ARIZONA REVISED STATUTES ON TRUSTS: 33-801. Definitions
In this chapter, unless the context otherwise requires:
1. "Beneficiary" means the person named or otherwise designated in a trust deed as the person for whose benefit a trust deed is given, or the person's successor in interest. [Note that this does not include a nominee like MERS. There is a reason for that. The legislature intended to create certainty in contracts and actions on contracts. Using a nominee immediately creates the question of agency. The question of agency immediately raises the question of "who is the principal?" As long as that question exists, this statute is violated. If this statue is violated the deed of trust is void.]
2. "Business day" means any day other than a Saturday or a legal holiday.
3. "Cash" means United States currency.
4. "Contract" means a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty, including but not limited to a note, A promissory note or provisions of any trust deed.
5. "Credit bid" means a bid made by the beneficiary in full or partial satisfaction of the contract or contracts which are secured by the trust deed. [Note that such credit bids are the rule rather than the exception and that the person making the credit bid is almost never the named the beneficiary. hence the sale is void]. [Note also that without an accounting for third party payments to the creditor in the securitization chain who has succeeded to the position of beneficiary BECAUSE THE SUCCESSION IS SHOWN IN THE COUNTY RECORDS, is voidable because the amount is incorrect, which is a question of fact that must be judicially resolved, which is why NO NON-JUDICIAL sale of securitized property is appropriate.] Such credit bid may only include an amount up to the full amount of the contract or contracts secured by the trust deed, less any amount owing on liens or encumbrances with interest which are superior in priority to the trust deed and which the beneficiary is obligated to pay under the contract or contracts or under the trust deed, together with the amount of other obligations provided in or secured by the trust deed and the costs and expenses of exercising the power of sale and the sale, including the trustee's fees and reasonable attorney fees actually incurred. (e.s.)
6. "Force majeure" means an act of God or of nature, a superior or overpowering force or an event or effect that cannot reasonably be anticipated or controlled and that prevents access to the sale location for conduct of a sale.
7. "Parent corporation" means a corporation which owns eighty per cent or more of every class of the issued and outstanding stock of another corporation or, in the case of a savings and loan association, eighty per cent or more of its issued and outstanding guaranty capital.
8. "Trust deed" or "deed of trust" means a deed executed in conformity with this chapter and conveying trust property to a trustee or trustees qualified under section 33-803 to secure the performance of a contract or contracts, other than a trust deed which encumbers in whole or in part trust property located in Arizona and in one or more other states.
9. "Trust property" means any legal, equitable, leasehold or other interest in real property which is capable of being transferred, whether or not it is subject to any prior mortgages, trust deeds, contracts for conveyance of real property or other liens or encumbrances.
10. "Trustee" means an individual, association or corporation qualified pursuant to section 33-803, or the successor in interest thereto, to whom trust property is conveyed by trust deed. The trustee's obligations to the trustor, beneficiary and other persons are as specified in this chapter, together with any other obligations specified in the trust deed.
11. "Trustor" means the person conveying trust property by a trust deed as security for the performance of a contract or contracts, or the successor in interest of such person.
DON'T TAKE ANYTHING FOR GRANTED. Just because the NAME WELLS FARGO APPEARS … IT MIGHT NOT BE QUALIFIED. If the entity named is a Wells Fargo subsidiary or other entity that is NOT a bank or other institution described here, then they can't be a trustee. If they can't be a Trustee, the Trust deed is probably no better than a nominee beneficiary which would be void or voidable.
Note SECTION B also --- that the trustee cannot have a conflict of interest with the beneficiary. If they show up in court in one case claiming rights as a beneficiary in a similar transaction involving the same pool, they are creating a question of fact that can only be resolved in a judicial foreclosure. And in the case of a substitution of trustee who facially or factually does not qualify, the substitution of trustee may be void or voidable.
33-803. Trustee of trust deed; qualifications
A. Except as provided in subsection B, the trustee of a trust deed shall be:
1. An association or corporation doing business under the laws of this state as a bank, trust company, savings and loan association, credit union, insurance company, escrow agent or consumer lender.
[Question: What if they ARE a bank but not qualified under State law to conduct business as a bank in this particular state? Or to be more esoteric, what if they are qualified to do business as a bank but they are not acting as a bank in this transaction?]
2. A person who is a member of the state bar of Arizona.
3. A person who is a licensed real estate broker under the laws of this state.
4. A person who is a licensed insurance producer under the laws of this state.
5. An association or corporation that is licensed, chartered or regulated by the federal deposit insurance corporation, the comptroller of the currency, the federal home loan bank, the national credit union administration, the farm credit administration, the federal reserve board or any successors.
