[WSBARP] Need to clear off of title an old (2006) DOT securing Note paid off (in 2010)

Wed Apr 20 16:12:20 PDT 2022

Hi Dwight and list mates,
I have a client with a similar problem.
There were two title problems noted as exceptions to title on a lot my client is trying to sell.
One of which I have solved, without a Quiet Title Action.
The remaining was a  Deed of Trust from 1996 from a Bail Bond company for $10,000.  The “Sid Egley dba Egleys Bail Bonds” appears to long been out of business (mail came back as undeliverable).  Grantor on the DOT was  listed as “JF, divorced from DF” so on it face it was after they divorced.  Obviously, the Defendant (client’s now deceased ex.)  long ago disposed of her criminal case and there is no possibility that a bond company would now have to pay for her failure to appear.  This is tying up a sale of the lot by DF who is alive.  Won’t some title companies write around such a deed of trust without a Quiet Title Action?

Josh

Joshua F. Grant

P. O. Box 619
Wilbur, WA 99185
509 647 5578

From: Dwight Bickel 
Sent: Wednesday, April 20, 2022 2:41 PM
To: WSBA Real Property Listserv 
Subject: Re: [WSBARP] Need to clear off of title an old (2006) DOT securing Note paid off (in 2010)

RCW 61.24.110 offers three methods that might avoid a legal action to obtain quiet title. The choice will depend upon the borrower’s evidence regarding the payoff. I have used (1) and (3) with success. 

If the payoff was done pursuant to a sale or refinance, then there will be escrow records to prove (a) a payoff statement from the beneficiary and (b) payoff sent and received by the beneficiary. Those are requirements for (2) and (3). If you have that evidence, then pursue (3). I have had many successes with that procedure, leading to a recorded Declaration by the escrow, which later title companies accepted to remove the old Deed of Trust. I can help with forms.

(2) has not worked for me yet. Its requirement is to prove the beneficiary provided a payoff statement and received that amount. But the title companies, serving as the Trustee, have not shown the courage to sign a Reconveyance without a signature by the successor beneficiary. I have submitted very clear proof of payment by a prior escrow. In one case, even after the payoff escrow recorded the Declaration of Payment, the title company still refused to sign the Reconveyance. Disappointing, because I led that statutory change as Chair of the Washington Land Title Ass’n and was very surprised when it did not work as designed.

If the payoff was not done pursuant to a payoff statement, then (1) is still a possible method. This has been the only method prior to that statute change. It can be successfully used though, especially if  the title company that is the Trustee is acting as the insurer for the new mortgage, so it has the incentive to incur risk related to the reconveyance. The key is proof that the debt was paid in full, combined with facts that there is no apparent beneficiary, then persuasive advocacy to the right person at the title company. Lastly, the title company acting as Trustee may be more willing to assume risk where the property owner provides an indemnity and has credit to back it.

The statute empowers the Trustee to reconvey upon proof of payoff pursuant to a written request of the property owner. Title companies acting as Trustee are only familiar with reconveying upon written request by the beneficiary. In many circumstances as counsel for the title company, I approved and signed full reconveyances at the request of the beneficiary. 

(1) The trustee of record shall reconvey all or any part of the property encumbered by the deed of trust to the person entitled thereto on written request of the beneficiary, or upon satisfaction of the obligation secured and written request for reconveyance made by the beneficiary or the person entitled thereto.

I sympathize with the tale of inability to get a response from a successor beneficiary, when they have no present records to prove it held the note and received full payoff. Your client may have proof that it was involved, but cannot prove who now holds the note. In one instance, I commenced a legal action against Ocwen seeking an Order requiring it to sign a Request for Reconveyance, simply to get past its computer-driven line of defense protecting a real person from any action. Once it hired a lawyer, I got the Request for Reconveyance. If your client can’t prove it received the payoff, you may as well file the QT action and let the beneficiary(s) allow default.

Good luck!

Dwight A. Bickel

Real Property Title Advisor

Washington Title Professional

Dwight at DwightBickel.com

https:/dwightbickel.com

206-484-1976

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