1. State the elements of fraud.

2. Was B of A’s representation regarding the future valuation of the home an actionable assertion of fact?

3. Did the Cansinos establish that this home was fraudulently assessed at $620,000 in 2005 by showing the home was appraised between $350,000 and $400,000 five years later?

In approximately July 2005 a loan broker and an appraiser working for a subsidiary of Bank of America appraised the Cansinos home at a fair market value of $620,000. Based on that appraisal and other representations by lending personnel, the Cansinos elected to refinance their home with a $496,000 adjustable rate mortgage. Lending personnel told them their home would appreciate and they would be able to sell or refinance the home at a later date before having to make higher monthly loan payments. In 2010, the Cansinos discovered that their home was valued between $350,000 and $400,000. Soon thereafter they stopped making payments on the 2005 loan. As of March 2012 the monthly payments were approximately $1,960, the balance due on the loan was approximately $626,000, and the fair market value of the home was approximately $350,000. The trial court dismissed the Cansinos fraud action against B of A, and they appealed.

JUDICIAL OPINION

GROVER, J.…

Fraud

The elements of fraud are (1) misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance on the misrepresentation, (4) justifiable reliance on the misrepresentation, and (5) resulting damages….

I. The Future Appreciation Representation Plaintiffs allege that, prior to their August 2005 loan refinancing, defendants’ “lending personnel” represented that plaintiffs’ property was appreciating and that plaintiffs could obtain several years of appreciation in their property so that they could sell or refinance before having to make higher monthly payments or pay a future accumulated principal of $620,000.

Defendants argue that the alleged representations regard the future of the real estate market. As such, they are forecasts of future events and not actionable misrepresentations. We agree. The law is well established that actionable misrepresentations must pertain to past or existing material facts. (Gentry v. eBay, Inc. 121 Cal.Rptr.2d 703.) Statements or predictions regarding future events are deemed to be mere opinions which are not actionable….

Like acts of nature and their consequences, the future state of a financial market is unknown. Any future market forecast must be regarded not as fact but as prediction or speculation. As a matter of law, defendants’ alleged representations—that plaintiffs’ property would continue to appreciate in the future and that plaintiffs could then sell or refinance their home based on this forecasted future appreciation—are not actionable in fraud.

II. The Fair Market Appraisal Representation Plaintiffs allege that a loan broker and an appraiser working for American’s Wholesale Lender appraised their residence in July 2005 to have a fair market value of $620,000, and that defendants’ lending personnel represented to plaintiffs that the market value of the real property at that time was $620,000.

… Plaintiffs allege that the home was valued between $350,000 and $400,000 in 2010, but that allegation does not support plaintiffs’ claim that the 2005 appraisal was a misrepresentation….

Affirmed.