California Court Finds Promissory Estoppel and Fraud to Stop Foreclosure

Plaintiff, a married woman, purchased residence house and took out a purchase money mortgage. When the loan became variable she fell behind on her payments and filed for Chapter 7 bankruptcy. She intended to convert to a Chapter 13 bankruptcy and obtain her husband's aid in keeping the house. Bank's agents told her they will modify the loan if she forgoes further bankruptcy proceedings and she agreed, but the bank obtained relief from automatic stay and foreclosed. Held: she stated proper causes of action for fraud and promissory estoppel against the bank.