[WSBARP] 1st and 2nd Mortgage in non-judicial foreclosure
Tom J. Westbrook
tjw at w3net.net
Fri Mar 28 16:26:17 PDT 2014
Thanks so much, Eric. You really went above and beyond. If I find anything
further as I go down this road, I’ll let you know.
Sincerely,
Tom
Thomas J. Westbrook
Attorney at Law
Thomas J. Westbrook, PLLC
PO Box 1
Littlerock, WA 98556
Olympia Office:
Evergreen Plaza Building
711 Capitol Way S.
Suite 101
Olympia, WA 98501
Telephone: 360-357-7400
Facsimile: 360-357-7414
Email: tjw at w3net.net
Skype: thomas.westbrook
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From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Friday, March 28, 2014 2:16 PM
To: wsbarp at lists.wsbarppt.com
Subject: RE: [WSBARP] 1st and 2nd Mortgage in non-judicial foreclosure
Well, I can't find whatever it is I thought I remembered. The thing I want
to look for is how the "obligation" secured by the DOT is determined. Can
a bank circumvent the anti-deficiency rules by breaking a loan up into
multiple parts, securing each of them with separate DOTs all on the same
property, and then nonjudicially foreclose the most senior one and pursue
personal judgments on all the other notes? It sure feels like an end-run
around the legislative compromise of RCW 61.24.
Recent case Gardner v. First Heritage Bank, 174 Wn.App. 1023, 303 P.3d
1065 (2013), addresses multiple DOTs on the same "obligation," but not the
concept of multiple obligations. It holds that a bank may serially
foreclose multiple deeds of trust that secure the same note, because the
antideficiency statute, RCW 61.24.100, only prohibits what it says: a
deficiency judgment, meaning a personal judgment against the debtor for
the shortfall between the amount of the debt and the value of the land
foreclosed upon. Note that the court says the debt was "cross
collateralized" but apparently that was only multiple parcels of land as
collateral, all securing the same debt.
Donovick v. Sea-First Nat'l Bank, 111 Wn.2d 413, 417-418, 757 P.2d 1378
(1988), has some interesting language in the majority opinion, and a long
dissent, that might be sympathetic to the argument that a single bank
taking two notes and securing them simultaneously on a single house is
effectively trying to circumvent the policies supporting nonjudicial
foreclosure.
That's all I got.
Sincerely,
Eric
Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA 98101-2837
phone 206-625-0092
fax 206-625-9040
From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Tom J. Westbrook
Sent: Thursday, March 27, 2014 6:52 PM
To: wsbarp at lists.wsbarppt.com
Subject: RE: [WSBARP] 1st and 2nd Mortgage in non-judicial foreclosure
Hi Eric,
Never did get any case law on this. I like you have the same recollection,
but think it was the recent one where the lender tried to pursue the
guarantee after non-judicial foreclosure on the note. I think in that case
it was the same note and that lead the court to say you only get on chance
on one note. Here there is a second note, but my argument is it is the
same transaction and was done simply to make the loan work with the
existing underwriting guidelines on the first – the borrower only asked
for one loan and the gave him one loan, but used two notes. I have since
learned they have a DOT for the second note as well. I would love to find
a case on point rather than have to argue legal theory on behalf of my
client. Any help anyone can provide would be fabulous.
Sincerely,
Tom
Thomas J. Westbrook
Attorney at Law
Thomas J. Westbrook, PLLC
PO Box 1
Littlerock, WA 98556
Olympia Office:
Evergreen Plaza Building
711 Capitol Way S.
Suite 101
Olympia, WA 98501
Telephone: 360-357-7400
Facsimile: 360-357-7414
Email: tjw at w3net.net
Skype: thomas.westbrook
The information contained in this email and attachment(s) are for the
exclusive use of the addressee(s) and may contain private, privileged
and/or confidential information. If you are not the addressee, you are
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From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Thursday, March 27, 2014 10:55 AM
To: wsbarp at lists.wsbarppt.com
Subject: RE: [WSBARP] 1st and 2nd Mortgage in non-judicial foreclosure
Tom, did you ever get case law on this? I have a vague recollection of a
case that at least makes the point that all debt secured by a DOT is
extinguished, even if represented by multiple notes...and there might also
be one that talks about cross-collateralization causing extinguishment as
to all debt if one DOT is foreclosed, and maybe even terminating multiple
DOTs securing the same debt. But I don't have cites on hand, sorry, and I
am not positive it would address your specific scenario.
