Deed of Trust

News & Analysis as of

Lenders and Servicers: Be Aware of How Trustees Handle Excess Proceeds from HOA Foreclosure Sales in Nevada

Lenders and servicers have been addressing the issue of some Nevada courts ruling that a foreclosure sale by a homeowners association (HOA) "wipes out" a senior deed of trust. Since the date of our last legal alert on this...more

Washington Court of Appeals Confirms Lenders’ Right to Obtain Deficiency Judgments Against Guarantors Following Nonjudicial...

The Deed of Trust Act generally bars a lender from seeking a deficiency judgment against a borrower following nonjudicial foreclosure of a deed of trust securing the borrower's loan. The Act contains some exceptions in the...more

Recent Deed of Trust Act Cases Pose New Challenges

In 2013, Washington courts issued several decisions impacting the way banks, loan servicing companies, foreclosure trustees and other industry participants must approach claims arising out of nonjudicial foreclosure...more

California Court Rejects “Sham Guaranty” Defense; Enforces Guaranty

The “sham guaranty” defense may absolve a guarantor of liability when no deficiency is available against the borrower, and the guarantor is really the borrower with a different name. In California Bank and Trust v. Lawler...more

Why Take a Deed in Lieu of Foreclosure? Why Not?

So you're headed for receivership and foreclosure, when the borrower rep or your counsel asks, "What about a deed in lieu?" "I don't know," you think. "Getting a receiver appointed and foreclosing is what I'm most familiar...more

Arizona Court of Appeals Holds That Certain Residential Developers Are Not Protected By The Anti-Deficiency Statute After...

Nearly three years ago, in M&I Marshall & Isley Bank v. Mueller, the Arizona Court of Appeals held that the Arizona anti-deficiency statute protects a borrower who started, but never completed, construction of a single-family...more

Bank Obtains Dismissal Of Surviving Heir’s Reverse Mortgage Class Action

On January 3, the U.S. District Court for the Northern District of California dismissed with prejudice a putative class action alleging a bank breached its Home Equity Conversion Mortgage Deed of Trust and HUD regulations by...more

Prospective Waivers of the Fair Market Value Defense Held Invalid

The Arizona Court of Appeals recently held that commercial borrowers and guarantors cannot prospectively waive their right to limit their damages in a deficiency action on the basis of the fair market value of property sold...more

Be Secure In Understanding Secured Interests

When a business borrows money, especially when it’s a new business, the lender wants to make sure it will be repaid even if the business fails. The lender often asks for additional security that it will be paid. Additional...more

BVI Case Notes, October 2013

Below is a summary of recent cases out of the British Virgin Islands (BVI) Commercial Court, compiled by Harneys’ Litigation team. Ruling on the use and status of ancillary relief proceedings and forum non conveniens...more

Arizona Decision May Complicate Foreclosure and Eviction Process for Lenders

A recent Arizona Court of Appeals decision could create new complexities for lenders exercising their power of sale under a deed of trust. In Grady v. Superior Court of Maricopa County, the Court of Appeals sided with the...more

Court Says Refinancing Lender Can’t Get No Satisfaction When Paying Down Existing Lender’s HELOC

Loan servicers often receive payments on open-end home equity lines of credit (“HELOC”) that pay the balance down to $0. Sometimes that is because the borrower intends to pay off the loan through a refinancing or sale of the...more

A Non-Purchase Money Second Deed of Trust is Not Protected by Arizona’s Anti-deficiency Statute

Arizona anti-deficiency laws do not prohibit a non-purchase money lender from suing on its note after foreclosure by a senior lender. In Wells Fargo Bank, N.A. v. Brewer, No. 1CA-CV 12-0383 (Ariz. Ct. App. May 21, 2013...more

Show-Me-The-Note v. Split-the-Note: An Overview of Rulings from the Fifth Circuit Court of Texas

In the case of Ashley Martins v. BAC Home Loans Servicing, L.P. and Federal National Mortgage Association (No. 12-20559, 2013 WL 3213633), the Fifth Circuit Court of Texas was first asked to decide whether the...more

Popeye And Purchase Money Loans

In Enloe v. Kelso, 2013 WL 3357884 (2d Dist. 2013), the Second District Court of Appeal wrote a (characteristically) “short and sweet” opinion holding that the prohibition on obtaining a deficiency judgment under a deed of...more

Changes to the Recordation Tax in Maryland for Refinancing Commercial Mortgage Loans: Recordation Tax Imposed Only on New Money

Maryland Governor Martin O’Malley signed into law an act providing relief to commercial borrowers that wish to refinance or modify loans originally secured by indemnity deeds of trust. This new law, effective July 1, 2013,...more

Important Changes to Nevada's Non-Judicial Foreclosure Process

Lenders who secure loans with real property and their foreclosing trustees should be aware of important changes to the Nevada Revised Statutes regarding non-judicial foreclosures that went into effect on June 1, 2013....more

Oregon Supreme Court Rulings Allow Nonjudicial Foreclosures To Proceed

On June 6, the Oregon Supreme Court issued a pair of rulings resolving issues around the role of MERS in the non-judicial foreclosure process and allowing such foreclosures to move forward....more

An Overview of Trustee's Sales in the Commonwealth of Virginia

Lenders most often choose to proceed with the trustee's sale pursuant to the deed of trust because a trustee's sale is faster and cheaper than proceeding with a judicial sale, and it has advantages over accepting a deed in...more

Tax Lien Purchasers Must Give MERS Notice, Says Arizona Appeals Court

Recognizing MERS’s role in modern day mortgage lending, the Arizona Court of Appeals confirmed in Delo v. GMAC Mortgage, LLC that tax lien purchasers must notify MERS when identified in the Deed of Trust before foreclosing on...more

Deed of Trust Security Prevents Merger of Estates - Legal Doctrine of Merger of Real Property Estates Will Not Defeat the...

A California Appellate Court recently determined that a lender taking a security interest in both California real property and an easement benefiting such real property by recording a deed of trust does not lose its security...more

Maryland Removes Potential Barrier To Refinance Transactions

On May 2, Maryland enacted SB 199, which authorizes a mortgagor to refinance the full balance of a loan secured by a first mortgage or deed of trust without the permission of the holder of a junior lien if (i) the principal...more

Former Owner Cannot Challenge Foreclosure Procedure In Forcible Detainer Action

In McDaniel v. HSBC Bank USA, NA, McDaniel appealed a trial court's granting a bank possession of real property purchased at a foreclosure sale. No. 05-11-00238-CV, 2013 Tex. App. LEXIS 1079 (Tex. App.—Dallas February 6,...more

Maryland Again Changes Recordation Tax Payable on Indemnity Deeds of Trust - Effective as of July 1, 2013

Recordation Tax Now Charged Upon Recordation of Indemnity Deeds of Trust Securing a Guarantee of a Loan or Related Loans of $3,000,000 or More - Governor Martin O’Malley signed legislation this week that will again...more

NEW CASE ALERT: California Affirms Equitable Exceptions To The “Merger Doctrine"

The merger doctrine is not absolute and its application will depend upon the equities and the parties’ intentions, the California Court of Appeal recently held in Hamilton Court, LLC v. East Olympic, L.P., 2013 WL 1613269...more

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