Idaho Supreme Court Holds Standing Does Not Need To Be Proven Prior To Nonjudicial Foreclosure

Foreclosure

On January 25, the Idaho Supreme Court held that a party is not required to prove it has standing before foreclosing nonjudicially on a deed of trust. Trotter v. Bank of New York Mellon, No. 38022, 2012 WL 206004 (Idaho Jan. 25, 2012). Prior to a scheduled trustee’s sale, the borrower filed a complaint alleging lack of standing to foreclose, and challenging MERS’ ability to assign the loan.  The district court granted the bank’s motion to dismiss, finding that the statutory requirements for nonjudicial foreclosures had been satisfied, and that MERS was the beneficiary under the deed of trust and had properly assigned its rights as beneficiary to the bank. The Idaho Supreme Court affirmed, noting that “the plain language of the statute makes it clear that the trustee may foreclose on a deed of trust if it complies with the requirements contained within the Act” and that unlike judicial foreclosures, “there is no statutory requirement for the trustee to prove standing before initiating a nonjudicial foreclosure on a deed of trust.”