UTA and CMA are improper parties to litigation

The UTA and the California Mortgage Association (CMA) have been sued in a frivolous lawsuit by a couple who allege that they lost their home in a wrongful ‘zombie’ loan foreclosure more than seven years ago. They tried unsuccessfully to intervene in the federal lawsuit that the UTA and the CMA filed to challenge the subordinate mortgage provisions in AB 130.

Robert Finlay, Esq., and Michelle Mierzwa, Esq., UTA’s Corporate Counsel, provided background:

“Last September, Wright Finlay & Zak, along with the Buchalter firm, sued the California Attorney General to have CC 2924.13 deemed unconstitutional. Shortly after filing suit, WFZ filed a motion to enjoin enforcement of the new law. In turn, the AG’s office filed a motion to dismiss, arguing, among other things, that the AG’s office had sovereign immunity (meaning we couldn’t sue them). The court took both matters under submission. On June 4, 2026, the court denied our motion and granted the motion to dismiss, agreeing that the AG’s office could not be sued and that the validity of the new law was better addressed in a borrower-involved lawsuit.  We filed a motion to vacate the dismissal, which is set for hearing on October 19, 2026.

The plaintiffs in the lawsuit against the industry groups have been fighting the foreclosure on their property for years, having lost in both state and federal court. Their counsel saw our lawsuit and the new law as an opportunity to resurrect their case. To that end, they filed a motion to intervene (join) the lawsuit against the AG. When the court dismissed our lawsuit, denied their motion to intervene as moot.”

The lawsuit seeks to litigate prior state and federal court rulings but adds three claims against the UTA and the CMA to declare that CC 2924.13 is constitutional and applies retroactively to junior lien foreclosure sales completed before the statute was enacted. “We believe that the UTA and the CMA are improper parties to litigation since neither was involved in the foreclosure, violated any law, or caused any harm,” said UTA President Ed Treder. “As a result, we intend to file a motion to dismiss the case for lack of jurisdiction and misjoinder or parties.”

“UTA has no legal relationship with the plaintiffs,” said Treder. “This is a ludicrous, and frivolous lawsuit but unfortunately, the UTA must defend the case. We are tendering the claim to our Directors & Officers Liability Insurance Provider to seek coverage for the legal expenses.”