Sylvester Moore-Eal, welcome to THCTrust.org. Once again, to follow along, create a subscription with the website. I think it's $225 for a year or indefinitely or $32 per month and that gives you access to all of the templates that I create, that I go over, that I'll be talking about today.
We're continuing along. with the study of the banker's draft. We already talked about preparing a banker's draft and tendering it for payment with some IRS 1099 reporting on the transaction, the notary presentment, and the notary protest. Even when you do all these things, there's no guarantee that they're going to honor or accept that. So we have to always be moving forward, always have to.
That's the way I look at it with these processes. Especially if you're trying to discharge something like a mortgage or something to that effect. You have to always be continuously perfecting your records, which is evidence, and also moving forward.
So we're going to look at what can we do now that we have the notary protest, which is the actual evidence of the discharge. We issued all the 1099-Cs, and they're still not honoring it. They're still not paying attention to anything.
What can we do? Alright, so you're at the website. First, create a free account right here. And there's some free materials on the website, but to follow along with what we're doing today, you would have to have the subscription to actually see the templates. So I'm going to go ahead and log in as TexMasson.
Listen, cat, I got you. Sorry, this cat is bugging me because it wants me to feed it. but it's got a little bit more time to wait so we're going to go under advanced topics here and then go into this last menu that says discharging debt click that menu and then we come down here and we're specifically under here discharging with the iboe or draft last updated march 10 2024 that's today so you click this link And these are the videos where we talked about the draft, the 1099 reporting, the notary protest, and all of those things.
Now I put these templates here. These templates, we're going to look at everything we've covered so far with the exception of this document that you see on the screen here. Notice of substitution and appointment of successor.
I'm going to explain the logic behind using this document in your discharge of a mortgage. process per se. That's what we're kind of talking about in this hypothetical situation. But before that, we looked at the notary protest.
We already covered up to this point, but I don't think you've seen the executed instrument. So it looks something like this. I use the online notary.
Actually, no, I did not for the protest. I couldn't use an online notary. So that's the notary protest that occurred. That's the actual banker's draft that was created and presented for payment. I used the online notary for this.
Very new technology. I've never done anything like that before. But I like the idea of doing it because this instrument can be honored at any time.
This electronic version of it is basically an original, right? So then there's a payoff statement and then the 1099 reporting, what we talked about. So all these records... I believe would constitute evidence because government records are evidence and these are recipient copies of government forms, records that are in government databases.
So that may, I believe that qualifies as evidence. The notary protest definitely qualifies as evidence. And also, when I communicate with them, there's other letters where I've communicated with them.
I've started making sure that all of my communications with them is concise to the point. And I try to keep it to a page, never more than two pages. And I express every notice or communication with them in the form of an affidavit.
Because I know that, you know, affidavits, unrebutted affidavits may qualify as evidence also. And if we have to ever end up in court to enforce this discharge, I want nothing but a record full of evidence. I don't want any hearsay because I really don't want to have to speak in their courts.
And really, I never even want to end up in court. These private records, if anything, would be tendered to the judge and camera before I end up in their court. At least that's what I'm thinking. Because, well, they'll only be intended in camera as an answer or a response to a legal action someone else is trying to take. But if I have to preemptively take a legal action with my records, then I don't think that legal action can start off in a judge's chambers, per se.
But hey, I'm not going to say it can't. I highly doubt it can, but I never even looked into that. Anyway, so that I don't just ramble on. What we're looking at today is a notice of substitution and appointment of successor trustee, right? The idea of this document, it's just a notice.
You can look up what a notice is. A notice is different from an affidavit, but a notice might be given by an affidavit. So this was a notice, and I jumped the gun on this notice a little bit, but it's not a problem.
So first let me explain this. Most people with mortgages that are attempting or trying to discharge the mortgage, you have to really pay attention to all the different parties that's involved. Usually the person who's billing you is either a servicer or they are the beneficiary under the deed of trust or what they also call the security deed or the mortgage deed.
Um, so you're paying that person, they're billing you, and that's how those transactions work. However, that person usually is not the trustee. Remember, a security deed or a deed of trust is actually, or a security deed, a mortgage is still a deed.
