Arizona Foreclosure Defense, Action to Enjoin Trustee's Sale, and Loss Mitigation Package

ARIZONA FORECLOSURE DEFENSE, ACTION TO ENJOIN TRUSTEE'S SALE, AND LOSS MITIGATION PACKAGE

PART I — PRE-DEFENSE INTAKE CHECKLIST

Document Collection

☐ Note and all endorsements
☐ Deed of Trust and all recorded assignments
☐ Substitution of Trustee
☐ Recorded Notice of Trustee's Sale (§ 33-808)
☐ All loss mitigation correspondence
☐ Complete payment history
☐ Servicing transfer notices
☐ Tax returns, paystubs, bank statements (2 yrs)
☐ Hardship documentation
☐ Credit reports (3 bureaus)

Defense Issue Spotter

☐ Was Notice of Trustee's Sale recorded ≥ 90 days before sale? § 33-808
☐ Did Notice contain all required statutory contents (§ 33-808(C))?
☐ Was Notice sent to all entitled parties (§ 33-809)?
☐ Is the property protected by anti-deficiency (§ 33-814(G) trustee's sale; § 33-729 purchase money)?
☐ Was Substitute Trustee properly appointed and the appointment recorded?
☐ Was the trustee qualified under § 33-803 (Arizona attorney, financial institution, escrow agent, etc.)?
☐ Did servicer comply with RESPA Reg X loss mitigation?
☐ Did servicer fail to honor a Trial Period Plan or modification?
☐ Are there pre-sale defenses under Steinberger v. McVey?
☐ Is the trustor an active-duty servicemember (SCRA)?
☐ Anti-deficiency waiver in loan documents void as against public policy? Parkway

PART II — COMPLAINT FOR INJUNCTION TO ENJOIN TRUSTEE'S SALE

(A.R.S. § 33-811; A.R.S. § 12-1801) — SUPERIOR COURT

IN THE SUPERIOR COURT OF THE STATE OF ARIZONA
IN AND FOR THE COUNTY OF [________________]
Case No. CV[__________]

VERIFIED COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF AND DAMAGES

Plaintiffs, by counsel, allege:

PARTIES, JURISDICTION, VENUE

1. Plaintiffs reside in [________] County, Arizona.
2. The Property is located at [________________________________] in [________] County.
3. Defendant [Beneficiary], [Servicer], [Trustee] are involved with the loan.
4. Jurisdiction is proper under Ariz. Const. Art. VI, § 14 and A.R.S. §§ 12-123, 12-1801 (injunctive relief).
5. Venue is proper under A.R.S. § 12-401.

FACTUAL ALLEGATIONS

6. On [__/__/____], Plaintiffs executed a Note in the amount of $[________] and a Deed of Trust to secure the same.
7. The Deed of Trust was recorded in the official records of [________] County, Arizona, at [Instrument No. ____ / Book ____ / Page ____].
8. The Property is owner-occupied, ≤ 2.5 acres, and improved with a single [one-family / two-family] dwelling, qualifying for anti-deficiency protection under A.R.S. § 33-814(G).
9. The loan [is / is not] a purchase money loan under A.R.S. § 33-729.
10. On [__/__/____], a Notice of Trustee's Sale was recorded scheduling sale for [__/__/____].
11. [Detail defects: NOTS insufficient under § 33-808(C); improper appointment of substitute trustee; unqualified trustee; defective service under § 33-809; loss mitigation violations; breach of TPP; misapplied payments.]

COUNT I — INJUNCTIVE RELIEF (A.R.S. § 33-811; A.R.S. § 12-1801)

12. A.R.S. § 33-811(C) provides that any defense or objection to the sale not raised by injunction before the sale is waived. Plaintiffs therefore must obtain an injunction before [__/__/____] at 5:00 p.m.

13. Plaintiffs have meritorious grounds including:
    (a) Defective Notice of Trustee's Sale;
    (b) Improperly appointed or unqualified Substitute Trustee;
    (c) Servicer's violation of RESPA Reg X (dual tracking; failure to evaluate timely);
    (d) Breach of Trial Period Plan / loan modification (Steinberger v. McVey);
    (e) Misapplied payments and improper fees;
    (f) Anti-deficiency public policy violation (if waiver attempted).

14. Plaintiffs will suffer irreparable harm: loss of the family home.

15. Balance of equities and public interest favor injunction.

COUNT II — DECLARATORY JUDGMENT (A.R.S. § 12-1831)

16. An actual controversy exists. Plaintiffs request declaration that (a) the NOTS is void; (b) Defendants are not entitled to foreclose; (c) the Substitute Trustee is improperly appointed; (d) any contractual waiver of anti-deficiency protection is void as against public policy. Parkway Bank & Trust Co. v. Zivkovic.

