Opinion ID: 867575
Heading Depth: 3
Heading Rank: 1

Heading: Chilled market

Text: ¶ 20 We are presented with no evidence or data indicating that prices paid at sales made under a power of sale bring an appreciably higher percentage of fair market value than prices bid at judicial foreclosure sales. [6] To be sure, neither Sweetheart nor ATA made this argument, but it is perhaps the only compelling policy reason to support the loss of all judicial oversight. See Bauman v. Day, 892 P.2d 817, 824 n. 8 (Alaska 1995). Moreover, we have been presented with no data indicating that the traditional judicial foreclosure market has been disrupted by existing judicial oversight to prevent grossly inadequate prices, and such a result is not self-evident. In fact, without apparent adverse effect on the market, even sales under deeds of trust have been set aside when prices have been grossly inadequate and there was also absence of strict statutory compliance. ¶ 21 For example, the Washington Supreme Court voided a trustee's sale when it found the trustee had breached fiduciary duties by ignoring a suit by the grantor and had sold, for less than $12,000, a home in which the grantor had equity of at least $100,000. Cox v. Helenius, 103 Wash.2d 383, 693 P.2d 683 (1985). A federal court voided the sale of property appraised at $240,000 after it had been incorrectly described in the notice and was purchased at the foreclosure sale for less than $15,000, only to be sold seventeen days later for $130,000. In re Worcester, 811 F.2d 1224 (9th Cir.1987). There is no reason to expect a rule that also permits courts of equity to overturn grossly inadequate deed of trust sales would disrupt that market, and so far as we know, the cases just cited have not destroyed or impaired the foreclosure industry on the west coast. ¶ 22 Indeed, purchasers continue to come forward, making deed of trust purchases without certain knowledge that the trustee has fully complied with the statutory procedural obligations and thus take a risk that the sale may be set aside for that reason. For example, there was no apparent flight from deed of trust sales after we vacated such a sale when we found a ninety-day statutory notice of sale did not negate the additional thirty-day notice required in the deed of trust itself. Schaeffer v. Chapman, 176 Ariz. 326, 861 P.2d 611 (1993). ¶ 23 Perhaps this is because most purchasers believe, as we do, that only the smallest minority of deed of trust sales are conducted without statutory compliance, just as we also believe that most purchasers will assume only the smallest number of deed of trust sales are concluded at a price that could shock the conscience of the court because of gross inadequacy. That said, we think it just as likely that the possibility of judicial oversight on the ground of gross inadequacy will result in higher prices. If so, we think this will serve rather than impair the public interest.