6. The parent corporation of any association or corporation referred to in this subsection or any corporation all the stock of which is owned by or held solely for the benefit of any such association or corporation referred to in this subsection.
B. An individual trustee of a trust deed who qualifies under subsection A shall not be the beneficiary of the trust, but such restriction shall not preclude a corporate or association trustee that qualifies under subsection A and while acting in good faith from being the beneficiary, or after appointment from acquiring the interest of the beneficiary by succession, conveyance, grant, descent or devise.
C. A trustee of a trust deed who qualifies under subsection A shall not lend or delegate the trustee's name or corporate capacity to any individual or entity that does not qualify as a trustee of a trust deed. An individual, company, association or corporation shall not circumvent the requirements of subsection A by acting in concert with a nonqualifying trustee.
The statute says that the trustee mails the notice to all affected parties at least three months before the sale date. In a non-judicial sale, then, ALL parties having a potential stake in the outcome must be notified. This is the only way the statute can be constitutional. It's not up to the Trustee to adjudicate the rights of the parties if he wants to keep his exemption from liability, but if he knowingly fails to notify other parties whom he knows to exist, then it is obvious he is taking an interest in the litigation.
The attack on the trustee sale would simply be a certified letter followed by a lawsuit if necessary directed at the trustee. The letter would be an objection to the sale because the trustee has failed to notify the creditors, has not made adequate inquiry into the identity of all parties, and damages for slander of title. The objection, an early draft of which is contained in the forms on this blog, would also state that the obligation has been satisfied in whole or in part by third party payments from credit default swaps, insurance, guarantees, buy-backs, federal bailouts etc.
The demand would be for proof of inquiry --- the "pull-down report" (title report on the property) and all other efforts to identify the parties in what the trustee knows to be a securitized transaction with multiple intermediaries, each of whom appears to claim a stake in the property, and multiple creditors, none of whom have been notified, who have not provided or been asked to provide an accounting for all transactions relating to the their purchase of asset backed securities creating their beneficial ownership in a pool of assets that includes the subject loan, and whether any allocations have been made to account for third party payments.
In the alternative, the demand would be that the foreclosure be conducted in accordance with Arizona statutes governing judicial foreclosures that would then put the onus on the beneficiary to allege they are they are the creditor, that the obligation is due and to present allegations and , exhibits, witnesses and proof that they are entitled to a judgment in foreclosure. The non-judicial statutes could not have been intended as a direct confrontation with the 5th and 14th Amendment of the United States Constitution requiring no deprivation of life, liberty or property without due process. If that were otherwise, the statute would be unconstitutional on its face.
33-455. Conveyance of absolute title by judicial sale; effect upon rights of persons not parties
Every conveyance of real property by a commissioner, sheriff or other officer legally authorized to sell such property by virtue of a decree or judgment of any court within this state, shall be effectual to pass absolute title to the property to the purchaser thereof, but the conveyance shall not affect the right, title or interest of any person other than the parties to the conveyance, decree or judgment, and those claiming under them.
33-456. Passage of title to real or personal property by judgment
When a judgment directs the conveyance of real property or the delivery of personal property, the judgment shall pass title to such property without any act by the party against whom the judgment is given.
33-458. Resale of realty with intent to defraud; classification
A person who, after selling, bartering or disposing of, or, after executing a bond or agreement for the sale of land, again knowingly and with intent to defraud previous or subsequent purchasers, sells, barters or disposes of, or executes a bond or agreement to sell, barter or dispose of the same land or any part thereof to any other person for a valuable consideration, is guilty of a class 4 felony.
33-705. Purchase money mortgage or deed of trust; priority
A mortgage or deed of trust that is given as security for a loan made to purchase the real property that is encumbered by the mortgage or deed of trust has priority over all other liens and encumbrances that are incurred against the purchaser before acquiring title to the real property.
33-706. Assignment of mortgage; recording as notice
An assignment of a mortgage may be recorded in like manner as a mortgage, and the record is notice to all persons subsequently deriving title to the mortgage from the assignor.
33-708. Release by attorney in fact
An attorney in fact to whom the money due on a mortgage or deed of trust is paid may execute the release provided for in this article. Such acknowledgment of satisfaction or deed of release, duly acknowledged and recorded, showing the docket and page or recording number, releases the mortgage or deed of trust and revests in the mortgagor or person who executed the deed of trust, or his legal representatives, all title to the property affected by the mortgage or deed of trust.