COUNT III — VIOLATION OF RESPA AND REGULATION X

17. [Allege complete loss mitigation application; failure to acknowledge/evaluate; dual tracking; statutory damages under 12 U.S.C. § 2605(f).]

COUNT IV — BREACH OF CONTRACT (LOAN MODIFICATION / TPP)

18. Plaintiffs entered into a Trial Period Plan / loan modification, performed all conditions, and Defendants wrongfully refused conversion / honoring. Steinberger v. McVey.

COUNT V — VIOLATION OF FDCPA (15 U.S.C. § 1692e, § 1692f)

19. [False, deceptive, misleading representations as to amount due, legal status of debt.]

COUNT VI — VIOLATION OF FCRA (15 U.S.C. § 1681s-2(b))

20. [Inaccurate furnishing; failure to investigate after dispute notice.]

COUNT VII — CONSUMER FRAUD (A.R.S. § 44-1521 et seq.)

21. [Deception, fraud, false promise in connection with sale of merchandise (loan services) within scope of Lerner v. DMB Realty.]

COUNT VIII — NEGLIGENT PERFORMANCE OF UNDERTAKING (Steinberger)

22. By undertaking to consider Plaintiffs' loss mitigation request, Defendants assumed a duty of reasonable care which was breached. Steinberger v. McVey.

COUNT IX — WRONGFUL FORECLOSURE / BREACH OF DEED OF TRUST

23. [Defendants failed to comply with paragraph 22 / Notice of Default and conditions precedent in the Deed of Trust.]

PRAYER FOR RELIEF

(a) Temporary Restraining Order, Preliminary Injunction, and Permanent Injunction restraining the trustee's sale;
(b) Declaratory judgment;
(c) Actual, statutory, and treble damages;
(d) Reasonable attorneys' fees and costs under A.R.S. § 12-341.01, 12 U.S.C. § 2605(f), 15 U.S.C. § 1692k, A.R.S. § 12-349;
(e) Such other relief as the Court deems just.

JURY TRIAL DEMANDED on all counts so triable.

VERIFICATION

I, [________________], declare under penalty of perjury under the laws of the State of Arizona that the foregoing is true and correct.

Executed [__/__/____] at [________], Arizona.
________________________________ [Plaintiff]

Counsel:
[Attorney Name], AZ State Bar # [______]
[Firm], [Address], [Phone], [Email]

PART III — APPLICATION FOR TRO AND PRELIMINARY INJUNCTION

Pursuant to Rule 65 of the Arizona Rules of Civil Procedure, Plaintiffs apply ex parte for a Temporary Restraining Order and noticed Preliminary Injunction enjoining the trustee's sale set for [__/__/____].

Bond: Plaintiffs request the bond be set at a nominal amount given hardship and merits. The Court has discretion under Rule 65(c) to set bond in any amount deemed proper.

Required Elements (Rule 65; Shoen v. Shoen, 167 Ariz. 58 (App. 1990)):

1. Strong likelihood of success on the merits;
2. Possibility of irreparable injury;
3. Balance of hardships favors movant;
4. Public interest served.

Proposed Order:

• Defendants and the Trustee, their officers, agents, and employees are restrained from conducting any trustee's sale of the Property;
• Notice to Trustee to be given by [time/date];
• Bond set at $[________];
• OSC hearing set for [__/__/____].

PART IV — RESPA QUALIFIED WRITTEN REQUEST

[Standard QWR/NOE/RFI under 12 U.S.C. § 2605(e) and 12 C.F.R. §§ 1024.35–.36 — itemize errors and information requested as in template Part IV of VA package.]

PART V — LOSS MITIGATION APPLICATION (FORM 710 / RMA)

Monthly Income — wages [$], self-emp [$], benefits [$], rental [$], other [$_], Total [$_]

Monthly Expenses — mortgage, second/HELOC, taxes, insurance, HOA, utilities, food, transp, medical, childcare, debts, other. Total [$_]

Assets — checking [$], savings [$], retirement [$], other RE [$], other [$_]

Hardship

☐ Unemployment ☐ Reduced income ☐ Death ☐ Disability
☐ Illness ☐ Divorce ☐ Escrow shortage ☐ Disaster
☐ Job transfer ☐ Business failure ☐ Other: [_______________]

Hardship Narrative

[__________________________________________________________
__________________________________________________________]

Workout Requested

☐ Modification ☐ Repayment plan ☐ Forbearance
☐ Short sale ☐ Deed in lieu ☐ Reinstatement
☐ Other: [_______________]

Documents Submitted

☐ Form 710 / RMA signed
☐ IRS 4506-C
☐ 2 yrs tax returns
☐ 2 mos paystubs
☐ 2 mos bank statements
☐ Benefits award letters
☐ Hardship letter
☐ Utility bill (occupancy)

