Foreclosure Defense: Get into the Details: Trustee Deeds

IT IS ENTIRELY POSSIBLE THAT THE TRUSTEE HOLDING THE DEED AND MORTGAGE, THE APPRAISER OR LENDER HOLDS AN INSURANCE POLICY THAT PROVIDES A BASIS FOR RECOVERY OF YOUR DOWN PAYMENT AND OTHER REFUNDS DUE FROM VIOLATIONS OF TILA, RESPA, RICO ETC.

In states that use Trustees for deeds and mortgages, you should of course check the requirements of being a Trustee and whether any transfers or assignments have occurred that effectively change the duties of the Trustee. So if your mortgage and note was bundled up with others and sold to a mortgage aggregator and eventually sold to an investment banker and then sold to an investor, the paper trail needs to be as precise as the original documentation when you took title to your house subject to your mortgage.

In all likelihood, based upon our current information and interviews, most of these deals have in one or more of the transfers, failed to comply with State law, failed to properly transfer rights, and have transferred some rights that cannot be properly transferred.

In Arizona for example, under ARS Section 33-820, the Trustee is described and there is plenty of case law that says the Trustee is a fiduciary (owes an obligation to protect) both the borrower and the lender.

SO IF THE TRUSTEE KNOWS FOR EXAMPLE, THAT THE MORTGAGE AND NOTE WERE GOING TO BE TRANSFERRED AND THAT THE LENDER WAS IN FACT NOT TEHR EAL LENDER, HE IS AWARE OF IMPROPER DISCLOSURE — AND THEREFORE (A) LIABLE FOR DAMAGES AND (B) PROBABLY HAS LOST HIS POWER OR AUTHORITY TO FORECLOSE THE PROPERTY BECAUSE HE IS ACTING ONLY ON BEHALF OF THE LENDER.

By failing to exercise proper due diligence on the status of the ownership of the mortgage and note and whether payments or refunds were due, the Trustee has not fulfilled the threshold requirements to post the sale of the property. Having failed that, the notice of sale is void or voidable.

This should be brought to the attention of the Trustee through a letter advising him/her that you will hold him/her accountable for the damages incurred, and that you challenge his/her right to proceed. 

It should also be brought to the attention of the Court and you should check with the clerk of the court on how you file a Notice of Contest in which you deny that the notice of sale is proper.

Tags: assignments, authority, damages, due diligence, fiduciary duty, insurance, trustee, trustee deeds
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