Law Office of Ronald Ryan, P.C.

Licensed in Arizona and Texas Ronald Ryan Attorney at Law 1413 E. Hedrick Drive Tucson, Arizona 85719 phone: (520)298-3333 fax: (520)743-1020 ronryanlaw@cox.net

September 20, 2011 Mr. Thomas C. Horne Attorney General Assistant Attorneys General Public Advocacy Division 1275 W. Washington Phoenix, Arizona 85007-2997 sent via (602)542-4377 (fax) and email consumer@azag.gov Attorney for Amicus Curiae PLEASE FORWARD A COPY TO Carolyn R. Matthews, Asst AZ Atty Gen Dena R. Epstein, Asst AZ Atty Gen Donnelly A. Dybus, Asst AZ Atty Gen

RE:

Brief of Amicus Curiae State of Arizona, Constituting the Opinion of the Arizona Attorney General, to the Arizona Supreme Court in Vasquez Deutsche Bank National Trust Company, as Trustee for Saxon Asset Securities Trust 2005-3; Saxon Mortgage, Inc. ("DBNTC"), No. CV 11-0091-CQ (Ariz. S. Ct. 2011), Certified Question from Bankruptcy Case, In re Vasquez, 4:08-bk-15510-EWH (Bky. D. Ariz Tucson)

Dear Mr. Horne and other involved Assistant Attorneys General: I have been following the Vasquez vs. Deutsche Bank National Trust Company, as Trustee for Saxon Asset Securities Trust 2005-3, (DBNTC) et al;, No. CV 11-0091-CQ (Ariz. S. Ct. 2011), Certified Question from Bankruptcy Case, In re Vasquez, 4:08-bk-15510-EWH (Bky. D. Ariz Tucson). I recently faxed and emailed you a letter summarizing the UCC PEB Report and UCC Art 9 Application to the transfer of mortgages incident to the sale of negotiable and non-negotiable promissory notes.

Here is my updated rendition of Article 9 applicable to sales of notes, and the only statutory and definitive authority for transferring mortgages incident to the sale of negotiable and non-negotiable promissory notes, and it includes recording requirements. I also emailed Word and Adobe versions of the attached. This has been redone and is much better than the prior version. There were errors in my prior version. I will be at the oral argument. Good luck.

Cordially yours, /s/ Ronald Ryan Ronald Ryan

RWR Enclosure

Ronald Ryan Ronald Ryan PC Attorney at Law 1413 E. Hedrick Drive Tucson, Arizona 85719 (520)298-3333 fax: (520)743-1020 ronryanlaw@cox.net AZ #018140 Pima County #65325

