Tag Archives: non-judicial

Arizona’s Non-Judicial Foreclosure Statutes do not Require the Beneficiary to ‘Show the Note’ Before Commencing a Non-Judicial Foreclosure

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The court in deciding Famili v. Wells Fargo Bank NA, 2013 U.S. Dist. (D. Ariz., 2013) reaffirmed the holding that “Arizona’s non-judicial foreclosure statutes do not require the beneficiary to prove its authority or ‘show the note’ before the trustee may commence a non-judicial foreclosure.”

All counts alleged in plaintiff’s complaint centered on her assertion that whenever the promissory note was transferred or a change was made to the beneficiary of the deed of trust, the holder or beneficiary was required to demonstrate authority for the transfer or substitution. This court noted that each claim of breach of contract and lack of authority put forth by the plaintiff was an iteration of the “show-me-the-note” argument resolved by the Arizona Supreme Court in Hogan v. Wash. Mut. Bank, N.A., 230 Ariz. 584, 277 P.3d 781, 782 (Ariz. 2012).

Thus, as a matter of Arizona law, the court found the plaintiff’s argument without merit.

California Court Finds that MERS Was Not Liable for Wrongful Foreclosure, Breach of Contract, and Breach of the Implied Covenants of Good Faith and Fair Dealing

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The United States District Court for the Central District of California hearing Gaitan v. MERS, et al, 09-1009 (C.D. Cal. 2009) found that MERS had the right to initiate foreclosure proceedings. The court also found that MERS was not liable for claims including wrongful foreclosure, breach of contract, and breach of the implied covenants of good faith and fair dealing.

The plaintiff alleged that several flaws in the documents he received proved the mortgage loans were obtained by fraud. Specifically, he alleged that neither the adjustable rate mortgage loan documents nor the truth in lending disclosure statement “clearly and conspicuously disclosed”: (1) the actual interest rate on which the scheduled payments were based; “(2) that making the payments according to the payment schedule listed in the TILD will result in negative amortization and that the principal balance will increase; and (3) that the payment amounts listed on the TILD are insufficient to pay both principal and interest.”

The plaintiff alleged that not only were the disclosure statements “unclear and inconspicuous,” but they were “deceptive” and “based in order to mislead and deceive plaintiff into believing that he would be getting a loan with a low fixed payment rate that would be sufficient to pay both interest and principal.” The court examined each of the claims in the plaintiff’s argument in turn, and determined that the plaintiff failed to argue the viability of any of the claims.