Opinion ID: 867575
Heading Depth: 2
Heading Rank: 3

Heading: Issues and positions

Text: ¶ 14 Krohn urges the courts to set aside the sale of her house on the grounds that the winning bid was grossly inadequate, and she urges adoption of RESTATEMENT § 8.3. Sweetheart urges approval of the sale, arguing its position as a bona fide purchaser and asserting there is no express statutory provision for overturning a trustee's sale based on price. ¶ 15 An amicus brief filed in support of Sweetheart urges us to take a comprehensive view. Emphasizing that its member trustees are from Arizona, California, Texas, and Washington, the Arizona Trustee Association (ATA) informs us that the proper resolution of this issue is crucial to the continued viability of the foreclosure industry in Arizona. ¶ 16 ATA describes its active members as individuals and entities engaged in all aspects of non-judicial foreclosures, including the preparation of title reports, the posting and publishing of notices, the legal analyses, the appraisals and valuation, and the conduct of trustee's sales at public auctions. It defines its twin purposes as educating its members and ensuring fairness and consistency in the trustee's sale process. Their interest therefore derives from reliance on the statutory scheme and security in the knowledge that if the statutory scheme is followed and strictly enforced, the sale will be valid. This appreciation for the orderliness of the process is to be commended and preserved, but there must also be recognition that those interests are not co-extensive with the interests of the other parties. ¶ 17 The mortgage banking and lending industry is of great importance to our economy, but lenders are primarily and vitally concerned with getting their money back with the agreed upon interest payments. The health of their industry depends on repayment, not on foreclosure. Borrowers are justifiably concerned with legitimate protection against inequitable loss of their property if there is a foreclosure. To the extent that judicial oversight to prevent gross inadequacy of bidding at trustee's sales may actually increase prices realized, both lenders and borrowers would benefit. We doubt ATA's thoughtful brief meant to suggest there is such a thing as a foreclosure industry that opposes either the interests of lenders or borrowers. There are, of course, those waiting for opportunities based on individual misfortune, and we believe this makes it even more important that courts of equity are open to assure debtors receive not only procedural but fundamental fairness. Windfall profits, like those reaped by bidders paying grossly inadequate prices at foreclosure sales, do not serve the public interest and do no more than legally enrich speculators. We doubt this serves the legitimate interests of trustees any more than it serves the legitimate interests of lenders or borrowers.