What is a Deed of Trust?
A deed of trust is a legal document that transfers the title of real property from one person to another, in connection with a loan, for the purpose of securing payment of the debt. An Arizona deed of trust typically involves three parties: the borrower – the property owner who grants the deed of trust, the lender – the beneficiary of the deed of trust, and trustee (usually an attorney or escrow company) – who receives title to the property under the deed of trust and holds it in trust for the benefit of the beneficiary. A deed of trust has certain similarities to a mortgage but is different in significant ways.
For a deed of trust to be enforceable as a means of collecting on an unpaid debt, it must be recorded in the land evidence records in the county where the property is located. When the debt is resolved by the borrower’s payment in satisfaction of the lender’s requirements, the trustee should record a document releasing and reconveying the deed of trust, effectively returning title to the borrower and acknowledging retirement of the debt.
If a borrower defaults on the loan, a lender holding a beneficial interest in a deed of trust may enforce the debt either through a process of judicial foreclosure, a lawsuit, or by directing the trustee to conduct a private sale of the property in an advertised form of auction. The private sale must be conducted strictly in accordance with procedures specified by state law.
If you have paid off a loan and need help with having the related deed of trust removed from the chain of title to your property in Arizona, or if you are facing a forced sale of your property to satisfy a loan balance secured by a deed of trust, contact Resolvere Law PLLC at (480) 568-1327 for assistance.
What Is the Process for Removal Of a Deed Of Trust In Arizona?
A deed of trust may be removed by the trustee voluntarily transferring the beneficial title interest in the property back to the borrower or by a court order that it be removed from the chain of title. If a loan is repaid to the lender’s satisfaction, the trustee should voluntarily record a document releasing the deed of trust and stating that the trustee’s interest is transferred back to the borrower. This is often processed in escrow in connection with a refinance of a loan or a sale of the property. The escrow agent obtains, in advance of closing, the trustee’s release and reconveyance of the deed of trust that the escrow agent may only record if the lender receives at closing directly out of escrow the loan payoff amount to which it has agreed.
If, for some reason, outside of the escrow context, a trustee should refuse to release and reconvey a deed of trust, a lawsuit or the threat of a lawsuit will be necessary to force the issue. In such a lawsuit, a borrower would be required to name the lender as a party defendant and also name all other parties that have a recorded interest in the underlying property, including other holders of deeds of trust, mortgages, or liens. A borrower with proof of payment of the lender’s terms would be entitled to the court’s order to effectively remove the lender’s deed of trust from the chain of title and nullify its force and effect.
What Are the Statues of Limitations on Removing a Deed of Trust?
There is a statute of limitations on lenders suing on a loan secured by a deed of trust on a home. In general, lenders must pursue legal action within six years from the date of any default. This means that if more than six years have passed without a lawsuit being filed by the lender, it may be possible for a borrower to take legal action to have the deed of trust removed and overcome any argument from the lender that its debt is still enforceable, including through its deed of trust.
However, this statute does not apply to all cases. It’s essential to connect with a real estate lawyer to understand your rights and the process of the removal of a deed of trust from the chain of title.
When Should I Call a Lawyer?
If you’re behind on your loan payments or are in danger of foreclosure through a trustee’s deed of trust sale, contact an experienced real estate lawyer as soon as possible. An attorney may be able to help you negotiate with your lender and develop a plan to avoid a deed of trust sale. An attorney can also explain your rights and options under the law, including the possibility of having a deed of trust removed. If you have multiple deeds of trust, a lawyer can also help you navigate the legal process to avoid foreclosure or a forced sale by any one of the lenders.
It’s important to have an experienced attorney on your side who can protect your interests if you are facing a deed of trust sale. If you’re facing such action by a lender, don’t wait to call a lawyer – the sooner you get help, the better your chances of avoiding foreclosure and keeping your home. Call Resolvere Law PLLC at (480) 568-1327 to get the valuable representation you need and deserve.