The Arizona Supreme Court has resolved a recurring question: does the trustee have to “show the promissory note” in order to be able to foreclose by non-judicial trustee sale.  No, said the Supreme Court in its May 18, 2012 decision in Hogan v. Washington Mutual Bank.

The case involved two properties purchased by the borrower, John Hogan.  When Hogan received loans from Long Beach Mortgage Company (“Long Beach”), the properties were encumbered with deeds of trust.  Hogan defaulted on the loans, so the trustee under the deeds of trust recorded notices of trustee sales, in which it named Washington Mutual Bank and Deutsche Bank as the beneficiaries. [Read more…]

Arizona’s law does not require the recording of an assignment of a deed of trust before recording a notice of trustee’s sale where the beneficiary holds a promissory note that was endorsed and payable to bearer.

In Vasquez v. Saxon Mortgage, Inc., the borrower, Julia Vasquez, refinanced her home loan by signing a promissory note and deed of trust in favor of Saxon Mortgage, Inc. (“Saxon”).  Later, Saxon transfered the Note to Deutsche Bank National Trust Company as Trustee for Saxon Asset Securities Trust 2005-3 (“Deutsche Bank”).  Saxon simply endorsed the Note in blank, but the assignment of the Note was not recorded, and an assignment of the Deed of Trust was not recorded.  After Vasquez defaulted on the loan, Deutsche Bank appointed a new trustee under the Deed of Trust.  The new trustee then recorded a notice of trustee’s sale.  Thereafter, Saxon recorded an assignment of the Deed of Trust to Deutsche Bank. [Read more…]

Various sources have reported that JP Morgan Chase has temporarily halted foreclosures because of potentially flawed paperwork.  One issue that has arisen is reports that the people responsible for reviewing the loan documents failed to do so, such that they were actually unable to truthfully verify that the loans were in default and the amount of the default.  Chase’s stay on foreclosures follows GMAC’s halting of certain foreclosures and evictions in 23 states last week based on procedural problems in its paperwork.

According to reports, the stoppages are just temporary and will not significantly affect the overall number of foreclosures.

The Federal government has two programs to help the unemployed avoid foreclosure.

Through the Housing Finance Agency (HFA) Innovation Fund for the Hardest Hit Housing Markets (the Hardest Hit Fund), there $2 billion of  assistance that will be made available to those having difficulty making their loan payments due to unemployment.   This fund will be distributed to states that have been hardest hit by the downturn in the economy.  Alabama will receive over $60 million.  Arizona is not on the list published by the government. [Read more…]