Every week: one real lawsuit filed over a California foreclosure, taken apart.
The File
Case: Francisco Mira Becerra v. Next Door Neighbor Homes, LLC and Freedom Mortgage Corporation
Court: Merced County Superior Court
Filed: August 6, 2026. The borrower is represented by counsel.
Property: Single-family, Los Banos. APN 081-174-007-000
Loan: An FHA first. $255,240, recorded July 2015, modified January 2024 to a $224,289.76 balance at 7.125%, matures February 1, 2064.
Claims: Twenty-three. Seven foreclosure statute counts, one recorded-document count, three contract counts, four fraud counts, six title and unfair business practice counts, and two collection and accounting counts.
Relief sought: An order unwinding the sale, cancellation of the notices and the trustee’s deed, quiet title, an accounting, a corrected reinstatement figure, a new loss mitigation review, damages, treble damages, punitive damages, restitution, fees and costs.
Exhibits attached to the complaint: Ten. The deed of trust, the assignment, the loan modification, the Notice of Default with its compliance declaration, the Notice of Trustee’s Sale, one text message, the notice to quit, a text thread, a stipulated judgment, and an email chain.
The Timeline
7/17/2015. A $255,240 FHA deed of trust records against the home.
1/25/2022. The assignment records. The beneficial interest moves to the current servicer.
1/22/2024. A loan modification records. The new balance is $224,289.76 at 7.125%. The payment is $1,981.39 a month. The loan maturity is 2064.
1/1/2025. The borrower stops paying per the Notice of Default. He alleges a medical crisis, two kidney surgeries, and the loss of his job.
6/18/2025. A compliance declaration is signed for the servicer. It states the borrower was contacted to review his finances and look at options to avoid foreclosure, and that thirty days have passed since that contact.
6/25/2025. The Notice of Default records. The amount required to bring the loan current is $12,718.21.
4/3/2026, 1:06 p.m. The servicer texts the borrower that he has been approved for an FHA Permanent Home Retention Program with a Trial Payment Plan. The same day, the foreclosure trustee signs the Notice of Trustee’s Sale.
4/6/2026. The Notice of Trustee’s Sale records. It sets the sale for May 6 and states an unpaid balance and other charges of $258,942.51.
4/10/2026. The Notice of Trustee’s Sale is posted on the front door. That is twenty-six days before the sale.
5/3/2026. The borrower alleges he called and asked for a certified reinstatement figure, and was told it would take seven days to produce. The sale was three days away.
5/5/2026. He alleges he called and asked that the sale be stopped, and that the servicer refused. He alleges he tried to file Chapter 13 that day, filed in the wrong court, was rejected, was told he had one week to refile, and did not refile.
5/6/2026. The sale runs. A third party buys the home for $304,850.01.
5/22/2026. The trustee’s deed is signed and notarized.
5/28/2026. The trustee’s deed records.
6/9/2026. The borrower alleges the buyer’s agent offered him thirty days to move out and a $6,000 payment.
6/10/2026. A three-day notice to quit is posted. It was signed on June 5.
8/6/2026. The complaint is filed. That is three months after the sale.
The Money
$255,240.00. Initial amount borrowed in July 2015.
$224,289.76. The recorded loan modification sets this as the new principal balance.
$12,718.21. The Notice of Default states this is the amount required to bring the loan current as of June 18, 2025.
$258,942.51. The Notice of Trustee’s Sale states this as the unpaid balance and other charges as of April 3, 2026.
$259,752.29. The trustee’s deed states this as the amount of the unpaid debt at the sale.
$304,850.01. The trustee’s deed states this as the amount the buyer paid.
$45,097.72. Surplus after the foreclosure sale. The complaint never mentions it.
Claims 1 to 3. Borrower Contact and Loss Mitigation (§§ 2923.55, 2923.6, 2923.7)
All three counts start with a loan modification application, and the borrower pleads that he was never allowed to file one.
What he alleges
Through 2025 the servicer texted him that it had received his mortgage assistance application and was reviewing it. On April 3, 2026 it texted that he was approved for an FHA retention program with a trial payment plan. He alleges there was no single point of contact, no written acknowledgment, no written denial, and no appeal.
What the record shows
Section 2923.6(c) starts running when a borrower submits a complete application. Section 2923.6(h) says an application is complete when the borrower has supplied the servicer with all the documents the servicer required. The trigger is the borrower submitting an application.
The complaint says he never did it. He pleads that he “was never given the opportunity to submit a formal mortgage assistance application.” He pleads that the servicer claimed to review an application he “never submitted.”
The elements paragraphs of these same counts then say he did submit one, in three separate places.
Claim 4. Notice of the Sale (§§ 2924, 2924b)
The borrower received both notices, and he concedes the posting was on time.
What he alleges
He received the Notice of Default by regular mail but not by certified mail. He alleges he did not receive the Notice of Trustee’s Sale by certified mail either, and found it posted on his door. He pleads the mailing defect on information and belief and says the proof sits with the servicer and the foreclosure trustee.
What the record shows
The Notice of Trustee’s Sale recorded April 6, was posted April 10, and the sale ran May 6.
The trustee’s deed recites that the foreclosure trustee mailed the Notice of Default within ten days of recording it, and mailed the Notice of Trustee’s Sale at least twenty days before the sale date, by certified mail with postage prepaid.
Under § 2924(c), a recital of compliance with the mailing and publication requirements is prima facie evidence of compliance. In favor of a bona fide purchaser, it is conclusive evidence.
Neither foreclosure trustee entity is named as a defendant.
Claims 5 to 7. Loss Mitigation Notices and Dual Tracking (§§ 2924.9, 2924.10, 2924.11)
These three counts run on the same application the complaint says was never submitted.
