Ivie McNeill & Wyatt Prevails in Decade-Long Mortgage Fraud Case

Updated: Sep 3

Partner Keith Wyatt obtained a favorable court ruling at trial in a mortgage fraud case the firm litigated for 11 years. The Court ruled that the sale of the plaintiff’s family home to the defendants in 2006 was the result of an elaborate foreclosure fraud scheme which invalidated the sale. The ruling required that the only remaining defendant in the case, the financial service firm that held the $865,000 first deed of trust against the property, surrender the deed and all equitable rights in the property to the plaintiff. During the entire 11-year litigation, the plaintiff’s family continued to reside in their home and the ruling gave the plaintiff title to the property, currently valued at $1.4 million, free of any encumbrances.

The plaintiff’s parents encountered financial difficulties in 2006 and faced foreclosure on their home. The defendants fraudulently persuaded plaintiff’s parents to sell the property to the defendants, with an agreement that they would retain an option to lease the property and repurchase it. Instead, the defendants borrowed more money on the property and threatened to evict the family from the property. It became clear that the defendants never had any intention to assist the plaintiff’s parents in refinancing their home, but instead intended to extract as much equity from the property as possible. Immediately after purchasing the property, the defendants obtained a second mortgage and withdrew $90,000 out of escrow for alleged necessary repairs that were never performed. The plaintiff’s mother filed a lawsuit against the defendants in 2006, and the plaintiff was substituted in to the case after his mother died in 2009.


After 11 years of twists and turns which included appeals of the case to the California Supreme Court, the only remaining defendant in the case at trial was the financial service firm that held the first deed of trust against the property. Keith successfully argued that the original sale was fatally flawed because the warranty deed transferring the title to the defendants was fraudulently obtained and was at all times void. Therefore, the financial service firm had no equitable rights in the property and was required to surrender the first deed of trust to the plaintiff. The plaintiff’s continuous, uninterrupted possession of the home was notice to all subsequent encumbrancers of the family’s dispute and challenge of the alleged 2006 sale to defendants.

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