[WSBARP] Judgment for Deed

[Rob Wilson-Hoss]

We do deeds in lieu that specifically say, non-merger, and that the grantee
retains all other rights it has in the property, including as security for
the debt in rem. I hope that makes sense. This is in the HOA assessment lien
foreclosure context.

 

Rob  

 

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

www.hossandwilson-hoss.com
 <mailto:rob at hctc.com> rob at hctc.com

 

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This office does debt collection and this e-mail may be an attempt to
collect a debt, Any information obtained will be used for that purpose.  To
the extent the Federal Fair Debt Collection Practices Act (15 U.S.C. § 1692)
applies this firm is acting as a debt collector for the
condominium/homeowners' association named above to collect a debt owed to
it. Any information obtained will be used for collection purposes. You have
the right to seek advice of legal counsel.

 

From: wsbarp-bounces at lists.wsbarppt.com
[mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Bickel, Dwight
Sent: Tuesday, March 28, 2017 2:15 PM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] Judgment for Deed

 

It is not true that the entry of the “judgment already extinguished the DOT
and other items on record below it”

 

The entry of the Decree of Foreclosure, and the Judgment determining the
amount owed, do not affect junior liens at that point in time. The junior
liens and rights of successors are not extinguished until a judicial sale,
followed by redemption rights, leading to a Sheriff’s Deed. At that point,
the rights of junior lienholders and successors to the borrower are
terminated in favor of the holder of the Sheriff’s Certificate of Purchase
leading to the Sheriff’s Deed conveying to that purchaser.

 

It would be most helpful to distinguish the deed is not given in
satisfaction of the indebtedness. Lenders should preserve the right to
collect indebtedness against the land. If the lender agrees to extinguish
the debt, then it cannot foreclose against junior liens or successors. In
this scenario, the value to the owner received in exchange for title is
probably the lender’s agreement not to pursue collection against the
borrower, but without altering the the lender’s rights to pursue collection
against the land using either the mortgage or the judgment. A DIL in this
instance would be given as part of an agreement that the lender will accept
the transfer of the land, in its encumbered present condition, and the
lender will agree not to pursue the judgment debtor for any payment in
addition to the transfer of title. 

 

The lender could also agree not to proceed with the foreclosure [or
execution of the judgment.] Sometimes the value of the land is sufficient
for the lender even though those junior liens are also entitled to payment
at the time of resale.

 

That will not affect the rights, or the lien priorities, of any junior lien
or successor in ownership. The lender should preserve its mortgage and
probably should proceed with the Decree of Foreclosure if the lender needs
to extinguish junior liens or interests. 

 

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