WHAT IF THE TRUSTEE DOESN’T QUALIFY UNDER LAW AS A TRUSTEE?

DON’T TAKE ANYTHING FOR GRANTED. Just because the NAME WELLS FARGO APPEARS, IT MIGHT NOT BE QUALIFIED. If the entity named is a Wells Fargo subsidiary or other entity that is NOT a bank or other institution described here, then they can’t be a trustee. If they can’t be a Trustee, the Trust deed is probably no better than a nominee beneficiary which would be void or voidable.

Note SECTION B also — that the trustee cannot have a conflict of interest with the beneficiary. If they show up in court in one case claiming rights as as a beneficiary in a similar transaction involving the same pool, they are creating a question of fact that can only be resolved in a judicial foreclosure. And in the case of a substitution of trustee who facially or factually does not qualify, the substitution of trustee may be void or voidable.

33-803. Trustee of trust deed; qualifications

A. Except as provided in subsection B, the trustee of a trust deed shall be:

1. An association or corporation doing business under the laws of this state as a bank, trust company, savings and loan association, credit union, insurance company, escrow agent or consumer lender. [Question: what if they ARE a bank but not qualified under State law to conduct business as a bank in this particular state? Or to be more esoteric, what if they are qualified to do business as a bank but hey are not acting as a bank in this transaction?]

2. A person who is a member of the state bar of Arizona.

3. A person who is a licensed real estate broker under the laws of this state.

4. A person who is a licensed insurance producer under the laws of this state.

5. An association or corporation that is licensed, chartered or regulated by the federal deposit insurance corporation, the comptroller of the currency, the federal home loan bank, the national credit union administration, the farm credit administration, the federal reserve board or any successors.

6. The parent corporation of any association or corporation referred to in this subsection or any corporation all the stock of which is owned by or held solely for the benefit of any such association or corporation referred to in this subsection.

B. An individual trustee of a trust deed who qualifies under subsection A shall not be the beneficiary of the trust, but such restriction shall not preclude a corporate or association trustee that qualifies under subsection A and while acting in good faith from being the beneficiary, or after appointment from acquiring the interest of the beneficiary by succession, conveyance, grant, descent or devise.

C. A trustee of a trust deed who qualifies under subsection A shall not lend or delegate the trustee’s name or corporate capacity to any individual or entity that does not qualify as a trustee of a trust deed. An individual, company, association or corporation shall not circumvent the requirements of subsection A by acting in concert with a nonqualifying trustee.

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