[WSBAPT] Default Under DOT and Deceased Debtor

[Paul Neumiller]

Thanks for the input regarding the perils of going the probate route

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of John J. Sullivan
Sent: Tuesday, December 27, 2016 4:23 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Cc: wsbarp at lists.wsbarppt.com
Subject: Re: [WSBAPT] Default Under DOT and Deceased Debtor

Unless you are going after the estate for a deficiency (doesn't sound at all likely or possible since more than two years have passed) a beneficiary of a deed of trust simply ignores probate if foreclosing nonjudicially.  RCW 11.40.135.

I'm guessing you want to avoid someone bidding in because there's lots of equity? But if you open probate and track down heirs are they really going to agree to donate the equity to HFH?  I don't see how you can come in as PR and do a deed in lieu without involving them. And I would want to do a TEDRA Agreement to CYA.

If someone does bid in they have to pay the excess proceeds into the court's registry.

John Sullivan

Sent from my iPhone

On Dec 27, 2016, at 2:33 PM, Paul Neumiller <pneumiller at hotmail.com<mailto:pneumiller at hotmail.com>> wrote:
I am working with my local chapter of Habitat for Humanity and trying to keep their legal costs down.  Debtor and volunteers put in sweat equity to build a house.  Habitat sold house to Debtor and carried back two loans and two deeds of trust.  Debtor is now deceased for several years and in default.  Can’t find Debtor’s family and no one probated Debtor’s estate.  House is vacant.  Should Habitat 1) foreclose on the deeds of trust and go to a foreclosure sale (not sure how to do this against a deceased debtor) OR should Habitat get itself appointed as a special/limited personal representative and then, what?, sign a deed in lieu of foreclosure transferring the property back to Habitat.  I like the probate route because it would probably be faster and if Habitat uses the deed in lieu of foreclosure, Habitat can keep the house in its inventory of affordable housing.  Probably move the court for permission.  On the other hand, I doubt we would be able to find relatives to give the Notice of Pendency Proceeding.  Any guidance would be greatly appreciated.

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