Deeds of Trust

If a deed of trust is executed conveying real property located in the state to a trustee as security for the payment of an indebtedness and the deed provides that in case of default or noncompliance with the terms of the trust, the trustee may sell the property for condition broken, the trustee, in addition to the right of foreclosure and sale, may execute the trust by sale of the property, upon the conditions and in the manner set forth in the deed of trust, without first securing a decree of foreclosure and order of sale from the court, if the trustee has complied with the notice requirements. If the deed of trust is foreclosed judicially or the note secured by the deed of trust is sued on and a judgment is obtained by the beneficiary, the beneficiary may not exercise the nonjudicial remedies. Not less than 30 days after the default and not less than 90 days before the sale, the trustee shall record in the office of the recorder of the recording district in which the trust property is located a notice of default setting out (1) the name of the trustor, (2) the book and page where the trust deed is recorded or the serial number assigned to the trust deed by the recorder, (3) a description of the trust property, including the property's street address if there is a street address for the property, (4) a statement that a breach of the obligation for which the deed of trust is security has occurred, (5) the nature of the breach, (6) the sum owing on the obligation, (7) the election by the trustee to sell the property to satisfy the obligation, (8) the date, time, and place of the sale, and (9) the statement described in (e) of this section describing conditions for curing the default. (AS 34.20.070) When a sale is made by a trustee under a deed of trust, no other or further action or proceeding may be taken nor judgment entered against the maker or the surety or guarantor of the maker, on the obligation secured by the deed of trust for a deficiency. (AS 34.20.100)

If the amount due is grossly overstated in the notice of sale, then the foreclosure sale may be set aside by a court if the sale is contested by a party. Semlek v. National Bank, 458 P.2d 1003 (Alaska 1969). Instead of non-judicial foreclosure the lender may judicially foreclose the deed of trust as a mortgage, in which case the anti-deficiency statute does not apply. After the court confirms the judicial sale, the debtor has a one-year period within which to redeem the property. Because of the anti-deficiency statute AS 34.20.100, a lender that has equipment collateral or other personal property collateral will exercise its remedies against the personal property collateral prior to or at the same time as the non-judicial foreclosure sale of the real property to the extent that such personal property remedies may require a court action for replevin or collection. After the foreclosure sale, the set-off of funds held by the creditor as collateral is not barred by the anti-deficiency statute because the set off is not a “further action or proceeding” within the meaning of the statute. Hull v. Alaska Fed. Sav. & Loan Ass’n., 658 P.2d 790 (Alaska 1983).