Publication
Financial Services Litigation Bulletin – September 13, 2011
Schayes Shows the Way: Federal District Court for the District of Arizona Holds That Notice of Trustee's Sales and Substitutions of Trustees are Not Actionable Under A.R.S. § 33-420.
By Rick Herold and Mike Coccaro
Defaulting homeowners continue to flood Arizona courts (federal and state) with foreclosure-delay lawsuits alleging a variety of legal theories while admitting their default on their promissory note(s). Plaintiffs have shown great versatility and alleged claims running the gamut from ancient claims – such as claims of champerty and barratry – to new claims such as seeking to establish a private-right of action under the Home Affordable Mortgage Program. Plaintiffs have sought to avoid foreclosure by alleging the "vapor money theory" – the claim that financial institutions do not loan "real money" – and the thoroughly debunked "show me the note" claim whereby plaintiffs contend that a trustee's sale may not proceed absent production of the "original, wet-ink signature" on the promissory note and deed of trust. Financial institutions' well-articulated defenses to these claims have allowed the courts to see such claims as frivolous.
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