Hogan Highlights

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Friday, May 18, 2012 11:54 AM
To: Charles Cox
Subject: Hogan Highlights

Hogan Highlights

by Beth Findsen at Findsenlaw

Here is the AZ Supreme Court decision in Hogan v WaMu

Hogan v WaMu AZ SC 2012

In my opinion, the best parts (even though some should be entirely obvious, in Arizona, they aren’t always) are:

Hogan argues that a deed of trust, like a mortgage,“may be enforced only by, or in behalf of, a person who is entitled to enforce the obligation the mortgage secures.”Restatement (Third) of Prop.: Mortgages § 5.4(c) (1997); see Hill v. Favour, 52 Ariz. 561, 568-69, 84 P.2d 575, 578 (1938). We agree.

The trust deed transfers an interest in real property, securing the repayment of the money owed under the note. See A.R.S. §§ 33-801(4), -801(8), -801(9), -805, -807(A).

Arizona’s anti-deficiency statutes protect against such occurrences by precluding deficiency judgments against debtors whose foreclosed residential property consists of 2.5 acres or less, as is the case here. See A.R.S. § 33-814(G); Mid Kansas Fed. Sav. & Loan Ass’n of Wichita v. Dynamic Dev. Corp., 167 Ariz. 122, 126, 804 P.2d 1310, 1314 (1991); Emily Gildar, Arizona’s Anti-Deficiency Statutes: Ensuring Consumer Protection in a Foreclosure Crisis, 42 Ariz. St. L.J. 1019, 1020 (2010). Moreover, the trustee owes the trustor a fiduciary duty, and may be held liable for conducting a trustee’s sale when the trustor is not in default. See Patton v. First Fed. Sav. & Loan Ass’n of Phoenix, 118 Ariz. 473, 476, 578 P.2d 152, 155 (1978).

And these selections show what needs to be pled in Arizona, if feasible:

But Hogan has not alleged that WaMu and Deutsche Bank are not entitled to enforce the underlying note; rather, he alleges that they have the burden of demonstrating their rights before a non-judicial foreclosure may proceed.

Hogan’s complaints do not affirmatively allege that WaMu and Deutsche Bank are not the holders of the notes in question or that they otherwise lack authority to enforce the notes.

The dispositive question here is whether the trustee, acting pursuant to its own power of sale or on behalf of the beneficiary, had the statutory right to foreclose on the deeds of trust. See Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1043-44 (9th Cir. 2011).

Hogan does not dispute that he is in default under the deeds of trust and has alleged no reason to dispute the trustee’s right.

hogan-v-wamu-az-sc-2012.pdf