[WSBAPT] HELP!

[Eric Nelsen]

Definitely agree with Marcus—the critical analysis is how much money the estate would receive if it sold the property and paid off the reverse mortgage (and any other debts secured by liens). That money, if any, is what would be available to pay administration expenses. Obviously expenses in this case will be rather high given the need to evict squatters, clean up the property, and get it sold, so getting a clear idea of market value of the house (and building in a big cushion in case the market takes a dive) would be very important.

But in that case, once the house is sold, there’s money to work with and you could run the probate as a standard insolvent estate, which pays its administrative fees and costs first and has great leverage to negotiate unsecured creditor debts down. And if creditors won’t cooperate, the court can always order pro rata payment based on what remains after payment of all fees and costs.

But if there’s not enough equity to do the above, I think the PR has a harder analysis. The PR could resign, but if the PR is an heir at law, they’re still potentially liable for anything that happens at the property along with the other heirs, under the immediate inheritance of real property in RCW 11.04.250. My worry in these circumstances is for the heirs, and what they do about premises liability if the squatters burn the place down and the fire destroys neighboring buildings (for example). Or maintenance of a nuisance property resulting in government fines, etc.

But getting a bank to promptly foreclose can be difficult too, or at least it used to be. I don’t know how fast they move toward it these days. I do know I’ve had or heard of a couple cases in the last year or so where the foreclosure didn’t even start until 2-3 years after the default.

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Marcus J. Fry
Sent: Wednesday, July 27, 2022 4:48 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] HELP!

Depends on how you wish to proceed.  If you can handle the eviction and there is plenty of equity in the house, your PR and you will get paid before unsecured creditors from the estate.  If that is acceptable, you should file a notice of insolvency and a motion to reaffirm nonintervention powers asserting best interests of all not to have additional cost of court supervision  and give notice to all creditors and beneficiary.

If your client wants out, file a motion to resign outlining the details concerning the estate and again give notice to creditors and beneficiary and also file a claim for administrative expenses and a request for special notice in case someone else takes over.


Marcus J. Fry
Attorney | Witherspoon • Kelley
mjf at witherspoonkelley.com<mailto:mjf at witherspoonkelley.com> | Attorney Profile<https://www.witherspoonkelley.com/marcus-j-fry> | vCard<https://www.witherspoonkelley.com/s/mfj.vcf>

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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Diane J. Kiepe
Sent: Wednesday, July 27, 2022 4:07 PM
To: 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] HELP!

Hello Team Listserv,

I have a couple who died within 1 month of each other, no children, charity beneficiary says they don’t want to take the home for facts that will be clear as you read.  The only asset is a home with a reverse mortgage (racking up interest every day) and folks living there without any color of title.  The market was hot and it appeared on the front end the tenants would work with us in getting out  - the market is now more soft and tenants are still there.  I asked the mortgage company to do a Deed in Lieu and they won’t because of the folks there.  I don’t think it appropriate for the PR to have to front any more costs to estate then have been fronted to date.

I had a valuation of the home done but the tenants are untidy, cats roam around etc.  At this point, the way reverse mortgages run, I am inclined to let the house go through foreclosure.  I also think now the estate is upside down because of creditor’s claims.  Trying to figure out what documents to file with the court going forward – any thoughts?  I’ve had insolvent estates before but they weren’t this messy (reverse mortgage/creditor).

I’m exhausted with this one ☹

Diane J. Kiepe

Diane J. Kiepe
Douglas Eden
717 W. Sprague Ave.
Suite 1500
Spokane, WA  99201
djkiepe at depdslaw.com<mailto:djkiepe at depdslaw.com>
509-455-5300



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