Sincerely,
Eric
Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA 98101-2837
phone 206-625-0092
fax 206-625-9040
From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Tom J. Westbrook
Sent: Tuesday, March 25, 2014 8:12 AM
To: wsbarp at lists.wsbarppt.com
Subject: RE: [WSBARP] 1st and 2nd Mortgage in non-judicial foreclosure
Good point, Rebecca. That is what client tells me. I haven’t seen all the
docs yet. I will get them from title company to be sure.
If there are 2 DOTs in the same transaction with two Notes all done at the
same time just to make the loan work, do you know if there is any
precedence to call this one transaction and preclude the lender chasing
the borrower on the 2nd judicially?
Also, any chance this kind of lending practice could be considered
predatory? Seems like if the borrower can’t qualify for the loan to begin
with, then the 2nd Note and DOT is nothing more than a sham to get passed
underwriting requirements. Please let me know if I am thinking incorrectly
along this line. Thanks.
Sincerely,
Tom
Thomas J. Westbrook
Attorney at Law
Thomas J. Westbrook, PLLC
PO Box 1
Littlerock, WA 98556
Olympia Office:
Evergreen Plaza Building
711 Capitol Way S.
Suite 101
Olympia, WA 98501
Telephone: 360-357-7400
Facsimile: 360-357-7414
Email: tjw at w3net.net
Skype: thomas.westbrook
The information contained in this email and attachment(s) are for the
exclusive use of the addressee(s) and may contain private, privileged
and/or confidential information. If you are not the addressee, you are
strictly prohibited from reading, photocopying, distributing or otherwise
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communication in error, please notify us immediately by telephone at
360-357-7400 or by e-mail to cjw at w3net.net, and destroy the original
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From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of RebeccaWiess
Sent: Tuesday, March 25, 2014 7:46 AM
To: wsbarp at lists.wsbarppt.com
Subject: RE: [WSBARP] 1st and 2nd Mortgage in non-judicial foreclosure
Is there really only one DT which references both notes?
Rebecca K. Wiess
Attorney at Law
1420 5th Avenue, Suite 3775
Seattle, WA 98101
Phone 206 622-4425
Fax 206 622-9021
rwiess at foxinternet.net
_____
From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Tom J. Westbrook
Sent: Monday, March 24, 2014 6:28 PM
To: wsbarp at lists.wsbarppt.com
Subject: [WSBARP] 1st and 2nd Mortgage in non-judicial foreclosure
Hello,
Client bought home and to qualify the lender gave him a 1st as to $300k+
and a 2nd as to 90k+. It was one loan application and all done at same
time. Lender calls the 2nd a HELOC and claims that if they foreclosure
non-judicially they can still go after the 2nd judicially on the
promissory note. I know we see this type of transaction all too often and
to me it is one loan even though lender elected to cover it with two Prom
Notes – both are still covered by same DOT. Anyone have a case on point
for this?
BTW – the home is underwater financially on the first alone. Borrower is
current on loan and made a HARP application and lender is simply scoffing
at him and unwilling to modify.
Any advice or thoughts are appreciated. Thanks.
Sincerely,
Tom
Thomas J. Westbrook
Attorney at Law
Thomas J. Westbrook, PLLC
PO Box 1
Littlerock, WA 98556
Olympia Office:
Evergreen Plaza Building
711 Capitol Way S.
Suite 101
Olympia, WA 98501
Telephone: 360-357-7400
Facsimile: 360-357-7414
Email: tjw at w3net.net
Skype: thomas.westbrook
The information contained in this email and attachment(s) are for the
exclusive use of the addressee(s) and may contain private, privileged
and/or confidential information. If you are not the addressee, you are
strictly prohibited from reading, photocopying, distributing or otherwise
using this email or its contents in any way. If you have received this
communication in error, please notify us immediately by telephone at
360-357-7400 or by e-mail to cjw at w3net.net, and destroy the original
message from your electronic files.
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