[WSBARP] Real Estate Contract (RCW 61.30) for Partially Agricultural Land in lieu of mortgage

Thu Mar 13 10:48:31 PDT 2014

I do RECs whenever I can due to the new DOT foreclosure requirements.
However, if you have a “friend/family” buyer who is doing this on a short
term deal with balloon in 2-3 years, I often use the DOT still because
lending institutions (most based out of the east coast) don’t consider
that the buyer under a REC as the owner, and therefore, will not allow the
buyer to re-fi, but rather have to do a new purchase loan.  Remember, you
now also have the Dodd-Frank law applying to private seller financed
transactions, regardless of whether they are RECs or DOTs.

Marcus J. Fry

Lyon, Weigand & Gustafson, P.S. 
Adoption Attorney*

P.O. Box 1689 
Yakima, Washington  98907 
Telephone:  (509) 248-7220 
Facsimile:  (509) 575-1883 

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From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of swhite8893 at aol.com
Sent: Thursday, March 13, 2014 10:41 AM
To: wsbarp at lists.wsbarppt.com
Subject: Re: [WSBARP] Real Estate Contract (RCW 61.30) for Partially
Agricultural Land in lieu of mortgage

That's an interesting question. Back a ways, RECs were always used here
locally. It then changed to DOTs but for no apparent reason I ever heard
expressed. Maybe liability concerns. When the real estate world started
going upside down in 2008, a lot of ideas came up about making
foreclosures more difficult. Some came to pass and some did not. That
seems to have subsided. The problem was, what was going to happen next.
You could do a DOT and all of a sudden there could be significant hurdles
to overcome to foreclose. The Department of Commerce mediation provisions
did not exempt seller financed transactions. However, none of this was
being applied to RECs. So it struck me that doing a DOT was exposing a
selling client to all sorts of unknowns, and a REC seemed to be the best
way to avoid that. 

     I would be very interested in hearing what other people think.

Steve

Stephen Whitehouse

Whitehouse & Nichols, LLP

Attorneys at Law

P.O. Box 1273

601 W. Railroad Ave.

Shelton, Wa. 98584

360-426-5885

swhite8893 at aol.com

-----Original Message-----
From: Robert R. Rowley <rob at rowleylegal.com>
To: wsbarp <wsbarp at lists.wsbarppt.com>
Sent: Thu, Mar 13, 2014 10:29 am
Subject: [WSBARP] Real Estate Contract (RCW 61.30) for Partially
Agricultural Land in lieu of mortgage

As to a seller financed transaction where I represent the seller (and have
the freedom to pick the financing instrument) any thoughts on using a real
estate contract (RCW 61.30) for 240 acres (4 parcels) of which
approximately 30 acres is pasture, small house and out buildings and the
balance of heavily forested?  

Especially in light of the Schroeder v. Excelsior Management Group, 177
Wn.2d 94 (2013) decision where the creditor was slapped up for using a
deed of trust which waived the ‘agricultural provision’ for obviously
agricultural property.

The reason for the real estate contract would be much quicker and less
expensive forfeiture/foreclosure/no redemption.  I use contracts a lot
with residential properties.  This would be in lieu of a standard mortgage
which one always uses for farmland.  I’ve foreclosed and structured both
on many prior transactions.

I didn’t see any prohibitions in RCW 61.30 nor any adverse case law.

Thoughts?

Robert R. Rowley

Spokane

(509) 252-5074 (wk)

rob at rowleylegal.com

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All opinions and comments in this message represent the views of the
author and do not necessarily have the endorsement of the Washington State
Bar Association nor its officers or agents. 

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As with all lists - let the reader beware! No warranties or
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All opinions and comments in this message represent the views of the
author and do not necessarily have the endorsement of the Washington State
Bar Association nor its officers or agents. 

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