[WSBARP] Deed of trust and foreclosure

[Timothy Lehr]

Real Estate attorneys,

 

PC owned real property with a mortgage and deed of trust securing the debt.
PC subsequently took out a line of credit on the real property, signed a
Bank Equity Maximizer Agreement (line of credit agreement), and equity
lender secured debt with deed of trust on same property (inferior to first
mortgage). 

PC then defaults on first mortgage and property is eventually foreclosed and
sold at trustee's sale. Bank buys the property at the trustee's sale then
sells it to third party. Both deeds of trust are wiped out, but PC still has
this Equity Agreement and has been paying on it.

 

PCs question is whether he is still required to pay on the line of credit.
It has not yet been paid off. The agreement and deed of trust seem to be
silent on this point. My assumption is the lender could still enforce the
agreement that was signed even though the security instrument has been
removed from the property. I also assume this situation comes up pretty
regularly, but it's my first time looking into it. Any thoughts are
appreciated. 

 

Tim

 

Timothy C. Lehr

Attorney at Law

Stiles Law Inc., P.S.

 

p:   360.855.0131

e:   timothy at stileslaw.com <mailto:timothy at stileslaw.com> 

w:  www.stileslaw.com <http://www.stileslaw.com> 

 

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