What he alleges
After the Notice of Default recorded, he received no written notice describing the options available to him. The servicer never acknowledged an application in writing, never told him what was missing, and never gave him a deadline or a contact. It kept advancing the foreclosure while telling him a review was underway.
What the record shows
Section 2924.9 requires a servicer that offers foreclosure prevention alternatives to send a written communication within five business days after recording a Notice of Default, telling the borrower he may be evaluated, whether an application is required, and how to get one.
That section applies to large servicers only. A lender servicing seven or fewer California residential loans in a calendar year is exempt.
The rest of this group turns on the same missing modification application as Claims 1 to 3. The complaint describes texts about an application, and pleads in the same filing that no application was ever submitted.
Claim 8. Accuracy of the Recorded Documents (§ 2924.17)
The declaration says the servicer called him. He says the call never happened.
What he alleges
The compliance declaration attached to the Notice of Default is false, because no one ever called him to review his finances or explore options to avoid foreclosure. He also alleges the default and payoff figures were not supported by competent and reliable evidence.
What the record shows
Section 2924.17(a) requires a recorded compliance declaration, a Notice of Default and a Notice of Sale to be accurate and complete and supported by competent and reliable evidence. Section 2924.17(b) requires the servicer to review that evidence before it records, covering both the borrower’s default and the right to foreclose.
The recorded declaration tracks that language. It is dated June 18, 2025, signed by a named employee of the servicer, and it certifies that the declaration is accurate, complete and supported by competent and reliable evidence the servicer reviewed.
The figures are documented. The Notice of Default states $12,718.21 to bring the loan current in June 2025. The Notice of Trustee’s Sale states $258,942.51 in April 2026. The trustee’s deed states $259,752.29 at the sale a month after that. Three recorded documents track each other.
One more point a lender should know. Section 2924.17(c) gives enforcement to government entities and to the state licensing departments, and only for multiple and repeated uncorrected violations. A borrower’s own route to a remedy runs through § 2924.12, not through § 2924.17 itself.
Claims 9 to 11. The Contract Counts (Breach, Good Faith, Promissory Estoppel)
The borrower missed the installment due January 1, 2025 and asked for the payoff figure three days before the sale.
What he alleges
The servicer breached paragraphs 9(d), 10, 13 and 18 of the FHA deed of trust and breached the loan modification. It refused to give him a reinstatement figure, sent a paperless billing notice instead, and would not postpone the sale.
What the record shows
The modification took effect February 1, 2024 at $1,981.39 a month. The Notice of Default states he did not make the installment due January 1, 2025, eleven months later. The Notice of Default recorded June 25, 2025. The Notice of Trustee’s Sale recorded April 6, 2026.
He alleges he first asked for a certified reinstatement figure on May 3, 2026. That is about sixteen months after the missed installment the Notice of Default names, and three days before the sale.
Claims 12 to 15. The Fraud Counts (Fraud, Negligent Misrepresentation, Promissory Fraud, Concealment)
One of the four statements is in writing. The rest are phone calls.
What he alleges
Four promises were false when they were made. The April 3 approval text. The May 3 promise that a reinstatement quote was coming in seven days. The buyer’s agent promising thirty days and $6,000 on June 9. A second agent promising a moving contractor who never came.
What the record shows
The alleged approval text is attached and timestamped. The alleged emails with the buyer’s second agent are attached.
The May 3 call, the May 4 call, the May 5 call, and the June 9 call have nothing behind them. No letter, no email, no confirming text. Each one becomes a swearing contest.
Claims 16 to 21. The Title Counts (Unfair Business Practices, Quiet Title, Slander of Title, Cancellation of Instruments, Wrongful Foreclosure, Declaratory Relief)
A third party bought the property at auction, and that is the hardest fact in the case for the borrower.
What he alleges
The notices and the trustee’s deed should be cancelled, title should return to him, and the sale should be undone. He argues the buyer is not a bona fide purchaser under § 2924.12(e), because the buyer buys foreclosed homes for a living, and because he was in “open, notorious, exclusive, and continuous possession” of the home.
What the record shows
Section 2924.12(a)(1) gives a borrower an injunction only while no trustee’s deed has recorded. Here the deed recorded on May 28, 2026.
Section 2924.12(b) covers the period after the deed records. It makes a servicer liable for actual economic damages resulting from a material violation that was not corrected before the deed recorded, and it allows the greater of treble actual damages or $50,000 where the violation was intentional, reckless, or willful.
Section 2924.12(e) says no violation of the article affects the validity of a sale in favor of a bona fide purchaser and its encumbrancers for value without notice.
The trustee’s deed states on its face that the buyer was not the foreclosing beneficiary. The buyer paid $304,850.01 in cash at a public auction against a $259,752.29 debt, which is $45,097.72 over the debt. The complaint never alleges the price was too low, never alleges the bidding was rigged, and never states what the buyer paid.
Claims 22 and 23. Debt Collection and Accounting (Rosenthal Act, Accounting)
The borrower asks a court to determine a balance that three recorded documents already state.
What he alleges
The servicer called and hung up after one ring for about three months. It sent texts that carried no useful information. It demanded the full accelerated balance instead of the arrears. The figures cannot be squared, so a court should order an accounting.
What the record shows
The Notice of Default states $12,718.21 as of June 18, 2025. The Notice of Trustee’s Sale states $258,942.51. The trustee’s deed states $259,752.29. All three came from recorded documents, and they line up with each other.
The count is pleaded under the Rosenthal Act by name. The complaint gives no code section for it anywhere.
🔒 Paid below: the takeaway and three lessons for lenders.
