[WSBARP] Deed of Trust deed in lieu

[Paul Neumiller]

Yup.  That’s what I use.


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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Rob Spitzer
Sent: Saturday, February 20, 2021 12:06 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>; cole-gilday at stanwoodlaw.net
Subject: Re: [WSBARP] Deed of Trust deed in lieu

Here’s the provision I include in these situations to protect against any merger arguments:

No Merger.  Notwithstanding the delivery, execution, and recording of the Deed in Lieu, the Loan Documents shall remain in full force and effect, now and hereafter, and the conveyance of Borrower’s interests in the Property to Lender by deed in lieu shall not, in and of itself, constitute a merger of the interests conveyed by the Deed in Lieu with the interests of Lender in the Property under the Loan Documents.  The acceptance by Lender of the Deed in Lieu shall not prejudice, limit, restrict or affect Lender's claim of priority under the Loan Documents over any other liens, claims, or encumbrances of any kind whatsoever.  Notwithstanding the Covenant Not to Sue set forth below, the parties hereto acknowledge and understand that Lender intends to proceed to trustee’s sale with its existing foreclosure action in order to clear title to the Property of intervening and subordinated encumbrances and is not thereby releasing its security interest in the Property or any other property subject to the Deed of Trust.

There’s plenty of case law confirming that there’s no merger where the Deed in Lieu is unambiguous that merger is not intended.

Rob

Rob Spitzer
Lawyer

Foster Garvey PC
Tel: 206.816.1316
rob.spitzer at foster.com<mailto:rob.spitzer at foster.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 Rob Bartlett
Sent: Friday, February 19, 2021 4:40 PM
To: cole-gilday at stanwoodlaw.net<mailto:cole-gilday at stanwoodlaw.net>; WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] Deed of Trust deed in lieu

Interesting approach, but doesn’t the merger doctrine merge the deed of trust into the deed in lieu of foreclosure?

--Rob

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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of Robert R. Cole
Sent: Friday, February 19, 2021 4:33 PM
To: Rob Spitzer <robert.spitzer at foster.com<mailto:robert.spitzer at foster.com>>; WSBA Probate & Trust Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] Deed of Trust deed in lieu


Thanks Rob -- that makes sense.

Very Truly Yours,
Robert R. Cole
Law Office of Cole & Gilday, P.C.

10101 - 270th St. NW
Stanwood, WA 98292
(360) 629-2900 (Telephone)
(360) 629-0220 (Fax)

This message contains confidential and privileged information that is intended only for the named recipient(s).  Unless you are the named recipient or authorized agent thereof, you are prohibited from reading, copying, distributing or otherwise disseminating such information.  If you receive this communication in error, please notify the sender immediately.

On 2/19/2021 4:11 PM, Rob Spitzer wrote:
Hi Bob,

In the Deed in Lieu of Foreclosure, you can convey all rights to the fee of the property in consideration for an agreement not to pursue personal liability on the note secured, and expressly state that the deed of trust is not being reconveyed and the promissory note is not being cancelled.   After filing the Deed in Lieu, you can subsequently foreclose the Deed of Trust.  If you need to clear title quickly, contact the junior lienholders and ask if they want a small payment in exchange for the reconveyance of their deeds of trust, to avoid the time and expense of a foreclosure.   If there are a lot of junior liens or can’t negotiate reasonably priced reconveyances, you then need to foreclose to clear title.

Rob


Rob Spitzer
Lawyer

Foster Garvey PC
Tel: 206.816.1316
rob.spitzer at foster.com<mailto:rob.spitzer at foster.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 Robert R. Cole
Sent: Friday, February 19, 2021 12:13 PM
To: WSBA Probate & Trust Listserv <wsbarp at lists.wsbarppt.com><mailto:wsbarp at lists.wsbarppt.com>
Subject: [WSBARP] Deed of Trust deed in lieu


If a noteholder takes a deed in lieu, is there a mechanism to get rid of underlying subordinate liens???
--

Very Truly Yours,
Robert R. Cole
Law Office of Cole & Gilday, P.C.

10101 - 270th St. NW
Stanwood, WA 98292
(360) 629-2900 (Telephone)
(360) 629-0220 (Fax)

This message contains confidential and privileged information that is intended only for the named recipient(s).  Unless you are the named recipient or authorized agent thereof, you are prohibited from reading, copying, distributing or otherwise disseminating such information.  If you receive this communication in error, please notify the sender immediately.

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