ARTICLE 9 APPLICATION TO SALES OF NEGOTIABLE AND NON-NEGOTIABLE PROMISSORY NOTES AND INCLUDES THE ONLY WAY THAT A MORTGAGE INCIDENT TO THE SALE OF A NOTE CAN BE ACCOMPLISHED Source, see March 29, 2011, Draft Report of the Permanent Editorial Board on the UCC Rules Applicable to the Assignment of Mortgage Notes and to the Ownership and Enforcement of Those Notes and the Mortgages Securing Them, plus introductory letter from Board Chairman1 The security interest follows ownership of the Loan/Note. This rule has been codified in ARS 33-817. The transfer of any contract or contracts secured by a trust deed shall operate as a transfer of the security for such contract or contracts. The phrase transfer of any contract, does not refer to transfer of the right to enforce the Note, or holder status, it means transfer of ownership of the Loan.2 UCC Article 3 applies to the right to enforce promissory notes, but not to the ownership of notes, nor
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See http://docs.google.com/viewer?a=v&q=cache:1iCsqRxNCYJ:extranet.ali.org/directory/files/PEB_Report_on_Mortgage_NotesCirculation_Draft.pdf+American+Law+Institute+and+the+Uniform+Law+Commission,+the+or ganizations+that+jointly+sponsor+the+UCC,+established+the+Permanent+Editorial+Board+for +the+Uniform+Commercial+Code&hl=en&gl=us&pid=bl&srcid=ADGEESi4LGDLbXX6yZG VqMSbZTpLTJgwr2eXB9nh2LqgtihUwuIVP6catuvoVNoOqChWVEoU3piXZJ2BHZWj4QyCL5qbpEy92lRTe9itlda-PJRpPPQfzrwoQWJjXQyy98qQs2Pso7&sig=AHIEtbScAm5B0hAJH_Xec46DDM7h-6gASg&pli=1 "Contract", as distinguished from "agreement", means the total legal obligation that results from the parties' agreement as determined by this title [UCC Art. 9] as supplemented by any other applicable laws. ARS 47-1201 (B)(12).
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to the right to enforce the deed of trust rights incident to the sale of said notes. Article 9 applies to sales of negotiable and non-negotiable promissory notes. UCC 9-109(a)(3); ARS 47-9109(A)(3). [Article 9] applies to. . . a sale of . . . promissory notes. Id. Ownership of the Loan/Note is required to enforce a mortgage and being the holder of a note is insufficient. Exhibit M, p. 82. It must be borne in mind that in this context, definitions used are unexpected and should be studied.3 The rightful purchaser of a Loan/Note that is secured by a deed of trust in real estate obtains the security interest. The attachment of a security interest in a right to payment or performance secured by a security interest or other lien on personal or real property is also attachment of a security interest in the security interest, mortgage or other lien. ARS 47-9203(G); See also, as stated, ARS 33-817. However, in order to transfer the security in the mortgage, there must be a true and valid sale of the loan/note.4 For there to be a true sale, it must be complete, which requires complete divestiture by the seller to the buyer, such that the sale is legally enforceable between them.
See "Debtor" means . . . A seller of . . . promissory notes. . . ARS 47-9102(A)(28)(b). "Secured party" means. . . a person to which . . . promissory notes have been sold. ARS 479102(A)(71)(d). "Security interest" . . . includes any interest of a . . . buyer of a promissory note in a transaction that is subject to [UCC Article 9]. ARS 47-1201(B)(35); "Security agreement" means an agreement that creates or provides for a security interest.. ARS 479102(A)(72). "Collateral" means . . promissory notes that have been sold. ARS 479102(A)(12)(b). 4 Error! Main Document Only.As used here, Mortgage is synonymous with the deed of trust security interest. "Mortgage" means a consensual interest in real property, including fixtures, that secures payment or performance of an obligation. ARS 47-9102(A)(55).
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A security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral, unless an agreement expressly postpones the time of attachment. ARS 47-9203(A). For the sale to be complete, three criteria must be met to validly sell a loan/note, and the mortgage that goes with it, such that the buyer (secured party) can enforce the mortgage against the homeowner. They are set forth in ARS 47-9203(B). The first two are substantive and are extremely important. First, the buyer does not have a security interest on the homeowners property and the mortgage cannot be enforced by the loan/note buyer or their agents, unless the loan/note was purchased for value. Second, the buyer does not have a security interest on the homeowners property and the mortgage cannot be enforced by the loan/note buyer or their agents, unless loan/note was purchased from a party that owned the loan/note and mortgage, and was the holder or otherwise had the right to transfer the note. [A] Security interest is enforceable against the debtor and third parties with respect to the collateral only if: 1. Value has been given; 2. The debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party; and [the third criterion is met]. ARS 47-9203(B)(1) and (2). The third criterion can be met in one of two ways. The buyer of the loan/note has a document transferring ownership of the note to

the buyer that has been signed by the seller, or the buyer has possession of the note. One of the following conditions is met: (a) The debtor has authenticated a security agreement that provides a description of the collateral . . . ; (b) The collateral is in the possession of the secured party under section 47-9313 pursuant to the debtor's security agreement. ARS 47-9203(B)(3).5 In addition to the above, in order to pursue non-judicial foreclosure proceedings under the deed of trust, if there is not a valid assignment of deed of trust of record, the purchaser of the loan/note and mortgage may, prior to the recording of the notice of trustee sale, record the document evidencing the sale of the loan/note and a sworn affidavit that the secured party is entitled to enforce the mortgage nonjudicially. If necessary to enable a secured party to exercise under subsection A, paragraph 3 of this section the right of a debtor to enforce a mortgage nonjudicially, the secured party may record in the office in which a record of the mortgage is recorded: 1. A copy of the security agreement that creates or provides for a security interest in the obligation secured by the mortgage; and 2. The secured party's sworn affidavit in recordable form stating that: (a) A default has occurred; and (b) The secured party is entitled to enforce the mortgage nonjudicially.

"Authenticate" means: (a) To sign; or (b) To execute or otherwise adopt a symbol, or encrypt or similarly process a record in whole or in part, with the present intent of the authenticating person to identify the person and adopt or accept a record. ARS 47-9102(A)(7).

ARS 47-9607(B). Obviously, if the party executing the Affidavit does not qualify pursuant to ARS 47-9203(B)(1) and (2), and all other relevant provisions, they would be committing perjury. Such affidavits must surely be challengeable on cross-examination and with controverting evidence. We must be allowed to discover proof that they truly purchased for value the Note from the party that owned in previously. The application of the above UCC Article 9 provisions to a transaction that falls within its scope cannot be avoided by agreement. Furthermore, UCC Article 9 trumps common law. UCC Report, p2-3, fn 7-8; ARS 47-9602; ARS 47-1302. /s/ Ronald Ryan