Certification (penalty of perjury):
________________________________ Date: [__/__/____]
________________________________ Date: [__/__/____]

PART VI — DEMAND TO CANCEL OR POSTPONE TRUSTEE'S SALE

[Date]

[Servicer / Trustee]

VIA CERTIFIED MAIL, RRR AND EMAIL

Re: Demand for Postponement / Cancellation of Trustee's Sale
Loan No. [________] | Property [________] | Sale Date [__/__/____]

Pursuant to 12 C.F.R. § 1024.41(g), the Servicer may not move for foreclosure sale or conduct a foreclosure sale if a complete loss mitigation application is submitted more than 37 days before the sale. The enclosed complete application is submitted on [__/__/____].

Demand:
(a) Cancel or postpone the trustee's sale pursuant to A.R.S. § 33-810;
(b) Acknowledge receipt within 5 business days;
(c) Provide single point of contact pursuant to 12 C.F.R. § 1024.40;
(d) Evaluate for ALL options.

Failure to comply will result in litigation for injunctive relief under A.R.S. § 33-811 and damages under RESPA, FDCPA, and ACFA.

Sincerely,
[Counsel Name, Esq.]

PART VII — DISCOVERY DEMANDS (POST-FILING)

INTERROGATORIES

1. Identify the actual holder of the Note on the date of the Notice of Trustee's Sale.
2. Identify each Substitute Trustee and the date the appointment was recorded.
3. State whether the Trustee is qualified under A.R.S. § 33-803 and identify the basis for qualification.
4. Describe the chain of Note endorsements and Deed of Trust assignments.
5. Identify all loss mitigation applications received and the disposition of each.
6. Itemize all fees, charges, advances, and force-placed insurance assessments.
7. Identify all Single Points of Contact assigned pursuant to 12 C.F.R. § 1024.40.
8. Describe communications between Servicer and Trustee regarding postponement requests.

REQUESTS FOR PRODUCTION

☐ Original Note (for inspection)
☐ All endorsements/allonges
☐ All recorded assignments
☐ Substitution of Trustee (with recording)
☐ Recorded Notice of Trustee's Sale and mailing affidavits
☐ Pooling and Servicing Agreement (if securitized)
☐ Servicing notes
☐ All loss mitigation correspondence
☐ Trial Period Plan and related documents
☐ Investor / insurer guidelines

REQUESTS FOR ADMISSION

1. Admit that Defendant Beneficiary did not have physical possession of the Note on the date the NOTS was recorded.
2. Admit that the Trustee did not meet the qualifications of A.R.S. § 33-803 on the date of appointment.
3. Admit that Plaintiffs submitted a complete loss mitigation application on [__/__/____].

PART VIII — BANKRUPTCY REFERRAL

Pre-Petition Checklist

☐ Means test (B 122)
☐ Confirm Plan cures within 60 months
☐ Verify automatic stay applies (no recent dismissals)
☐ Arizona homestead exemption: $400,000 per A.R.S. § 33-1101 (annually adjusted)
☐ Refer to [________________], Esq., Bankruptcy Counsel

PART IX — ANTI-DEFICIENCY ANALYSIS

Note: Contractual waivers of § 33-814(G) by individual borrowers are void as against public policy. Parkway Bank & Trust Co. v. Zivkovic, 232 Ariz. 286 (App. 2013).

PART X — KEY DEADLINES AND TIMELINE

SOURCES AND REFERENCES

• A.R.S. § 33-807: https://www.azleg.gov/ars/33/00807.htm
• A.R.S. § 33-808 (Notice of Trustee's Sale)
• A.R.S. § 33-811 (Waiver; trustee's deed)
• A.R.S. § 33-814 (Anti-deficiency): https://www.azleg.gov/ars/33/00814.htm
• Hogan v. Wash. Mut. Bank, N.A., 230 Ariz. 584 (2012)
• Steinberger v. McVey, 234 Ariz. 125 (App. 2014)
• Parkway Bank & Trust Co. v. Zivkovic, 232 Ariz. 286 (App. 2013)
• Mid Kan. Fed. Sav. & Loan v. Dynamic Dev. Corp., 167 Ariz. 122 (1991)
• 12 C.F.R. § 1024 (RESPA Reg X)
• HUD-Approved Counselors: https://www.hud.gov/findacounselor
• Arizona Foreclosure Help Line: 1-877-448-1211 (Foreclosure Prevention Network)

This package is a template for educational use by licensed Arizona counsel. The § 33-811(C) waiver deadline is unforgiving — file the injunction action well before 5 p.m. on the last business day before the scheduled sale. Customize every section to the specific facts.