The lender canceled a sale, then held a second. Is it void?
The lender canceled a trustee's sale to give the borrower six more months. He defaulted again, then sued to void the new sale.
This week’s case: a lender canceled a completed trustee’s sale, gave the borrower six more months, then foreclosed again when he defaulted. He is suing to void the second sale.
Khan v. Kiwi Fund, LLC, et al.
Court: Alameda County Superior Court
Filed: June 23, 2026, five days after the challenged sale. The borrower is representing himself.
Causes of Action: declaratory relief, quiet title and set-aside of the trustee’s sale, cancellation of instruments, accounting, violation of Civil Code § 2924.17, wrongful foreclosure, breach of the forbearance agreement, breach of implied covenant of good faith and fair dealing, intentional misrepresentation/fraudulent concealment, failure to provide servicing-transfer notice/accounting offset and injunctive relief.
The loan originated in 2017 as a bank loan secured by a single-family residence in Hayward, with an original principal of $734,650. A private lending fund later acquired it and pursued the foreclosure.
In November 2025, the trustee held a trustee’s sale. No third party bid, and the property reverted to the beneficiary on a credit bid. Per the complaint, the records the borrower points to do not show a Trustee’s Deed Upon Sale or a Notice of Rescission for that sale.
In December 2025, the parties signed a forbearance agreement. The borrower alleges the agreement recited a total balance of $781,655.12, set a schedule of four payments, and required full payoff by June 15, 2026. In effect, the lender set aside a completed sale and gave the borrower six more months.
The lender sent a notice on June 9, 2026, stating the borrower had missed the May 15 payment and terminating the forbearance. The borrower does not appear to dispute that he missed it. The trustee then held a second sale on June 18, three days after the June 15 payoff date. Again no third party bid, and again the property reverted to the beneficiary.
The borrower now contends the whole chain was defective. He alleges the November sale was never lawfully unwound, that the documentation behind the transfer of his loan and the authority to foreclose was never properly established, and that the recorded balances do not reconcile. He demands that the defendants produce the assignment history and establish the chain of title and authority to foreclose. He seeks to set aside the June sale, cancel the trustee’s deed, quiet title in his name, and obtain a full accounting.
The borrower got a canceled sale, six more months to pay, and signed a release along the way. Then he sued to undo the foreclosure. Whether any of his theory survives is what the case turns on.
🔒 Paid below: the takeaway and three lessons for lenders.
