Collins

FACTS AND PROCEDURAL HISTORY1

In 1993, plaintiffs David Collins and Yvette Herrera became owners of real property on Sunset Canyon Road in Burbank. In 2006, they borrowed $635,000 from Paul Financial, secured by a trust deed (TD) on the property. The beneficiary of the TD was Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for the lender. Plaintiffs do not deny signing a promissory note or receiving $635,000. Instead, they allege that the loan was obtained by fraud and is void, because the broker “ignored the plaintiffs’ inability to repay the loan, knowing that their income did not allow them to qualify for such loan, and never disclosed the real details of the transaction.” In July 2011, two months after plaintiffs defaulted, a deed was recorded, signed by “Nicelette Collins,” claiming that all sums owed by plaintiffs and secured by the TD were “no longer valid or have been satisfied,” and fully reconveying the Property to plaintiffs. MERS recorded a rescission in January 2013, stating that “Nicelette Collins” was not trustee of the TD and the reconveyance was fraudulent in that plaintiffs did not pay off or satisfy the obligations secured by the TD. On March…