Alliance Mortgage Co. v. Rothwell

Opinion

ARABIAN, J.

We here determine whether a lender’s acquisition of security property by full credit bid at a nonjudicial foreclosure sale bars the lender as a matter of law from maintaining a fraud action against third party nonborrowers who fraudulently induced the lender to make the loans. The Courts of Appeal are in conflict on this issue. We granted review to resolve the conflict, and now conclude that such an action is not precluded. We therefore affirm the judgment of the Court of Appeal.

I. Facts and Procedural Background

This matter reaches us following plaintiff Alliance Mortgage…