$150,000 paid. No ledger to show for it.
It surfaced on an escrow statement for a different property. Now the borrower is suing to set aside the sale and force an accounting of exactly how it was applied.
This week's case: a $760,000 hard-money bridge loan, a $150,000 payment that surfaced on an escrow statement for a different property, and a wrongful-foreclosure suit that hinges entirely on the accounting.
SB Auto Service, Inc. v. Elite Creative LLC, et al.
Court: LASC, Northwest District (Van Nuys)
Filed: May 27, 2026
Causes of Action: Twelve. Wrongful foreclosure, set aside the trustee’s sale, cancellation of instruments, quiet title, declaratory relief, fraud, negligent misrepresentation, breach of fiduciary duty/constructive fraud, accounting, money had and received/unjust enrichment, unfair business practices, and injunctive relief.
The borrower sued the two lenders, the loan broker, the foreclosure trustee, the loan servicer, and several individuals alleged to be agents of the broker.
In July 2024, the borrower took out a $760,000 hard-money loan to pay off a prior matured loan that was already in foreclosure. The borrower alleges the broker represented the loan would be a temporary bridge to a replacement refinance with better terms and cash-out proceeds. The settlement statement shows the proceeds paid off the prior loan plus closing costs, leaving the borrower a net refund of $801.82.
On January 15, 2025, the foreclosure trustee recorded a Notice of Default. It states the first missed payment was October 1, 2024, with $37,957.40 past due.
In August 2025, the borrower paid $150,000 in connection with the sale of a separate property. The borrower alleges this payment was demanded to finalize the refinance and protect the property, and that it was never properly accounted for.
The foreclosure sale went forward on November 19, 2025 at a credit bid of $800,000.
The borrower seeks to set aside the sale and obtain a full accounting of how the $150,000 was applied.
🔒 Paid below: the takeaway and three lessons for lenders.