It's a trust instrument. And as a result of that, there is a trustee who's ultimately responsible for administering and carrying out and fulfilling our... discharging the obligations of the trust instrument or discharging it when all the performance or payments have been made, etc. So I'm stating that because anybody that's dealing with discharging their mortgage or researching this, you have to pay attention to the deed. Go read the deed and find out who the trustee is because he's never going to send you any email.
They're never going to send you any information. And there may be potential remedy that has to be. exercise with the trustee and you would never know who the trustee is because he has no reason to communicate with you, right? And of course, don't think that he has to communicate with you, right?
This is an out-of-the-box type of remedy. So he's not going to be expecting to hear from you, right? When I contacted the trustee, as we'll look through in here, in this hypothetical situation, situation, let's just call it that, you will notice that I introduced myself to the extent that on the front line, it says Sylvester Moore, trustor. I would make sure that the name as used, if you're contacting a trustee, is the same as it is used in the deed that you're contacting him in reference to. In this instance, it's a security deed or a mortgage deed or whatever.
The interesting thing is, I think that probably 12 years ago... I don't believe it was so blatant. And maybe it was.
Maybe we just didn't understand trust technology then. But now when you look at Indeed, it's clear. They say, you're the trustor. That person is the trustee.
This person is the beneficiary. Where before with these mortgage deeds years ago, it wasn't really so clearly spelled out. So I think they're kind of cleaning up things, too. Or then again, I could be just completely wrong.
It could be because now, you know, after all these years in the game, we have more clarity and understanding of what we're looking at. Or at least I do. So it could be that, too. But either way, this usually is going to be an irrevocable trust. And that has usually presented a barrier in people's mind that it's kind of hard to get around.
How can I resolve this if this is an irrevocable trust? Well, here's my thought process on that. And this is the angles that you're going to see we're taking with our notices.
Just because a trust is irrevocable does not necessarily mean that the trustee cannot be substituted or appointed or succeeded. Absolutely, it has nothing to do with that. So whether a trust is revocable or irrevocable, it doesn't say that the trustee cannot be substituted. That has nothing to do with the revocability or the irrevocability of the trust, according to my understanding. This is not legal advice or any of that stuff.
If you have something different on that, you can let me know. What if he's not? incapacitated, an infant, or lost at sea.
And even though he's the trustor of the trust, he's alive and he still understands his intent. So even though he's not the beneficiary of the trust, he's the trustor of the trust. And if he contacts the trustee to say, I have firsthand knowledge and reason to believe and evidence to support that the obligation created by that deed has been satisfied and therefore... That deed is supposed to be settled. Here's the evidence.
He gives it to the trustee. He expects the trustee to perform as the trustee would. But maybe that might be his perspective and opinion. And based on that opinion, he may substitute that trustee or remove that trustee because he can't revoke the trust.
So he may take a legal action to do just that. Whether he had the right to do it or not, that might be a matter for court to decide or maybe it's not. Maybe I'm just correct in the way that I think about it, right? Maybe I'm wrong.
Somebody else has a different opinion on whether the trustor, based off of some reason, whether it's a breach of a fiduciary duty, failure to account, failure to release a security interest, failure to exercise operating good faith, in this type of irrevocable trust, can the trustor substitute an appointed trustee? Well, in this fight, in this battle, we absolutely have to. We can talk about whether we were allowed to do it later.
But typically before you do such a substitution or appointment, you're going to give them notice of the reason and the grounds upon why it's going to happen. That's why I said I jumped the gun because I didn't dwell so much on the notice. I did, but I should have done it a different way. in hindsight, but this is still great.
It's excellent. It's usable and you'll understand it as we go through it. So why, so notice I called this a notice of substitution and appointment of successor, but let's read how this actually reads.
I am the trustor of the deed cross-referenced at cross-referenced as deed of trust and assignment of rents recorded in Maricopa County is document number, whatever instrument number, whatever encumbering real property identified as one, two, three, easy street. etc. I have firsthand knowledge that the obligation secured by the deed is paid in full and satisfied to the extent of $600,000, which includes taxes.
As evidenced in the notary protest of March 14th, 2024 and the related 1099 tax returns, a copy of which are attached and incorporated as enclosure five. Then I put, you know, five pages. Blank. CFO for blank has failed to account for the payment and has not responded to my request for satisfaction and release for mortgage sent on March 21st, 2024. I hereby request and compel the trustee, Ronald B. Herb, to record the release or satisfaction of deed as required within 30 days under Arizona law and in accordance with Section 27 of the cross-reference deed. Wherein it reads, upon payment of all sums secured by this deed, lenders shall release the deed without charge to the borrower.
