[WSBARP] line of credit priority

[Eric Nelsen]

Josh--I think it will depend largely on the language of the loan contract. I think the essence of your argument is that the bank has waived the contract term requiring collateral. If you can meet the facts for doctrine of waiver, and there is no contractual language that would defeat that defense, the client might have a shot. But I can imagine a lot of contractual clauses and fact scenarios that would have an impact on that result.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA 98101-2837
phone 206-625-0092
fax 206-625-9040

From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Josh Grant
Sent: Thursday, November 05, 2015 2:47 PM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] line of credit priority

If a secured loan was paid off, the newest bank loan and lender will claim a priority under equitable subrogation.

I have a different question.
My client had a secured line of credit.  He sold the secured house, the bank signed off on the payoff, the sale closed.  Instead of closing the line of credit, the bank “renewed” it without any new property being secured.  They now say client in breach because there is no secured property. We are going to suggest, “you knew about it, so by  your actions, your loan became unsecured, and client will continue to pay interest only payments as agreed”.
Anyone have an idea about how this should come out?

Josh Grant

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

From: Roger Hawkes<mailto:Roger at law-hawks.com>
Sent: Thursday, November 05, 2015 1:16 PM
To: WSBA Real Property Listserv<mailto:wsbarp at lists.wsbarppt.com>
Subject: [WSBARP] line of credit priority

What is the authority in Washington for subsequent advances under a recorded line of credit having priority upon execution sale by a subsequent judgment creditor?

Roger Hawkes, WSBA # 5173
19909 Ballinger Way NE
Shoreline, WA 98155
www.hawkeslawfirm.com<http://www.hawkeslawfirm.com>
206 367 5000
Fax is 206 367 4005

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