## Facts

- Homeowners Guillermo Vivado and his wife borrowed from Bank-Fund Staff Federal Credit Union, secured by a deed of trust on their home.
- After default, the lender initiated a nonjudicial foreclosure and sent an initial notice for a June 1990 sale stating the amount needed to cure and reinstate the loan under D.C. Code § 45-715.1.
- The homeowners filed bankruptcy, delaying the sale.
- The lender then sent a second foreclosure notice for a September sale that asserted the statutory right-to-cure protections did not apply and omitted the cure amount.
- The foreclosure sale proceeded; the lender purchased the property and filed a Superior Court action seeking possession.
- The trial court ruled the property remained the homeowners’ residence, held the second notice deficient under § 45-715.1, and granted summary judgment for the homeowners on the possession action.
- In related litigation, the homeowners obtained a preliminary injunction against further foreclosure activity, conditioned on paying monthly sums equal to their first and second trust obligations as security under Super. Ct. Civ. R. 65(c).
- The lender appealed the summary judgment; the homeowners appealed the security condition.

## Issues

1. Whether a foreclosure notice for a residential mortgage is invalid under D.C. Code § 45-715.1 if it states there is no right to cure and omits the cure amount, despite the borrowers’ alleged actual knowledge of the amount.
2. Whether an invalid foreclosure notice and sale deprive the purchaser-lender of standing to obtain possession through a post-sale possessory action.
3. Whether the trial court properly determined on summary judgment that the loan was a “residential mortgage” covered by § 45-715.1.
4. Whether requiring monthly payments as Rule 65(c) security for a preliminary injunction against foreclosure was an abuse of discretion.
5. Whether the cure amount stated in a foreclosure notice must be accurate, and what remedy applies when the record is insufficient to assess accuracy.

## Decision

- The court affirmed summary judgment for the homeowners in the possession action because the second foreclosure notice was invalid.
- The court held the lender lacked standing to obtain possession based on a foreclosure sale conducted after statutorily defective notice.
- The court affirmed the determination that the mortgage was a residential mortgage subject to § 45-715.1.
- The court held there was no abuse of discretion in conditioning the preliminary injunction on security payments equal to the borrowers’ monthly obligations.
- The court remanded for further proceedings to determine whether the cure amount stated in a later foreclosure notice was accurate and properly based on sums secured by the property.

## Legal Principles

- For covered residential mortgages, D.C. Code § 45-715.1 requires foreclosure notices to state the borrower’s right to cure and the amount necessary to cure and reinstate.
- Statutory notice compliance is mandatory; a notice that misstates the absence of a right to cure or omits the cure amount is invalid, even if borrowers may have learned the figures from other sources.
- A foreclosure sale following an invalid residential cure notice does not supply a valid basis to claim a superior right of possession; the purchaser-lender may lack standing in a possessory action.
- The cure amount stated in the notice must be accurate and tied to obligations secured by the property.
- Under Super. Ct. Civ. R. 65(c), the trial court has discretion to require security for a preliminary injunction in an amount reflecting the enjoined party’s potential losses, including monthly payment equivalents.

## Conclusion

The court enforced strict statutory cure-notice requirements for residential foreclosures, holding that a notice denying the right to cure and omitting the cure amount invalidated the foreclosure and barred the lender’s possessory claim, while also approving substantial Rule 65(c) security and requiring factual findings on the accuracy of any stated cure amount.


Bank-Fund Staff Fed. Credit Union v. Cuellar, 639 A.2d 561 (D.C. 1994)