[WSBARP] Ownership of home post foreclosure auction

Thu Jun 23 11:09:28 PDT 2016

Shana, 

I don’t think that the fact that there was a sale event without a sale affects the title. The owner still owns it. There is no trustee’s deed to change that ownership. As to the statutes, here’s what I found:

61.24.020: …a deed of trust is subject to all laws relating to mortgages on real property A deed conveying real property to a trustee in trust to secure the performance of an obligation of the grantor or another to the beneficiary may be foreclosed by trustee's sale.

61.24.040 (4) On the date and at the time designated in the notice of sale, the trustee or its authorized agent shall sell the property at public auction to the highest bidder. 

…(7) The purchaser shall forthwith pay the price bid and on payment the trustee shall execute to the purchaser its deed;

61.24.050(1) …if the trustee accepts a bid, then the trustee's sale is final as of the date and time of such acceptance if the trustee's deed is recorded within fifteen days thereafter. 

 <https://1.next.westlaw.com/Document/N16DDE2B09E3011DAA56686838D69F963/View/FullText.html?originationContext=superbrowse&transitionType=Default&contextData=(sc.Default)> 61.24.100. Deficiency judgments--Foreclosure--Trustee's sale--Application of chapter

(1) Except to the extent permitted in this section for deeds of trust securing commercial loans, a deficiency judgment shall not be obtained on the obligations secured by a deed of trust against any borrower, grantor, or guarantor after a trustee's sale under that deed of trust.

 <https://1.next.westlaw.com/Document/NEE9FB9A0A20B11E09837E34F117CD1A4/View/FullText.html?originationContext=superbrowse&transitionType=Default&contextData=(sc.Default)> 61.24.135. Consumer protection act--Unfair or deceptive acts or practices

(1)  It is an unfair or deceptive act or practice under the consumer protection act, chapter 19.86 RCW, for any person, acting alone or in concert with others, to offer, or offer to accept or accept from another, any consideration of any type not to bid, or to reduce a bid, at a sale of property conducted pursuant to a power of sale in a deed of trust.

It seems more likely to me that there was no sale. And if there was no sale, then the deed of trust is not extinguished as an encumbrance. Back to square one. 

Why not just call the trustee and find out what the deal is? Or the person hired by the trustee to conduct the sale? Here, we have a very chatty trustee representative who will usually tell us what we want to know. 

I can imagine a couple of reasons a trustee would not bid: 

·       Sheer incompetency by failing to communicate a bid to the one conducting the sale and that person being afraid to do anything without authority;

·       Finding at the last minute the debtor has other assets and the property is not worth the debt (pretty unlikely; usually they would hve enough time to cancel the sale or postpone it, at least.)

·       Finding out that they had not done something properly and the sale would not be valid (my best guess).

In the meantime, many debtors just continue to reside in the property. They own it, after all. Free housing, courtesy of the lender, save your rent money for a downpayment on the next house. 

Let us know what you find out when you ask for the reason there was no bid. 

Rob

Robert D. Wilson-Hoss 
Hoss & Wilson-Hoss, LLP 
236 West Birch Street 
Shelton, WA 98584 
360 426-2999

www.hossandwilson-hoss.com
rob at hctc.com

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From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Jim Doran
Sent: Thursday, June 23, 2016 9:41 AM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] Ownership of home post foreclosure auction

I am sure someone with more horsepower than me will weigh in on this, but.....   If the foreclosure was not completed then how could the owner be stripped of his interest?  So my question is, did the Trustee's Sale actually happen or not?

It is an interesting question if the Trustee's sale actually happened but no one, not even the lender, bid at the sale.  It seems to me that the parties are in the same boat that they were in prior to the Trustee's Sale.  d

I am eager to hear from others on this topic.  

Jim Doran

James R. Doran

Attorney at Law

100 E. Pine Street -  Suite 205

Bellingham, WA 98225
(360)393-9506

jim at doranlegal.com

www.doranlegal.com

On Thu, Jun 23, 2016 at 9:28 AM, Paul Neumiller <pneumiller at hotmail.com> wrote:

Whoa!?!?!  I have never heard of this.  Why would a bank do this??  I would think that the foreclosure process WAS completed because an auction took place at the court house steps.  It’s not the debtor’s fault the bank didn’t credit bid its loan at the sale.  Why couldn’t the debtor now make the argument that the loan has been wiped out by the sale and there is no deficiency opportunity because the lender used a nonjudicial foreclosure?  Is anyone else seeing this?  

From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Jim Doran
Sent: Thursday, June 23, 2016 8:06 AM
To: attorney at shanapavithran.com; WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Ownership of home post foreclosure auction.

If the home was not "purchased" at the sale then the foreclosure was not completed.  No deed from the Trustee was delivered to a new owner.  

This means that your client is still the owner of the property.  

There are a number of defenses that can be raised in a foreclosure process to keep the bank and servicer at bay.  Now that the great recession of 2008 is getting years past the statute of limitations defense is looming and working its way through the courts of America.  The entire debt or part of it might now be barred.

anyway, if you client wants to talk to me a bout tis, or you want to, I am happy to do so.  I have been doing "foreclosure defense" for a while now.

Jim Doran

James R. Doran

Attorney at Law

100 E. Pine Street -  Suite 205

Bellingham, WA 98225
(360)393-9506 <tel:%28360%29393-9506> 

jim at doranlegal.com

www.doranlegal.com

On Thu, Jun 23, 2016 at 4:49 AM, <attorney at shanapavithran.com> wrote:

 I have a client, whose home was foreclosed, pursuant to a trust deed foreclosure.  The lender held an auction on 2/5/16.  The value of the mortgage was approximately 230K appraised current value is approximately 155K.  Though foreclosed, home was not sold at the auction.  The bank did not bid at the auction or transfer ownership of the home to the bank's name.  The home remains in the client's name. He still pays the water bill on it.  He does not live there right now.  What rights does he have regarding the home?  Does the bank own it or does the client own it outright, as the mortgage is discharged by the foreclosure.

Shana Pavithran
Attorney-at-Law
Pavithran, PLLC.
22525 SE 64th Place, #279
Issaquah, WA 98027

Telephone: (425) 557-3625 <tel:%28425%29%20557-3625> 

Email: attorney at shanapavithran.com
Website: www. shanapavithran.com

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