Annotti

I. BACKGROUND

Plaintiffs Gina Annotti and George Oliveira purchased a home in Hollister in 1998. They refinanced and executed a Deed of Trust in 2005. The 2005 Deed of Trust provides that the lender will apply plaintiffs’ payments in the following order: (1) prepayment charges; (2) advances; (3) taxes and insurance; (4) interest; (5) deferred interest; (6) principal; and (7) late charges. It also provides that the lender “may exercise the power of sale” in the event of a breach of duty by plaintiffs. Plaintiffs defaulted on their mortgage after the 2008 economic downturn left them unable to make their monthly payments. Their lender, Wells Fargo Bank, first recorded a notice of default in August 2009. Plaintiffs’ loan was then reinstated the day before a scheduled trustee’s sale. Wells Fargo recorded a second notice of default in July 2011 and cancelled that notice four months later. Finally, Wells Fargo recorded a third notice of default in April 2012. The April 2012 notice of default served as the “ ‘operative notice of default’ ” for the eventual nonjudicial foreclosure sale of plaintiffs’ home in May 2019. Between the April 2012 notice of default and the May 2019 trustee’s…