Thank you, Todd, first for your indulgence in Answering my questions and your kind patience. The reason I am asking all these questions is because I do not give general Answers that can be applied to every situation. I prepare specific Answers for to my customers' questions,
I understand your situation now and will try to address your concerns, but if I miss a point, please let me know and I will be glad to address that concern or clarify something you may not fully understand.
You do have a cause of action against Wells Fargo for misrepresentation, misleading information, detrimental reliance, unlawful business practices, and possibly fraud which I will discuss below.
First, please allow me to cover certain points so that you will know "where I'm coming from". In order for a Court to have power to order a person, or entity to do, or not to do something, they must be a party to an action - breach of contract, personal injury, divorce proceedings, etc., and the Court must have personal jurisdiction over them. A sues B; The Court has jurisdiction only over A and B. A asks the Court for several things and among them is to order C to do something. In entering judgment in favor of A, the Judge cannot also say, "By the way, I am also imposing an Order on C to give A his car back.
Result: The Judge can only Order A or B to do something because they are the only parties in the action, and the only parties over which the Court has jurisdiction and authority to compel them to do or not to do something.
Divorce proceedings involve Husband (H) and Wife (W), nobody else is a party to the divorce action. The Court cannot order C to do anything. In your divorce proceedings and the division of the community property, the Judge could "mix and match" property in order to arrive at a just resolution and division. The Judge had no power to enter an Order compelling "C" to do something. For this reason, no matter how the Judge divided the community property, if property was encumbered by a mortgage (Or, "Deed of Trust" as they are sometimes referred to in California), the Judge had no authority or jurisdiction over any bank or lender to compel them to do anything. The bank made a loan to your wife and she executed a mortgage (Or, Trust Deed) as security for the repayment of the loan. She was and still is the obligor on the Note she signed and the lender, or its successor in interest (Wells Fargo) can still sue her, as the Obligor on the Note if it is not paid. If any installment under the Note was not paid, the lender cannot sue you because you said that you did not sign the Note. That is why you are not recognized as the "borrower".
Almost all Notes and Mortgages (and, Deeds of Trust) have a "Due on Sale" clause which means that if title to the property is sold, transferred, or otherwised disposed of, to someone else, the entire outstanding unpaid balance under the Note becomes due and payable and the lender can immediately demand payment of the entire unpaid balance. Your former wife transferred title to the house to you and then you transferred title to the trust. The fact that the Judge might have Ordered your former wife to transfer title to the property to you in the course of dividing the community property is irrelevant and of no concern to the lender and the lender could not be Ordered by the Judge to remove your former wife's name from the Note and substitute yours because the Court had no jurisdiction over the original lender, Wells Fargo, or any other bank that was involved. This does not change simply because you gave notice to the bank. The bank had to do some act to signify acceptance of you as the Obligor (borrower) under the Note and sign a Release in favor of your former wife in order to release her of the liability of any further payments under the Note.
Equally irrelevant to the lender is the fact that your former wife never lived in the house, or paid anything under Note, that you made the down payment and all subsequent payments and paid all expenses for the improvements you made to the house. Also irrelevant to the bank is the fact that you and the trust are basically the same individual. The bank will still look at that transaction as a "transfer of title" to the property.
I believe that all of the above grounds which I mentioned form the basis of your lawsuit, but your strongest argument would be detrimental reliance, justified reliance, estoppel, unlawful business practices, and possibly fraud because a lender cannot tell you to act a certain way, i.e., stop making monthly payments so that they can modify the loan, and then use non-payment to hold you in default and foreclose on the mortgage (Or, Deed of Trust). The law would say to Wells Fargo that they are estopped from holding the Obligor (whoever that might be - your former wife, or you) in default and then foreclose. Equally significant is the their representation to you that selling the other property would make it easier to modify the loan (This is detrimental reliance). You relied on their representations that they would modify the loan if you sold the other property.
You could also make a strong argument that because they continued to accept your payments over a period of time and negotiated with you about the modification, they are estopped from denying that they looked and treated you as the borrower.
Your cause of action is based solidly on misrepresentation, misleading information, justified reliance and detrimental reliance. Wells Fargo misrepresented and misled you in saying that they would refinance the loan if you stopped making the regular monthly payments, and if you sold the other property. You had no reason to believe, and they gave you no reason to believe, that they would not refinance the loan, if you did as they asked. Therefore, you were justified in relying on the information they were giving you. As a result of relying on their information, you stopped making the regular monthly payments and you also sold the other property, all to your financial detriment. If Wells Fargo never intended to refinance the loan, but misrepresented to you that they would, then you would also have fraud and unlawful business practices on the part of Wells Fargo.
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