Gene Wu, a partner at AFRCT, LLP, will be serving as a panelist at the upcoming California Mortgage Bankers Association’s (CMBA’s) Annual Western States Legal Issues Conference scheduled for December 2, 2013.
The event will be held at the Westin South Coast Plaza and brings together top experts and regulators in the California lending community to discuss recent developments and current trends that are important to lenders in California. The topic of Gene’s presentation is “Opening the Door to Tort Damages in Wrongful Foreclosure Actions.” The traditional measure of damages for a claim labeled “wrongful foreclosure” is the lost equity in the property.
This measure of damages has been largely inapplicable in this current wave of lender liability lawsuits as most foreclosed borrowers had little or no equity in their homes. However, in the last two years, several California Court of Appeal decisions have allowed common law torts such as fraud and intentional infliction of emotional distress to proceed based on facts substantially similar to the old “wrongful foreclosure” cases, albeit diligently avoiding that label. This area of the law has the potential to become the next wave of judicially created contract-based torts, not unlike the insurance bad faith doctrine developed decades earlier.