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

[Rich Holland]

Off of the top of my head, you see a  number of them in certain
situations:

 

1.       Agricultural land (obviously) – required by statute;

2.       Where there is an issue with the note/DoT – classically where
MERS was used and the bank now wanting to foreclose doesn’t have or know
where the note is and the title company is nervous about providing
insurance following a non-judicial foreclosure (In Oregon it is a
no-brainer.  Almost all MERS DoTs go judicial – though WA law is somewhat
different);  There is or was an entire cottage industry based on trying to
undo Trustee’s Sales and while rarely successful in Washington (unless you
stop the sale before it happens), national lenders often just have one
policy and so may just opt for judicial because that is what they do now
in any case where they were not the originating lender.

3.       Where the ‘borrower’ has died and they heirs are essentially
unknown and/or the estate not probated – in short some situation where
‘ownership’ is not clear on title

 

Where the property is significantly upside down I have seen first lenders
only sue on the note to get to the other assets if a borrower has them.

 

Thank you,

 

Rich Holland

 

From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Oscar Yang Esq.
Sent: Tuesday, September 16, 2014 12:37 PM
To: wsbarp at lists.wsbarppt.com
Subject: RE: [WSBARP] Residential Purchase/Construction: Deed of Trust-
Nonrecourse vs. Recourse

 

Thank you for sharing info, Rich and Nicholas! 

  

As a practical matter, how frequently do you guys see the first lenders
judicially foreclosing their deeds of trust/promisory notes in WA,
especially for residential properties priced no more than $1M?  My friend
who worked at a bank many years says that she saw very few judicial
foreclosures there, but would like to hear from other attorneys.  With
extra cost/time and a possibility of 6 month+ abandonment, I wonder how
much a borrower should worry about the first lender's judicial foreclosure
calling for a deficiency judgment in absence of unusual circumstances. 

  

It's great to learn about the case of Beal Bank to support a second
lender's pursuit after non-judicial sale.  

  

Thank you again for your time, 

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

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