[WSBARP] Residential Purchase/Construction: Deed of Trust- Nonrecourse vs. Recourse

[Rich Holland]

Here’s the relevant language Beal Bank v Sarich (2007),  just to put a bow
on Mr. Fisher’s point about the “junior lienholders”:

 

Because Washington Mutual, as the senior lienholder, elected to pursue its
rights to a nonjudicial foreclosure, Washington Mutual's action does not
preclude a junior lienholder (here, Beal Bank) from seeking its legal
recourse.   Put another way, while Beal Bank's rights in the collateral
are extinguished by Washington Mutual's trustee's sale, the underlying
promise by the Sariches and Mr. Cashman to pay Beal Bank on the two notes
continues via the promissory notes, although the promissory notes are now
unsecured as a result of that trustee's sale.

 

 

Rich Holland

 

From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Nicholas Fisher
Sent: Monday, September 15, 2014 1:33 PM
To: wsbarp at lists.wsbarppt.com
Subject: RE: [WSBARP] Residential Purchase/Construction: Deed of Trust-
Nonrecourse vs. Recourse

 

That isn’t really accurate.  The notes signed in first position and second
position are all recourse notes.  The Deed of Trust Act under RCW
61.24.100 operates to remove the ability to obtain a deficiency on the
first note, but only under a nonjudicial foreclosure.  If the lender
chooses to sue for judicial foreclosure, then the full recourse is
available to the lender.  Beal Bank v Sarich (2007) gives the second an
explicit right to pursue its note after a nonjudicial foreclosure and has
been aggressively pursued by BECU for the last year under that case.

 

Sincerely,

 Nicholas D. Fisher

425-314-6737

www.NicFisherLaw.com <http://www.nicfisherlaw.com/> 

DistressedandTaxed.blogspot.com <http://distressedandtaxed.blogspot.com/> 

 IRS Circular 230 notice: Any tax advice contained herein was not
intended or written to be used, and cannot be used, by you or any other
person (i) in promoting, marketing, or recommending any transaction,
plan, or arrangement or (ii) for the purpose of avoiding penalties that
may be imposed under federal tax law.

 

 

 

From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Oscar Yang Esq.
Sent: Monday, September 15, 2014 1:27 PM
To: wsbarp at lists.wsbarppt.com
Subject: [WSBARP] Residential Purchase/Construction: Deed of Trust-
Nonrecourse vs. Recourse

 

Hello Listmates, 

  

To my knowledge, the first Deeds of Trusts in WA for the purchase of
residential property are non-recourse loans while subsequent Deeds of
Trust are recourse ones.  Have you ever encountered or seen any exceptions
in your practice?    

  

Also, what about your primary/first Construction Deed of Trust? Does that
become regarded as a subsequent Deed of Trust (thus a recourse loan)? 
  

Best regards, 

Oscar Yang, Esq. (WA/NY) 
Es Berry Law PC 
2155 112th Ave NE 
Bellevue, WA 98004 

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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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