<html><head><meta http-equiv="content-type" content="text/html; charset=utf-8"></head><body dir="auto"><div>Lisa:</div><div id="AppleMailSignature"><br></div><div id="AppleMailSignature">If decedent is the only one on the note, lender can only foreclose - cannot go after B or S for deficiency. Usually in these scenarios clients muddle through and as long as payments continue to be timely the lender is satisfied. </div><div id="AppleMailSignature"><br></div><div id="AppleMailSignature">I agree with Eric that since B is not being relieved of personal liability there is no consideration to him from S for REET purposes. </div><div id="AppleMailSignature"><br></div><div id="AppleMailSignature">I do have one concern though. While Garn-St. Germaine exempts the transfer from decedent to B&S jointly at death, in not sure it exempts the subsequent transfer of B's interest to S by gift for purposes of due on sale. I'd argue there's no trigger because one of the heirs still owns now the whole. But I'm not sure of that one. </div><div id="AppleMailSignature"><br></div><div id="AppleMailSignature">John J. Sullivan<br><br>Sent from my iPhone</div><div><br>On Oct 11, 2017, at 3:07 PM, Eric Nelsen <<a href="mailto:Eric@sayrelawoffices.com">Eric@sayrelawoffices.com</a>> wrote:<br><br></div><blockquote type="cite"><div>
<meta http-equiv="Content-Type" content="text/html; charset=utf-8">
<meta name="Generator" content="Microsoft Word 14 (filtered medium)">
<style><!--
/* Font Definitions */
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
@font-face
{font-family:Tahoma;
panose-1:2 11 6 4 3 5 4 4 2 4;}
@font-face
{font-family:Webdings;
panose-1:5 3 1 2 1 5 9 6 7 3;}
@font-face
{font-family:Garamond;
panose-1:2 2 4 4 3 3 1 1 8 3;}
@font-face
{font-family:"Arial Narrow";
panose-1:2 11 6 6 2 2 2 3 2 4;}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0in;
margin-bottom:.0001pt;
font-size:11.0pt;
font-family:"Calibri","sans-serif";}
a:link, span.MsoHyperlink
{mso-style-priority:99;
color:blue;
text-decoration:underline;}
a:visited, span.MsoHyperlinkFollowed
{mso-style-priority:99;
color:purple;
text-decoration:underline;}
span.EmailStyle17
{mso-style-type:personal;
font-family:"Garamond","serif";
color:windowtext;
font-weight:normal;
font-style:normal;
text-decoration:none none;}
span.EmailStyle18
{mso-style-type:personal-reply;
font-family:"Calibri","sans-serif";
color:#1F497D;}
.MsoChpDefault
{mso-style-type:export-only;
font-size:10.0pt;}
@page WordSection1
{size:8.5in 11.0in;
margin:1.0in 1.0in 1.0in 1.0in;}
div.WordSection1
{page:WordSection1;}
--></style><!--[if gte mso 9]><xml>
<o:shapedefaults v:ext="edit" spidmax="1026" />
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext="edit">
<o:idmap v:ext="edit" data="1" />
</o:shapelayout></xml><![endif]-->
<div class="WordSection1">
<p class="MsoNormal"><span style="color:#1F497D">Agree with John. Personal obligation to pay a debt is determined by who signed the Promissory Note. A mortgage (Deed of Trust) is just an agreement to let the bank seize the house if the Note isn't paid.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">If mother is the only signer of the Note, then B and S have no
<u>personal</u> liability for the debt no matter what. Their inherited ownership of the house is subject to the lender's mortgage and right to foreclose for non-payment, so B and S have practical reasons to pay the debt they aren't liable for...but no matter
what B and S do with transfers of ownership, they aren't liable to lender on the original debt.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">If B gift-quitclaims to S, there is still no need for indemnity that I can see, because B remains free of personal obligation on the Note.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Under that scenario, I think there is no REET due either. See
<a href="http://apps.leg.wa.gov/wac/default.aspx?cite=458-61A-103">WAC 458-61A-103(2)</a>.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<div>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Sincerely,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Eric<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Eric C. Nelsen<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">SAYRE LAW OFFICES, PLLC<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">1417 31st Ave South<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Seattle WA 98144-3909<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">phone 206-625-0092<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">fax 206-625-9040<o:p></o:p></span></p>
</div>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<div>