Notwithstanding, the beneficiary submits a notice by affidavit with an accounting alleging that the deed of trust continues to secure an obligation. Failure to record the release or satisfaction before May 7th, 2024 shall be deemed an automatic execution of my right to Appoint blank title company as the successor, your successor, under the deed, and from which time upon the recording of this affidavit, all title power and duties conferred upon the trustee shall succeed to the successor, including the duties set forth in Section E of Arizona Revised Statute 33-707. That revised statute deals with the requirement to file a satisfaction. instrument within 30 days of receiving the final payment or satisfaction.
All statements and documents in response must be certified and or sworn to under penalty of perjury as to its veracity or is otherwise not credible and not considered to be a response, excuse me, and considered to be, excuse me, otherwise is not credible and considered to be a response in bad faith. because they're required to respond in good faith not to conceal mislead and disclose so I was trying to be unique here, maybe to a little bit of a fault, but this is still perfect. There's nothing wrong with it. Really, I should have made a notice first. I shouldn't have called this notice of substitution and appointment of successor.
However, this is an affidavit, as you see is the second title. And with this affidavit, I did all of those things. I gave him a notice of the appointment of the successor trustee, which I named this title company.
This is actually the title insurance company. I named them the successor. And I said the automatic execution of my right to substitute to appoint or substitute a trustee would execute on May 7th if this standing trustee fails to record a satisfaction or release based off of the evidence records that I have firsthand knowledge of that I have provided him a copy of. I also, in a separate document that you don't see here, requested that the trustee provide me an accounting, the type of accounting that it seems he would be provided to give me under UCC Article 9, Section 210. We'll get to that in the due time. So the idea is that this notice was to be a self- executing deed or self-acknowledging deed.
Let's call it that. Meaning that this notice is to tell you that this account has been satisfied, trustee. So you have to get on the ball and do the things that you're required to do under Arizona revised statute, et cetera, et cetera, or whatever the statute is where you're at that says what they're required to do when they receive the final payment, how they have to release the security interest. So I'm kind of just basically giving them a notice.
Hey. I'm not trying to interfere here, but this is what's supposed to be done. Now, I gave him this notice of what I intended to do if it wasn't done by that certain time that I intended to remove and substitute him as an automatic right.
And the interesting thing about this notice, which will give you a little blowback, is that although this is. A letter says from me to the trustee, copy to the beneficiary, copy to the successor trustee who's been appointed by this affidavit. Remember, this is all one affidavit. It's a notice and it's an affidavit. Since it's an affidavit, it's coming from me.
It's going to the trustee, copy to the beneficiary, copy to the successor trustee, because they all have to know what's being declared in this affidavit because it affects all of them. Excuse me. Right.
However, I set this affidavit up so that it would be recordable as a deed in the county recorder's office itself. That's why I said I am the trustor of the deed cross-referenced as. Now I'm naming the mortgage document because I went into the recording requirements of the county. And I said if I need to record a substitution or an appointment of trustee. or any document for that matter on the record that affects the security deed, then I need to know what the requirements are.
First requirements, you have to cross-reference it correctly. So you go in there and you make sure that you meet all those requirements. But outside of that, this is just an affidavit because if there's something wrong with it, all of these parties who received it, they can respond by affidavit or they can remain silent and consent. So my idea here is to get this on the record.
So now, because what you will notice is anytime a trustee forecloses under a deed, he does so in the court executing a power that he holds based off of his appointment under the deed. This notarized record, notice of substitution and appointment of successor trustee from the trustor. to the trustee will challenge that, right?
Especially when it's recorded in the record, because now he can't reference his authorizing instrument without the cross-reference document that's going to automatically come up that says, hey, you've been removed and the successor has been appointed, right? Now he may say, but yeah, he didn't have the right to do that, or he didn't have the lawful right. I mean, if he felt that way, he should tell you now, right?
He can respond by affidavit or some other certified record showing why you don't have the legal capacity to substitute or appoint a successor trustee in his stead. Now, the tricky part is if he like they usually ignore everything. If they ignore this successor appointment, are they still going to administer and do trust business under a trust when the trust store for that trust says you have been removed? Or are they going to pump the brakes and say, hey, this is getting too thick before I do anything. I need to go sue or take this up in the court to get a determination.
