Every week: one real lawsuit filed over a California foreclosure, taken apart.
The File
Case: Jin v. MTC Financial
Court: Superior Court of California, County of San Bernardino
Filed: 9/29/2026. In pro per: the borrowers represent themselves.
Property: Single-family property, Ontario.
Loan: First deed of trust. $430,000, recorded May 2020, matures June 2050.
Claims: 5. Wrongful foreclosure, declaratory relief on the sale and title, cancellation of the trustee’s deed, declaratory relief on the surplus, dual tracking.
Relief sought: Undo the sale and cancel the trustee’s deed, $210,000 in damages, the greater of treble damages or $50,000, and a ruling on the junior lender’s share of the proceeds.
Exhibits attached: None.
The Timeline
12/16/2025. The foreclosure trustee records the Notice of Default. It shows $29,523.59 past due, starting with the 5/1/2025 installment.
3/12/2026. The borrowers say they sent the servicer a loan modification application, complete by 4/16/2026.
4/1/2026. The trustee records the Notice of Trustee’s Sale. Sale set for 5/12/2026 at 9:00 a.m.
4/25/2026. After a listing-related request, the trustee emails that the sale is postponed to 7/7/2026, per the complaint.
6/29/2026. The borrowers say they hand-delivered and emailed a signed $800,000 purchase agreement to the trustee.
7/1/2026. A copy sent by Priority Mail Express reaches the trustee, per the complaint.
7/7/2026. The sale goes ahead. A third-party buyer pays $620,000, per the recorded Trustee’s Deed.
7/7/2026. At 10:48 a.m., one of the borrowers files a Chapter 13 bankruptcy, per the complaint.
7/24/2026. The bankruptcy court dismisses the case for failure to file information, per the court’s records.
7/31/2026. The Trustee’s Deed, signed 7/28/2026, is recorded.
9/29/2026. The borrowers file this lawsuit.
The Money
$545,000. What the borrowers paid for the property in May 2020, per county property records.
$430,000. The loan amount, per the recorded deed of trust.
$29,523.59. Past due as of December 10, 2025, per the recorded Notice of Default.
$415,275.76. The unpaid balance plus estimated costs when the sale notice published, per the recorded Notice of Trustee’s Sale.
$800,000. The price in the purchase agreement the borrowers say they delivered.
$820,000 to $830,000. The borrowers’ own estimate of the property’s market value.
$620,000. The winning bid, per the recorded Trustee’s Deed.
$424,177.56. The unpaid debt with costs at the sale, per the same deed.
Claim 1. Wrongful Foreclosure (§ 2924f, § 2923.6)
The borrowers say their $800,000 contract forced a postponement. The one copy they sent by tracked overnight mail arrived July 1, 2026, six days before the sale.
What the statute requires
A listing agreement postpones the sale 45 days. A purchase agreement can postpone it again, but only after the listing postponement has been used.
Either one has to reach the trustee from the borrower by certified mail or tracked overnight courier, at least five business days before the sale.
The purchase agreement has to be fully executed, carry the escrow agent’s acceptance, and be priced at or above the obligations of record. These provisions are repealed January 1, 2031 unless extended.
What the borrowers allege
They say the trustee’s postponement email gave a date but no time of day. By their account, they hand-delivered and emailed the agreement on June 29, mailed it the next day, and had their agent email a completed escrow page on June 30. Their argument is that the trustee received and reviewed the agreement, so the delivery method should not matter.
What the record shows
The recorded Notice of Trustee’s Sale set the original sale for 9:00 a.m. It told the owners to confirm any postponement on the trustee’s website or at the sale itself. None of the emails or the agreement is attached to the complaint.
Claim 2. Declaratory Relief on the Sale and Title (Code Civ. Proc. § 1060)
The borrowers say the sale was not final when one of them filed bankruptcy that morning. That bankruptcy was dismissed on July 24, 2026, four days before the trustee signed the deed.
What the statute requires
A party can ask a court to declare its rights in a present dispute.
Under § 2924m, when the winning bidder is not an owner-occupant, the sale becomes final 15 days after the auction. An eligible bidder can extend that by sending the trustee a bid or a notice of intent to bid.
Title stays with the borrower until the sale is final.
Under § 2924h, the sale counts as of 8 a.m. on auction day if the trustee’s deed records within 21 days.
What the borrowers allege
The auction started around 9:00 a.m., they say, and the bankruptcy was docketed at 10:48 a.m., while title was still theirs. They question whether a deed recorded 24 days later can date back to that morning. They also allege, on information and belief, that the buyer is married to the person who signed the junior loan for the junior lender.
What the record shows
The recorded Trustee’s Deed says the buyer was not the foreclosing beneficiary and “was not an Eligible bidder.” The trustee signed it July 28, 2026, and it was recorded July 31.
Claim 3. Cancellation of the Trustee’s Deed (Civ. Code § 3412)
The borrowers want the recorded Trustee’s Deed canceled. That only happens if the court first finds the sale void or voidable.
What the statute requires
A court can cancel a written instrument that is void or voidable against a person. There has to be a reasonable fear that leaving it in place may cause that person serious injury.
What the borrowers allege
They say the deed lets the buyer evict them and lets the property be sold or borrowed against while the case goes on.
What the record shows
The deed conveys the property to the buyer for $620,000.00 after a public auction on July 7, 2026.
Claim 4. Declaratory Relief on the Junior Loan and the Surplus (§ 2924k)
The borrowers say the junior lender demanded about 3 percent a month in interest. They want its share of the sale money cut, and this claim does not ask to undo the sale.
What the statute requires
The trustee pays out sale proceeds in order: costs of the sale, the foreclosing loan, junior liens by priority, then the borrower.
What the borrowers allege
They call 36 percent a year unlawful unless an exemption applies, and say some payments were not credited. The junior lender has sued them separately on the same agreement.
What the record shows
The deed puts the winning bid at $620,000.00 and the debt with costs at $424,177.56. The junior loan agreement is not attached.
Claim 5. Dual Tracking (§ 2923.6, § 2924.12)
The borrowers say their modification application was complete by April 16, 2026. By their own account, they re-sent documents the next day, and the trustee suggested checking whether more were needed.
What the statute requires
While a complete first-lien modification application is pending, the sale cannot go forward until, among other events, a written denial issues and the appeal period runs.
Once the trustee’s deed records, the remedy is money: actual damages, and for intentional or reckless conduct the court may award the greater of treble damages or $50,000.
What the borrowers allege
They say no written decision arrived before the sale. According to the complaint, the servicer then emailed five times between May 20 and June 5, 2026. The emails asked the borrower to call about “an important update concerning your mortgage loan.”
What the record shows
The application, the servicer’s requests and its emails are not attached. The trustee’s deed was recorded July 31, 2026.
🔒 Paid below: the takeaway and three lessons for lenders.
