Sounds like a bunch of bs to me. Naked title transfers all title as security for the loan. The only thing is the pecking order of this title held. Senior claims and junior claims to title. Because all title is transfered, senior claims can wipe out junior claims and that includes any imagined equity of the owner.
Sounds like your the friend, or a want to be law student hoping to establish some new case law and even if you did the lenders would have new law passed before you turned around but in this case your chances of changing established law are one in a billion, good luck, have fun.
Posted by Darryle-Ca on August 07, 2006 at 10:14:21:
In a standard deed of trust does the borrower/trustor irrevocably grant and convey 100% legal title to the trustee, to hold in trust, with power of sale?
Interesting question Darryle…the Deed of Trust does not grant or convey title to anyone…it is merely a contract stating what the parties agreed to and how all situations would be handled, ie., default, foreclosure, etc.
In common practice the deed of trust gives the beneficiary the right to assign a trustee to carry out these provisions which almost always include the power of sale in event of the breach of the contract.
Posted by dealmaker on August 07, 2006 at 14:45:32:
Trustee has TWO duties; in the event of default to conduct (after proper notices)a TRUSTEE’S SALE, which is generally referred to as a foreclosure. The second duty is to issue a RELEASE AND RECONVEYANCE when the debt has been satisfied.
So in effect the trustee does have power of sale, but under very specific circumstances.
Posted by Darryle-Ca on August 07, 2006 at 22:19:06:
If the Deed of Trust does not grant or convey title to anyone(the trustee), how is it possible for the trustee to sell via foreclosure then convey via trustee’s deed the property to a successful bidder at the auction? And how is it possible for them to re-convey title to the borrower once the beneficiary is paid off?
Yes, in one respect the trustee does hold title in trust for the beneficiary…“Naked Title” is the common term used to describe this.
He, like any other trustee, is acting solely on and at the direction of the beneficiary…he can do nothing other than that which he is directed by the beneficiary.
The second paragraph of most DOT will say something like…“trustee is holding title in trust for the benefit of beneficiary”…therefore the term naked title.
You are right, title rights are transfered. It has been to many years since I studied this and my books and records are two states away, but for some reason the term “naked title” being transfered to the trustee is rolling around the rear of my brain, or maybe I’m just having a stroke.
Posted by Darryle-Ca on August 09, 2006 at 10:38:02:
The reason why I posted my original question is because, it is one of the questions that I had a friend who was recently foreclosed on(so he thought) and was about to be evicted by the new owner, use to invalidate the foreclosure.
During the eviction proceeding I had my friend claim partial legal title to the property. Of course once he did that, the eviction court judge realized that he could not rule on title issues and told the new owner to transfer the case from his court to civil court.
Once in civil court, I told my friend to ask the foreclosing bank(who was now present) the questions below:
In a standard deed of trust does the borrower/trustor irrevocably grant and convey 100% legal title to the trustee, to hold in trust, with power of sale?
If they answered yes to question #1, he then asked ?being that the grant/conveyance was irrevocable, how is it possible for the same borrower/trustor to obtain a junior deed of trust using legal title to the same property as collateral, unless of course, the trustee of the senior deed of trust reconveyed partial legal title back to the borrower/trustor, so that they could subsequently irrevocably grant and convey said title to the trustee of the junior trust deed??
If they answered yes to #1 he also asked, ?how is it possible for a trustee of a junior trust deed to non-judicially foreclose an interest (legal title) they never had??
If they answered no to question #1 he asked, ?being that the grant/conveyance was irrevocable, how is it possible for a trustee in a senior deed of trust to exercise its power of sale and non-judicially foreclose, then subsequently transfer 100% legal title to the collateral, to a successful third-party bidder at a public auction via a trustee?s deed? if they never held 100% legal title in the first place?
Also if they answered no to #1 he asked, ?is it possible that all trust deeds are illegal or unlawful since they violate the 14th Amendment to the U.S. Constitution which reads in part ?No state shall make or ENFORCE any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or PROPERTY, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.??
You see, by knowing exactly what the trustee really holds in trust as collateral for the benefit of the beneficiary, and by asking the right questions, I legally caused a major bank to rescind their trustee’s sale on the grounds that they sold 100% legal title to a property in which their trustee only held partial legal title to.
Posted by Darryle-Ca on August 09, 2006 at 11:42:40:
The reason why I posted my original question is because, it is one of the questions that I had a friend who was recently foreclosed on(so he thought) and was about to be evicted by the new owner, use to invalidate the foreclosure.
During the eviction proceeding I had my friend claim partial legal title to the property. Of course once he did that, the eviction court judge realized that he could not rule on title issues and told the new owner to transfer the case from his court to civil court.
Once in civil court, I told my friend to ask the foreclosing bank(who was now present) the questions below:
In a standard deed of trust does the borrower/trustor irrevocably grant and convey 100% legal title to the trustee, to hold in trust, with power of sale?
If they answered yes to question #1, he then asked ?being that the grant/conveyance was irrevocable, how is it possible for the same borrower/trustor to obtain a junior deed of trust using legal title to the same property as collateral, unless of course, the trustee of the senior deed of trust reconveyed partial legal title back to the borrower/trustor, so that they could subsequently irrevocably grant and convey said title to the trustee of the junior trust deed??
If they answered yes to #1 he also asked, ?how is it possible for a trustee of a junior trust deed to non-judicially foreclose an interest (legal title) they never had??
If they answered no to question #1 he asked, ?being that the grant/conveyance was irrevocable, how is it possible for a trustee in a senior deed of trust to exercise its power of sale and non-judicially foreclose, then subsequently transfer 100% legal title to the collateral, to a successful third-party bidder at a public auction via a trustee?s deed? if they never held 100% legal title in the first place?
Also if they answered no to #1 he asked, ?is it possible that all trust deeds are illegal or unlawful since they violate the 14th Amendment to the U.S. Constitution which reads in part ?No state shall make or ENFORCE any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or PROPERTY, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.??
You see, by knowing exactly what the trustee really holds in trust as collateral for the benefit of the beneficiary, and by asking the right questions, I legally caused a major bank to rescind their trustee’s sale on the grounds that they sold 100% legal title to a property in which their trustee only held partial legal title to.
Posted by John Merchant on August 29, 2006 at 19:12:05:
Get real.
When the creditor wants to foreclose, he’ll get this matter to his lawyer, and the foreclosure will proceed.
In order to stop or even delay a foreclosure, you’d have to post a cash bond for court costs and atty’s fees and that effectively stops all such silly dreaming and posturing…as if you can’t even pay the note payments, you’re sure not going to be able to ante up the “jack” to post a costs-bond or even pay his own atty’s fees.