That's what I think they should do, but we really never can predict what people are going to do out here. So, you know, who knows? Let's see.
So the idea is this affidavit that has done all of those things. I have. See, let's let's look at him one more time. Number four, I hereby request and compel the trustee to record the release or satisfaction of deed as required within 30 days under Arizona law. And in accordance with Section 27 of the cross-reference deed, usually you're going to find in a cross-reference deed where they say the lender has to release the security interest once they receive the final payment or something to that effect.
So that's why I'm saying, hey, trustee, I need you to perform here. Here's all the records that this has been done. Right.
And then I also told him failure to record the release or satisfaction before a certain date shall be deemed an automatic execution of my right to appoint. Then I named the successor trustee, which is the title insurance company, as the successor. I have the right to, I've appointed them as the successor by this same statement.
But I also said they are going, you know, that the trusteeship is going to succeed to the successor on May 7th if you don't release the security interest because that would be a breach. the trust or breach of your fiduciary obligation under the trust. So the trust store in essence is beginning to act as a sort of a guardian in the sense. Now also the last thing I want to speak out on on this is why in this instance did I appoint the title insurance company as the successor trustee because in my research the The lender or whoever's billing you, the servicer, excuse me, they can receive that final payment and then release the mortgage.
Or the trustee under the deed can also do it. So in this case, servicers are, you know, the person I tendered the payment to, they're already in default. So now I've presented this, the records to the trustee because it's his duty.
And quite frankly, I'll tell you, this is bad. after the fact, but he's already in default, right? So if you research, you may find out in wherever, however they do business in the state that you're in, that the title company, the title insurance company, the title insurance company is also one of the few parties that can release.
a mortgage or they can satisfy the lien on the mortgage. And consequently, it has been said, and I do believe that when a trustee or a lender forecloses on a trustor or a so-called borrower, that they actually go to the title insurance company who insured the title to collect on that insurance policy. So you're looking at various pieces of collateral, which is the real property itself is collateral. The actual promissory note is an investment security.
That's collateral. And then there's an insurance policy, which is the title insurance. And that's collateral. So it looks like all these three things are collateral that secure the obligation of the mortgage.
But anyway, if you look at it, and that is the case. You know. Most of the states I looked at, you'll find out that the title, and the reason why this is the case is because what happens if your lender or the trustee completely goes out of business and they're nowhere to be found? Well, when there's no other way to settle the title, the title insurance company needs to be able to go in there and clear the title on the record so that title can be insured and that they can continue to sell the property in commerce as they like to do. So the point that I'm making is, Actually, it appears that there's an adverse interest.
between the title insurance holder and the so-called lender, right? Because they want to foreclose and collect all the collateral. They want to collect on the insurance policy, but I want to remove them from the trusteeship and appoint the title insurance company as the trustee who's now responsible for satisfying the deed.
And I want to give them... all my evidence records to prove the transaction that has been satisfied. And I want them to ask the same questions that I've been asking the trustee and the so-called lender. Are we not done yet?
Or is there still an outstanding obligation? I want to put it on the title company because now the title company can be the one, they can act as the judge. They can choose to ignore all of the evidence and potentially be held liable. for breach of trust, for failing to satisfy A, B, and C when they had the evidence, or they can communicate with the bank and lender and say, hey, you're going to have to show me some evidence that this guy has not satisfied the obligation because the records I see says it is and we don't see anything here. Either way, I want to remove myself from the controversy and let them duke it out.
And depending on... How they handle it, either it'll be handled or, you know, the next line of thinking that I see is I'd have to do is I'd have to sue the title company, which is the successor trustee. He who holds the title insurance for a breach of trust in a special court of equity or fraud. I have to.
There's multiple equitable claims, but it will it will start with me suing the successor trustee and the trustee suing the trustees for breach of trust. the trust or that's what I see anyway we're walking it down we're walking it down let me know what you think about it please make a comment add your one or two cents in there don't add three cents because I can't do anything with three cents but add one or two cents now peace and love you know by the way start your subscription on THC trust org it helps support the channel it gives me the time to do what I'm doing today but uh I'm available, but it's just me. So if you do your $32 monthly subscription or your $225 yearly subscription, notice I'm around. You know what I'm saying?
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