1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

NICK PACHECO (BAR NO. 173391) [email protected] NICK PACHECO LAW GROUP, APC 15501 San Fernando Mission Blvd., Suite 110 Mission Hills, CA 91345 Telephone: (888) 888-8641 Facsimile: (800) 210-0028 File No.: 12924 Attorney for Plaintiffs, MARIO MARTINEZ and CYNTHIA L. MARTINEZ

SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF ALAMEDA

MARIO MARTINEZ, an individual; CYNTHIA L. MARTINEZ, an individual, Plaintiffs vs. BANK OF AMERICA, N.A., successor in interest to COUNTRYWIDE HOME LOANS, INC., f/d/b/a AMERICAS WHOLESALE LENDER, a division of BANK OF AMERICA, N.A; BAC HOME LOANS SERVICING, LP, f/k/a COUNTRYWIDE HOME LOANS SERVICING, LP, a subsidiary of BANK OF AMERICA, N.A., a Texas Corporation; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., aka MERS., is a Delaware Corporation; RECONTRUST COMPANY N.A.; and DOES 1 through 100 Inclusive. Defendants.

Case No.: RG11586070

APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF; DECLARATIONS OF PLAINTIFFS

Plaintiffs Mario and Cynthia Martinez are facing an unlawful foreclosure of their home on July 26, 2011 based on a defective Notice of Default (NOD) recorded in violation of Civil Code section 2923.5 and consequently the non-judicial foreclosure cannot lawfully proceed. Plaintiffs

1 APPLICATION FOR TRO AND OSC RE: PRELIMINARY INJUNCTION

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

hereby apply to this Court for a temporary restraining order and preliminary injunction to restrain and enjoin the foreclosure of their home by defendants Bank of America, N.A., BAC Home Loans Servicing, LP and Recontrust Company N.A. The foreclosure sale should not go forward because defendants did not follow the foreclosure laws and should be enjoined from moving forward until they follow the law, specifically the Perata Mortgage Relief Act. This Application is based upon the within Memorandum of Points and Authorities, Declarations of Plaintiffs and such other evidence, both oral and documentary, as may be considered at the time of the hearing.

Dated: July 24, 2011

Respectfully submitted, NICK PACHECO LAW GROUP, APC By: _________________________________ Nick Pacheco, Esq. Attorneys for Plaintiffs, Mario and Cynthia Martinez

2 APPLICATION FOR TRO AND OSC RE: PRELIMINARY INJUNCTION

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE RE PRELIMINARY INJUNCTION I. STATEMENT OF FACTS

On or about March 28, 2011, Defendant RECONTRUST COMPANY,N.A. initiated nonjudicial foreclosure proceedings by recording a Notice of Default on behalf of Defendant BANK OF AMERICA, against Plaintiffs property described as 37037 Olive Street, Newark, California 94560 with APN: 092-0052-008 (hereinafter referred to as Subject Property). Plaintiffs state in their declarations, filed concurrently with this application, that Defendants did not comply with the Perata Mortgage Relief Act duties. Plaintiffs assert that they were not contacted by

Defendants, either by phone or in person, to specifically assess their financial situation, explore options to avoid foreclosure, advised that they can meet with the lender within 14 days and provided the toll free HUD number to seek loan counseling to discuss their loan with their lender. Plaintiffs also assert that they were available to discuss these options and did not have extended absences or vacations that would have interfered with their lenders ability to contact them. Plaintiffs seek a Temporary Restraining Order and Injunction against defendants from unlawfully foreclosing on Plaintiffs home on Wednesday, July 27, 2011 at 9:00 a.m. By attempting to take Plaintiffs property without satisfying the pre-foreclosure requirements of the California Civil Code 2923.5 Defendants have unquestionably committed acts in contravention of law and should not be allowed to complete their unlawful scheme. This case involves abusive lending practices by Defendants and their agents, employees, and representatives, who developed a scheme and preyed upon Plaintiffs through a series of abusive lending practices, which have significantly contributed to foreclosure proceedings of the Plaintiffs property. Furthermore, on or about June 29, 2011, Defendants unlawfully recorded a defective Notice of Trustees Sale (NOTS) since the NOD is defective. Here, Plaintiffs allege and can establish prima facie violations of law and have a likelihood of prevailing on the merits. Defendants are not only guilty of wrongful foreclosure and predatory lending but they have also committed fraud by filing an untruthful Notice of Default.

