[WSBARP] defending and judicial foreclosure, no debt owing by defendants

[Josh Grant]

My client and his parents have been sued with a judicial foreclosure complaint of a 1998 loan.  Plaintiff is a US Bank NA “as trustee under the pooling and servicing agreement...”

The parents have been dead for well over 2 years.  My client didn’t sign on the loan.  The parents signed the loan, but they didn’t own the property when the loan was made.. as they had  previously given the house to my client.  they reserved a life estate in the gift deed which was recorded before 1998.  Obviously the life estate is now over.  I assume that the lien on the life estate is also over.  There was a lender’s policy issued to the Plaintiff for $76,500.  I have been trying to get them to claim proceeds from that lender’s policy  for years, all I got for my efforts was this judicial foreclosure of my client’s land.  They now claim the $63,041 principal owing plus interest of $18,253.46 interest so they are claiming a little more than the title insurance would pay them (about $8000). However, had they claimed the insurance proceeds a couple of years ago, when I told them about it, the title insurance proceeds would have covered all pr and interest.

Plaintiff’s attorney (appears to be a collection law firm??) has ignored my correspondence.

I have confirmed that the lender’s policy is in effect, the title company admits they goofed, and they seem ready to pay.  They denied my claim to defend the foreclosure (correctly) saying that I didn’t represent the insured  basically saying “the lender may have a claim but you don’t”.

So my question is what can I threaten to do , if the collection attorney continues to ignore common sense? I am going to send another letter that says “go grab the insurance money and drop this suit”.

Can I threaten Summary Judgment because no one they sued owes any money? and the real estate lien is invalid because there is no valid underlying debt?
CR 11 attorney fees, if they resist the summary judgment  (Given all the info I have given one collection bureau after another through the years, maybe CR 11 will apply to the filing of the judicial foreclosure complaint itself even if they don’t resist??

I think this really boils down to whether they can foreclose a lien where there is no underlying debt when they filed their complaint?  and if so, don’t they have to offset the insurance proceeds which they can claim if they would do so?

If they can foreclose their old lien, then they could get my client’s house back, and then go claim the title insurance proceeds as well?

They have asked for quiet title against everyone claiming under the decedents. 

Maybe the answer and the summary judgment we file will say, “no quiet title to my client” and award CR 11 sanctions for not simply filing for the title insurance, and again, because there is no valid underlying loan.

No estate was ever filed.  My client could file their will and deny any creditors claim as not owing.  But I don’t think that will quiet title to the house.

sorry this is so long.

Joshua F. Grant, PS
Attorney at Law
P. O. Box 619
Wilbur, WA 99185
tel 509 647 5578
fax 509 647 2734
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