a new notice of default is therefore not required to avoid liability." 6 HOBR creates liability only for material violations that are not remedied before the Trustee's Deed Upon Sale is recorded. 7 Courts have held that, "[a] material violation is one that affected the borrower's loan obligations, disrupted the borrower's loan-modification process, or otherwise harmed the borrower." 8 Here, SLS remedied any material violation under HOBR before the sale, rendering any pre-sale technical violations immaterial and not actionable. With respect to Billesbach's claim that SLS violated section 2923.6 by going to sale when his loan modification offer was pending, the court found no violation, stating that the statute does not suggest that "continued interactions between the servicer and borrower following the expiration of a loan modification offer—much less the borrower's extension of a new offer thereafter—can revive the original offer or extend the pendency of the borrower's application." 9 e court refused to create a "nebulous concept of negotiations" as a standard to determine a servicer's ability to proceed with the foreclosure process. 10 Section 2923.6 provides clear rules on when an application is pending and when the servicer may conduct a sale—when the borrower does not accept an offer within 14 days of the offer (§2923.6(c)(2)) or 14 days after a loan modification is offered after appeal but declined by the borrower (§2923.6(e)(2)). Obviously, all loan servicers strive for complete HOBR compliance. However, the important take-away from the Billesbach ruling is that, in the rare event of an actual HOBR violation, the servicer can quickly remedy the violation by reviewing the borrower for a loan modification prior to the foreclosure sale. While some court rulings do not make logical sense, this one does! e borrower receives the full protections of the HOBR, while the lender does not have to restart the entire foreclosure due to a technical and immaterial HOBR violation. Congratulations to the Court of Appeals for getting this one right. Joan C. Spaeder-Younkin is a Senior Associate Attorney at Wright Finlay & Zak's (WFZ) California office. Since 1997, Spaeder- Younkin has focused her legal career on consumer credit, business, and real estate litigation. As a seasoned litigator, she provides clients with efficient case management, guidance through the complexities of litigation, and creative solutions in a wide range of real estate disputes, while addressing the unique needs of each client. She can be reached at jspaeder@ wrightlegal.net. T. Robert Finlay is a Founding Partner of WFZ. T. Robert Finlay is one of the three founding partners of Wright, Finlay & Zak. Since 1994, Finlay has focused his legal career on consumer finance and mortgage-related litigation, compliance, and regulatory matters. Finlay is at the forefront of the mortgage banking industry, handling all aspects of the ever-changing default servicing and mortgage banking litigation arena, including compliance issues for servicers, lenders, investors, title companies, and foreclosure trustees. Finlay successfully guides clients through the complexities of litigation while being extremely mindful of their core values and business models. He is a regular speaker (at industry events and for clients) on a variety of loan servicing and mortgage banking issues, including key legislative and legal updates. He can be reached at rfinlay@wrightlegal.net.