3 APPLICATION FOR TRO AND OSC RE: PRELIMINARY INJUNCTION

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

This case presents a prototypical situation in which postponement of the non-judicial foreclosure is appropriate. This Court should exercise its authority under California Civil Code Section 2924g(c)(1)(A) and issue an order postponing the non-judicial foreclosure sale of Plaintiffs home scheduled on Wednesday, July 27, 2011 at 9:00 a.m. II. THE COURT SHOULD ISSUE A TEMPORARY RESTRAINING ORDER AND A PRELIMINARY INJUNCTION RESTRAINING DEFENDANTS FROM TAKING ANY STEPS TO SELL PLAINTIFFS HOME

California Code of Civil Procedure section 527(a) provides: An injunction may be granted at any time before judgment upon a verified complaint, or upon affidavits if the complaint in the one case, or the affidavits in the other, show satisfactorily that sufficient grounds exist therefor. In determining whether to grant a preliminary injunction the court considers the probability of the plaintiff's success on the merits, and whether a greater injury will result to the defendants in granting the injunction than to the plaintiff in refusing it. Continental Baking Co. v. Katz, 68 Cal.2d 512, 517, 67 Cal.Rptr. 761, 771 (1968). The balance of injuries is the more important factor, as the Supreme Court made clear in Continental, above: In the last analysis, the trial court must determine which party is the more likely to be injured by the exercise of its discretion...[citation] and it must then be exercised in favor of that party [citation]. Continental, above, 67 Cal.Rptr at 77l. Under this standard, a preliminary injunction should be issued in the present case. As will be discussed below, plaintiff is likely to prevail on the merits in this action. Moreover, concerning the hardships, defendants will not be harmed by the issuance of the preliminary injunction. Defendants financial interest will still be secure because defendant Bank of America N.A. holds a Deed of Trust secured by Plaintiffs home. On the other hand, if the injunction does not issue, Plaintiff will suffer irreparable injury. Defendants are attempting to foreclose on Plaintiffs home. Defendant Bank of America, N.A. may attempt sell Plaintiffs home. Plaintiffs may lose their home. This loss will be of great

4 APPLICATION FOR TRO AND OSC RE: PRELIMINARY INJUNCTION

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

detriment to Plaintiffs economic and emotional well-being, including homelessness. No amount of monetary relief could remedy that loss. III. PLAINTIFFS WILL PREVAIL ON THE MERITS IN THIS ACTION BASED ON THE FACT THAT DEFENDANTS VIOLATED THE PERATA MORTGAGE RELIEF ACT [CIVIL CODE SECTION 2923.5] The Perata Mortgage Relief Act, Cal. Civ. Code 2923.5, was designed to balance the playing field between the borrower and the lender. It is intended to empower the borrower so that the borrower understands the options available to them to avoid foreclosure early in the process, before the arrears get out of control. It imposes affirmative duties on the lender before they can record a Notice of Default against the Plaintiffs property. Under 2923.5(a) (2), the lender is to contact the borrower and inform them of their options (i.e., short sale, deed in-lieu, forbearance, repayment plan, loan modification and/or internal lender workout plan), advise the borrower that they can meet with their lender within fourteen (14) days and provide the borrower the toll free HUD number to access loan counseling. In violating this Act the lender takes advantage of the borrower and keeps the balance of power in their favor. Civil Code 2923.5(a)(1) absolutely precludes a mortgagee, trustee, beneficiary, or authorized agent from filing a notice of default pursuant to Civil Code Section 2924 until 30 days after contact is made with the borrowers which satisfies the detailed requirements of Section 2923.5(a)(2) or until 30 days after satisfying the due diligence requirements of Section 2923.5(g). Under Civil Code Section 2924 et seq., in order to affect a foreclosure, a lender must properly serve and record a Notice of Default setting forth the borrower's breach. After 90 days (three months), have elapsed, the lender must thereafter properly serve and record a Notice of Trustee Sale at least 20 days prior to the actual sale date. Assuming proper compliance with the law, the property is then auctioned to the highest bidder at a foreclosure sale. These statutes create an absolute duty on behalf of the Defendants which must be satisfied before a Notice of Default is issued. However, as established by the Declarations of Plaintiffs and the Verified Complaint, Defendants undeniably failed to perform any of the steps required by Section 2923.5 before recording the Notice of Default and issuing a Notice of Trustees Sale. Consequently, these deficiencies establish that the Defendants also failed to comply with Section

