DS News

DS News Jan 2023

DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.

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Page 48 of 83

47 larations that immediate and irreparable injury, loss, or damage will result to the applicant before the adverse party can be heard in opposition, and the applicant submits an affidavit setting forth the efforts, if any, which have been made to provide notice to the opposing party. Unless extended by the court, the TRO will automatically expire after 10 days. During that time, the court will hold a PI hearing. is gives lenders a very short window to hire counsel and oppose the PI. UTAH e plaintiff/borrower must demonstrate all four elements to successfully request a TRO or PI: 1. a substantial likelihood of prevailing on the merits; 2. irreparable harm unless the injunction is issued; 3. that the threatened injury outweighs the harm that the preliminary injunction may cause the opposing party; and 4. that the injunction, if issued, will not adverse- ly affect the public interest. What Happens if the TRO is Granted: e PI hearing must be set at the earliest available opportunity. Lenders are able to file a written opposition and appear at a hearing to oppose the PI request. WASHINGTON Basic Requirements: Generally, a party seek- ing preliminary injunctive relief must establish: 1. a clear legal or equitable right; 2. a well-grounded fear of immediate invasion of that right; and 3. that the acts complained of either have or will result in actual and substantial injury. "In deciding whether a party has a clear legal or equitable right, the court examines the likelihood that the moving party will prevail on the merits." Washington Civile Rule 65 provides that no TRO or preliminary injunction shall be issued without security provided, for the payment of such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined. When enjoining a trustee's sale under the Deed of Trust Act, 5 days' notice to only the trustee is required. Otherwise, generally, a TRO can be issued without notice for up to 14 days to allow proper notice to the adverse parties for a hearing on a preliminary injunction. What Happens if the TRO is Granted: If the TRO was granted without notice, the issuing court must define the injury and state why it is ir- reparable and why the order was granted without notice, and that the TRO shall expire within 14 days unless good cause is shown for longer or the adverse party consents to longer. If extended, the reason for the extension will be put on the record. e motion for the preliminary injunction must be set for hearing ASAP and takes precedence. If the party who obtained the TRO doesn't bring the motion for the preliminary injunction, the TRO is automatically dissolved. If enjoined un- der the Deed of Trust Act (DTA), the borrower is generally required to pay the amount of the monthly payments into the court registry every 30 days. If the injunction is dissolved because the injunction was improperly obtained or ultimately unwarranted, then the funds paid into the registry must be released to the lender upon motion. Applications to restrain a trustee's sale in Washington are often joined with claims for damages under Washington's Consumer Protection Act, which provides damages awards and attorneys' fees to plaintiffs who show that a defendant has committed an unfair or deceptive act. If the applicant prevails in showing that the foreclosure was wrongfully commenced in viola- tion of the DTA, Lenders may also end up on the hook for damages and attorneys' fees incurred in seeking the injunction. SOUTH DAKOTA In South Dakota, if a borrower defaults on their mortgage payments, the lender may fore- close using a judicial or nonjudicial method. e nonjudicial foreclosure process is pretty straight- forward: i.e., the lender serves the borrower a notice of sale at least 21 days before the sale date and publishes the notice in a newspaper once a week for four weeks. S.D.C.L., 21-48-6.1, 21-48- 6. However, if a lender starts a nonjudicial fore- closure, a borrower can easily enjoin it and force the lender to foreclosure judicially by applying for such relief with the court. S.D.C.L., 21-48-9. NEW MEXICO Basic Requirements: To obtain a TRO, the borrower must show that: • He/she will suffer irreparable injury unless the injunction is granted; • e threatened injury outweighs any damage the injunction might cause the lender; • Issuance of the injunction will not be adverse to the public's interest; and • ere is a substantial likelihood [movant] will prevail on the merits. A TRO may be granted without written or oral notice if it clearly appears from specific facts shown by affidavit or by the verified complaint that immediate and irreparable injury, loss or damage will result to the borrower before the lender can be heard in opposition. What Happens if the TRO is Granted: As with any TRO, the foreclosure process must stop. However, in NM, the TRO may not exceed 10 days (unless extended), and the matter will be set for a hearing on motion for PI. e court must impose a bond as a condition for TRO or a preliminary injunction but has discretion as to the amount, so the lender should push for a bond to protect it from damage caused by the issuance of the PI. If have any questions about this topic, please feel free to contact Robert Finlay at RFinlay@ WrightLegal.net. 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. Finlay is the General Counsel for the California Mortgage Association, advising on a variety of legal and compliance issues. Finlay is also an active member and participant in the Western Bankers Association, California Mortgage Bankers Associa- tion, MBA, and United Trustees Association.

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