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aBOUT 50% OF FANNIE MAE NOTICES OF SALES ARE DEFUNCT - BECAUSE THEY REFER TO "SELLING" THE PROPERTY WITHIN A 3 HOUR WINDOW RATHER THAN REFERRING TO "COMMENCING THE AUCTION" WITHIN A 3 HOUR WINDOW.
We can invalidate the Notice of Sale because the Trustee's actions will be a breach of fiduciary duties owed to the Borrower - to use all available time during the auction, in the Trustee's discretion, to ensure maximizing the benefits to Borrower from the sale.
The "Notice of Sale" of the property expressly states that the Trustee will "sell" the property no later than three (3) hours after the time stated in the Notice. The time stated is 10:00 AM. This means that the Trustee is stating that the Trustee will not complete the sale later than 12:59 PM.
I should explain that the Texas statute requires that the foreclosure sale must "start" no later than three hours after the time stated in the Notice. Trustee's have clearly recognized discretion to continue the auction process past three (3) hours of the Notice time, and Trustee's must reserve their business judgment to determine the use of this time prior to consummating the passage of title.
But this Trustee has chosen to apply a stricter standard that requires the Trustee to "SELL" the property no later than three hours after 10 AM. All Texas case law interprets that the literal "SALE" of the property occurs at the time that a Trustee's Deed is conveyed to a highest-bid Purchaser in exchange for monetary consideration.
"In this case, the notice of sale was signed by Key, describes the property, and states that the property will be sold to the highest bidder for cash. The deed of trust also dictates when, where, and upon what terms the property must be sold. It further requires Key to deliver a trustee's deed to the highest bidder. These, along with Pierce's tendered $ 55,069, provide all essential terms of the contract and satisfies the statute of frauds." Key v. Pierce, 8 S.W.3d 704, 708 (Tex. App.—Fort Worth 1999, pet. denied).
In effect, this Trustee is excluding additional time that would normally, and REGULARLY, be used at auctions by the Trustee in the Trustee's business judgment, including (1) additional time after the highest bid to allow for retrieval of money and the execution of the Trustee's Deed; (2) in situations in which the Purchaser does not properly present money, then to conduct a SECOND AUCTION that same day to other interested purchasers; (2) additional time for unforeseen delays which otherwise prohibit maximized sale prices, including the arrivals of delayed bidders during the auction process.
This Trustee has decided that the Trustee will (1) auction the property to the highest bidder; (2) wait for monetary consideration; and (3) perform the passage of title by Deed all in less time than required by the statute. This Trustee has fiduciary duties to the Borrower to ensure the the sale is "fair", and the Trustee's pre-determination of the removal or exclusion of available time in sales proceedings is a prejudice to the rights of Borrower.
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