[WSBARP] Condo Foreclosure Basics

Fri May 1 11:56:53 PDT 2015

You make me laugh.  My negotiation with Ban k of America to date has been to
use their own inefficiencies against them.  Like stretch out the foreclosure
process for three years.  "too big to pay attention."  Or, "the lights are
on but no one is home".

James R. Doran

Attorney at Law

100 E. Pine Street - Suite 205

Bellingham, WA 98225

(360)393-9506

 <mailto:jim at doranlegal.com> jim at doranlegal.com

www.doranlegal.com

From: wsbarp-bounces at lists.wsbarppt.com
[mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Paul Neumiller
Sent: Friday, May 1, 2015 11:38 AM
To: 'WSBA Real Property Listserv'
Subject: Re: [WSBARP] Condo Foreclosure Basics

Correct.  I came up with the same conclusions when I was personally
considering purchasing a condo at a sheriff's sale.  Fortunately, when I
called the Association's attorney, he tipped me off to review the court file
before I showed up to bid.  

"Negotiate something with Bank of America" reminds of the quote from Game of
Thrones "If you think this has a happy ending, you haven't been paying
attention."

However, as you noted, BofA may foreclose tomorrow, or in five years, or
never.  Your client is paying $15k to take that risk.

From: wsbarp-bounces at lists.wsbarppt.com
<mailto:wsbarp-bounces at lists.wsbarppt.com>
[mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Jim Doran
Sent: Friday, May 1, 2015 10:58 AM
To: 'WSBA Real Property Listserv'
Subject: Re: [WSBARP] Condo Foreclosure Basics

I just looked at the Court pleadings.  Bank of America was named and did
establish its super priority lien with the Condo Association.  It looks like
Bank of America retains its security by the DOT. 

Does this mean that my client will lose her $15,000 payment made to the
Sherriff when Bank of America eventually forecloses on their DOT.  (She
hasn't coughed up the money yet.)

That's what it is starting to look like.  Bank of America does not have to
redeem to foreclose.

My advice would be that she will most likely lose the money unless she can
negotiate something with Bank of America.  But that is a big IF.

Do I got it right?

Of course she might be able to live there for a year or so while Bank of
America gets around to foreclosing.

James R. Doran

Attorney at Law

100 E. Pine Street - Suite 205

Bellingham, WA 98225

(360)393-9506

 <mailto:jim at doranlegal.com> jim at doranlegal.com

www.doranlegal.com <http://www.doranlegal.com> 

From: wsbarp-bounces at lists.wsbarppt.com
<mailto:wsbarp-bounces at lists.wsbarppt.com>
[mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Patrick McDonald
Sent: Friday, May 1, 2015 10:43 AM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] Condo Foreclosure Basics

It completely depends on whether the association has lien priority over the
deed of trust as provided in RCW 64.34.364(3), and if so, whether the lender
appeared in the lawsuit and paid off the association's lien priority. 

If the association does not have lien priority, then the lender would not
have been named as a defendant in the lawsuit, and your client takes his or
her interest subject to the deed of trust. If and when the lender
forecloses, it will eliminate your client's interest in the unit. The result
is the same if the Association does have lien priority but the lender paid
it off and was dismissed from the lawsuit. In either case, the lender does
not have to avail itself of the redemption statute because its deed of trust
is senior to the interest your client purchased at the sheriff's sale.  

If the Association has lien priority, named the lender as a defendant in the
lawsuit, and the lender did not satisfy the Association's lien priority,
then the lender would have to redeem from your client by paying off the
amount bid plus interest and potentially some additional amounts as provided
in RCW 6.23.020. The legislature changed the redemption statute to allow
lenders to redeem in the wake of the Summerhill Village case in 2012. 

If the lender (or foreclosed owner) did not redeem, then your client would
own the unit free and clear of their interests. 

This is somewhat of a big subject with a lot of variables at play, but those
are the very basics. 

Patrick McDonald

________________________
Pody & McDonald, PLLC
1200 Fifth Avenue, Suite 1410
Seattle, WA 98101-3106
T: 206-467-1559
F: 206-467-4489

On May 1, 2015, at 10:00 AM, Jim Doran <jim at doranlegal.com
<mailto:jim at doranlegal.com> > wrote:

I have client that just bought a condo at a Sherriff's sale for $15,000
which were the dues owed by the owner.  The underlying debt is with Bank of
America for $120,000 but the property has a value of $70,000.  B of A did
not show up at the sale. 

What happens?  Client gets the property subject to the Bank of America deed
of trust, right? 

So, the deadbeat prior owner won't pay, that's for sure.  My client doesn't
want to pay $120,000 to B of A.  So I expect there will be a foreclosure by
bank of America on the new owner.

What is the function of the "Redemption Rights" in the Bank?  Does the Bank
have to buy the place back from my client for what she paid at the sale? 

A quick overview of how this works would be appreciated.  Just the
framework.

Thanks,

James R. Doran

Attorney at Law

100 E. Pine Street - Suite 205

Bellingham, WA 98225

(360)393-9506

 <mailto:jim at doranlegal.com> jim at doranlegal.com

 <http://www.doranlegal.com/> www.doranlegal.com

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