5 APPLICATION FOR TRO AND OSC RE: PRELIMINARY INJUNCTION

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

2924, in that they initiated the non-judicial foreclosure process by recording a Notice of Default without complying with the requirements of Section 2923.5. Since Defendants failed to contact Plaintiffs to satisfy the detailed requirements of Cal. Civ. Code 2923.5(a)(2), and did not adhere to the mandates laid out by legislature before commencing a non-judicial foreclosure, they are precluded from proceeding with non-judicial foreclosure pursuant to Cal. Civ. Code 2924 until the requisite contact is made with Plaintiffs. Defendants engaged in misconduct or neglect when it made a fraudulent declaration that it complied with statutory requirements. Pursuant to subdivision (g) of California Civil Code 2924 Defendants must rescind the Notice of Default to allow the lender to comply with the requirements of Cal. Civ. Code 2923.5. As a direct and proximate result of wrongful conduct described herein, Plaintiffs will suffer an irreparable injury not compensable in damages if Defendants are allowed to proceed with an unauthorized Trustee sale of the Subject Property. Furthermore, Defendants failure to comply with the requirement to contact the Plaintiffs constitutes negligence and negligence per se. Thus, Defendants should not be allowed to proceed with any foreclosure. IV. THE BALANCE OF THE HARDSHIPS OVERWHELMINGLY FAVORS PLAINTIFFS WHO WILL SUFFER IRREPARABLE INJURY IF THE COURT DOES NOT ISSUE AN INJUNCTION PROHIBITING DEFENDANTS FROM FORECLOSING ON PLAINTIFFS HOME

In Robbins v. Superior Court of Sacramento County, (1985) 38 Cal.3d 199, 211 Cal. Rptr. 398, the California Supreme Court explained the trial courts proper balancing of hardships in determining whether a preliminary injunction should issue: The trial courts consider two interrelated questions in deciding whether to issue a preliminary injunction: (1) Are the plaintiffs likely to suffer greater injury from a denial of the injunction than the defendants are likely to suffer from its grant; and (2) Is there a reasonable probability that the plaintiffs will prevail on the merits. Id. at 206. As discussed above, Plaintiffs satisfy the second prong of the test, namely, that of reasonably prevailing on the merits. Concerning the first prong, regarding the relative hardships,

6 APPLICATION FOR TRO AND OSC RE: PRELIMINARY INJUNCTION

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Plaintiffs also satisfy that prong. Without injunctive relief, Plaintiff are threatened with the loss of their home and will be homeless as a result of a foreclosure sale. Monetary damages could not compensate plaintiff for this loss, which threatens Plaintiffs emotional and economic well-being. Defendants, on the other hand, will suffer only slight injury should an injunction issue. Defendant Bank of America, N.A. still possesses a security interest on Plaintiffs home. Being unable to foreclose on Plaintiffs home during the pendency of this action is a small loss compared to Plaintiffs loss of their home. Accordingly, a balance of the hardships demonstrates that a preliminary injunction must issue and a temporary restraining order until the order to show cause hearing regarding a preliminary injunction. V. CONCLUSION For the foregoing reasons, the temporary restraining order and preliminary injunction prayed for should be granted.

Dated: July 24, 2011

Respectfully submitted, NICK PACHECO LAW GROUP, APC By: _________________________________ Nick Pacheco, Esq. Attorneys for Plaintiffs, Mario and Cynthia Martinez

7 APPLICATION FOR TRO AND OSC RE: PRELIMINARY INJUNCTION