33-721. Foreclosure of mortgage by court action
Mortgages of real property and deeds of trust of a type not included in the definition of deed of trust provided in section 33-801, notwithstanding any other provision in the mortgage or deed, shall be foreclosed by action in a court.
33-722. Election between action on debt or to foreclose
If separate actions are brought on the debt and to foreclose the mortgage given to secure it, the plaintiff shall elect which to prosecute and the other shall be dismissed.
33-741. Definitions
In this article, unless the context otherwise requires:
1. "Account servicing agent" means a joint agent of seller and purchaser, appointed under the contract or under a separate agreement executed by the seller and the purchaser, to hold documents and collect monies due under the contract, who does business under the laws of this state as a bank, trust company, escrow agent, savings and loan association, insurance company or real estate broker, or who is licensed, chartered or regulated by the federal deposit insurance corporation or the comptroller of the currency, or who is a member of the state bar of Arizona.
2. "Contract" means a contract for conveyance of real property, a contract for deed, a contract to convey, an agreement for sale or any similar contract through which a seller has conveyed to a purchaser equitable title in property and under which the seller is obligated to convey to the purchaser the remainder of the seller's title in the property, whether legal or equitable, on payment in full of all monies due under the contract. This article does not apply to purchase contracts and receipts, escrow instructions or similar executory contracts which are intended to control the rights and obligations of the parties to executory contracts pending the closing of a sale or purchase transaction.
3. "Monies due under the contract" means:
(a) Any principal and interest payments which are currently due and payable to the seller.
(b) Any principal and interest payments which are currently due and payable to other persons who hold existing liens and encumbrances on the property, the unpaid principal portion of which constitutes a portion of the purchase price, as stated in the contract, if the principal and interest payments were paid by the seller pursuant to the terms of the contract and to protect his interest in the property.
(c) Any delinquent taxes and assessments, including interest and penalty, due and payable to any governmental entity authorized to impose liens on the property which are the purchaser's obligations under the contract, if the taxes and assessments were paid by the seller pursuant to the terms of the contract and to protect his interest in the property.
(d) Any unpaid premiums for any policy or policies of insurance which are the obligation of the purchaser to maintain under the contract, if the premiums were paid by the seller pursuant to the terms of the contract and to protect his interest in the property.
4. "Payoff deed" means the deed that the seller is obligated to deliver to the purchaser on payment in full of all monies due under the contract to convey to the purchaser the remainder of the seller's title in the property, whether legal or equitable, as prescribed by the terms of the contract.
5. "Property" means the real property described in the contract and any personal property included under the contract.
6. "Purchaser" means the person or any successor in interest to the person who has contracted to purchase the seller's title to the property which is the subject of the contract.
7. "Seller" means the person or any successor in interest to the person who has contracted to convey his title to the property which is the subject of the contract.
33-807. Sale of trust property; power of trustee; foreclosure of trust deed
A. By virtue of his position, a power of sale is conferred upon the trustee of a trust deed under which the trust property may be sold, in the manner provided in this chapter, after a breach or default in performance of the contract or contracts, for which the trust property is conveyed as security, or a breach or default of the trust deed. At the option of the beneficiary, a trust deed may be foreclosed in the manner provided by law for the foreclosure of mortgages on real property in which event chapter 6 of this title governs the proceedings. The beneficiary or trustee shall constitute the proper and complete party plaintiff in any action to foreclose a deed of trust. The power of sale may be exercised by the trustee without express provision therefor in the trust deed.
B. The trustee or beneficiary may file and maintain an action to foreclose a deed of trust at any time before the trust property has been sold under the power of sale. A sale of trust property under the power of sale shall not be held after an action to foreclose the deed of trust has been filed unless the foreclosure action has been dismissed.
C. The trustee or beneficiary may file an action for the appointment of a receiver according to sections 12-1241 and 33-702. The right to appointment of a receiver shall be independent of and may precede the exercise of any other right or remedy.
D. The power of sale of trust property conferred upon the trustee shall not be exercised before the ninety-first day after the date of the recording of the notice of the sale. The sale shall not be set for a Saturday or legal holiday. The trustee may schedule more than one sale for the same date, time and place.
E. The trustee need only be joined as a party in legal actions pertaining to a breach of the trustee's obligation under this chapter or under the deed of trust. Any order of the court entered against the beneficiary is binding upon the trustee with respect to any actions that the trustee is authorized to take by the trust deed or by this chapter. If the trustee is joined as a party in any other action, the trustee is entitled to be immediately dismissed and to recover costs and reasonable attorney fees from the person joining the trustee.