<div style="border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> <a href="mailto:wsbapt-bounces@lists.wsbarppt.com">wsbapt-bounces@lists.wsbarppt.com</a> [<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">mailto:wsbapt-bounces@lists.wsbarppt.com</a>]
<b>On Behalf Of </b>John J. Sullivan<br>
<b>Sent:</b> Wednesday, October 11, 2017 2:41 PM<br>
<b>To:</b> WSBA Probate & Trust Listserv<br>
<b>Subject:</b> Re: [WSBAPT] Inherited mortgage<o:p></o:p></span></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<div>
<p class="MsoNormal">So B and S are both mortgagors on the existing mortgage? Or was the mortgage taken out by the decedent they inherited the property from? If the latter, neither is personally obligated on the underlying note. <o:p></o:p></p>
</div>
<div id="AppleMailSignature">
<p class="MsoNormal"><o:p> </o:p></p>
</div>
<div id="AppleMailSignature">
<p class="MsoNormal">If the former, B remains liable directly to lender under the promissory note. He would have to secure a release from the lender, which is rarely granted without S refinancing and qualifying separately. <o:p></o:p></p>
</div>
<div id="AppleMailSignature">
<p class="MsoNormal"><o:p> </o:p></p>
</div>
<div id="AppleMailSignature">
<p class="MsoNormal">Secure indemnification agreement with second position deed of trust? If brother is relieved of liability at time of transfer there might be consideration for REET purposes. <o:p></o:p></p>
</div>
<div id="AppleMailSignature">
<p class="MsoNormal"><o:p> </o:p></p>
</div>
<div id="AppleMailSignature">
<p class="MsoNormal">John J. Sullivan<br>
<br>
Sent from my iPhone<o:p></o:p></p>
</div>
<div>
<p class="MsoNormal" style="margin-bottom:12.0pt"><br>
On Oct 11, 2017, at 2:27 PM, Lisa E Schuchman <<a href="mailto:lisa@lisaschuchman.com">lisa@lisaschuchman.com</a>> wrote:<o:p></o:p></p>
</div>
<blockquote style="margin-top:5.0pt;margin-bottom:5.0pt">
<div>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Garamond","serif"">Sister (S) and brother (B), both adults, inherited a house from their mother on her death. We’re getting ready to close the probate and transfer title to them. They understand
that they can keep the existing mortgage without additional need to qualify. But if B later gifts his share of the house to S, can B disentangle himself from the mortgage obligation and leave S fully liable? I know that Garn-St. Germain wouldn’t apply to
that transfer, but since S is already in the place of the mortgagor can B get out of it? Does anyone have a better suggestion?</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Garamond","serif""> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Garamond","serif"">Thanks.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Garamond","serif""> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Garamond","serif";color:black">Lisa E. Schuchman<br>
206-960-4212<br>
<a href="http://www.lisaschuchman.com/" target="_blank">www.lisaschuchman.com</a><br>
<br>
I learn, I give. – Gloria Steinem</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Garamond","serif";color:black">NOTE: I do not use encrypted email. Messages sent to or from my office via email are not secure and may not be protected by attorney-client privilege. This email
address is not monitored at all times. If your matter is urgent, please phone my office during regular business hours.
</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Garamond","serif";color:black">Any tax advice included in this document and its attachments was not intended or written to be used, and it cannot be used, for the purpose of avoiding penalties
under the Internal Revenue Code.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:24.0pt;font-family:Webdings;color:green">P</span><span style="font-size:10.0pt;font-family:"Arial Narrow","sans-serif";color:green">
</span><b><span style="font-size:7.5pt;font-family:"Arial","sans-serif";color:#008100">Please consider the trees before printing this document</span></b><o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
</div>
</blockquote>
<blockquote style="margin-top:5.0pt;margin-bottom:5.0pt">
<div>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif"">_______________________________________________<br>
WSBAPT mailing list<br>
<a href="mailto:WSBAPT@lists.wsbarppt.com">WSBAPT@lists.wsbarppt.com</a><br>
<a href="http://mailman.fsr.com/mailman/listinfo/wsbapt">http://mailman.fsr.com/mailman/listinfo/wsbapt</a><o:p></o:p></span></p>
</div>
</blockquote>
</div>
</div></blockquote><blockquote type="cite"><div><span>_______________________________________________</span><br><span>WSBAPT mailing list</span><br><span><a href="mailto:WSBAPT@lists.wsbarppt.com">WSBAPT@lists.wsbarppt.com</a></span><br><span><a href="http://mailman.fsr.com/mailman/listinfo/wsbapt">http://mailman.fsr.com/mailman/listinfo/wsbapt</a></span></div></blockquote></body></html>