McDowell

I. FACTS AND PROCEDURAL HISTORY

A. The Loan To purchase a four-unit building in Alameda, Sylvia McDowell (Sylvia) obtained a mortgage loan in February 2006 and signed a $641,250 promissory note, secured by a deed of trust against the property. Sylvia’s son, Maurice Michael McDowell (Mike), lives at the property.

1 Because they have the same last name, we refer to appellants by their first names for clarity, without disrespect.

1 1. The McDowells’s Defaults By October 2006, Sylvia was three months behind on her payments and in default on the loan. After Aurora discussed loss mitigation options with her in November and December 2006, she entered into a forbearance agreement in February 2007, by which she acknowledged her default and promised payment. The foreclosure process was suspended. Sylvia failed to pay as agreed, however, and the loan was referred to foreclosure. In March 2008, Sylvia again acknowledged her default and promised to make payments, and the foreclosure process was suspended a second time. But Sylvia again failed to pay as agreed. Under a loan assumption agreement signed in September 2008, Mike was added to the loan and both Sylvia and Mike became liable under…