Full question:
I have disputed the trustee sale on my home scheduled for May 13th. I am desperately trying to negotiate a modification but they are no longer the 'true owners' of the note/deed of trust. They cannot tell me who holds the note. I got further notice that they plan to go ahead with the sale as scheduled but put in a clause stating the following: 'IF THE TRUSTEE IS UNABLE TO CONVEY TITLE FOR ANY REASON THE SUCCESSFUL BIDDERS SOLE AND EXECUTIVE REMEDY SHALL BE THE RETURN OF MONIES PAID TO THE TRUSTEE AND THE SUCCESSFUL BIDDER SHALL HAVE NO FURTHER RECOURSE'. Is the trustee supposed to start all over again since the true owner is unknown and therefor his fiduciary duty has been breached and is a form of fraud? I also believe at my local home owner's association level and the real estate company that works with the community association has a buyer lined up. All my notices had been opened before I received them.
- Category: Real Property
- Subcategory: Foreclosure
- Date:
- State: Arizona
Answer:
During the past decade, mortgages were sold and resold, bundled into securities and sold to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed. Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and increasing the pressure on the lender to renegotiate the mortgage. The original note is almost always electronically retained and can eventually be found.
Judges are often willing to accept electronic documentation. Lenders are sometimes allowed to produce other paperwork to establish they are the holder of a loan. There have been cases where the foreclosure action was thrown out because of a failure to produce the note, but it will be a matter of subjective determination for the court to decide if the foreclosure may proceed.
Fraud is generally defined in the law as an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage. To constitute fraud the misrepresentation or omission must be made knowingly and intentionally, not as a result of mistake or accident, or in negligent disregard of its truth or falsity. Also, the plaintiff must prove that the defendant intended for the plaintiff to rely upon the misrepresentation and/or omission; that the plaintiff did in fact rely upon the misrepresentation and/or omission and that the plaintiff suffered injury or damage as a result of the fraud.
Most foreclosures in Arizona are judicial foreclosures. In a non-judicial foreclosure, if you wish to contest the foreclosure, you will have to file a lawsuit yourself. When you do this, you ask the court to temporarily stop the foreclosure so that you can resolve the legal issues in court. Once you are in court, you can raise the same defenses you would have raised in a judicial foreclosure proceeding.
In these lawsuits, the debtor typically asks the court for three things, in the following order:
-a temporary restraining order (which lasts for a certain number of days, typically under 2 weeks)
-a preliminary injunction (will last until the court decides the case), and
-a permanent injunction (which will be granted if you win your case).
Lack of funds and inability to pay is not considered a valid defense. A valid defense may include such excuses as identifying the incorrect borrowing party to the loan contract, or having made all payments on time, among others. The answer is an opportunity to show why the property shouldn't be foreclosed upon.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
