<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:m="http://schemas.microsoft.com/office/2004/12/omml" xmlns="http://www.w3.org/TR/REC-html40">
<head>
<meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1">
<meta name="Generator" content="Microsoft Word 15 (filtered medium)">
<style><!--
/* Font Definitions */
@font-face
{font-family:"Cambria Math";
panose-1:2 4 5 3 5 4 6 3 2 4;}
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
@font-face
{font-family:"Bella Donna";
panose-1:3 0 5 2 3 6 4 3 0 3;}
@font-face
{font-family:"TypoUpright BT";
panose-1:3 2 7 2 3 8 7 5 7 5;}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0in;
margin-bottom:.0001pt;
font-size:11.0pt;
font-family:"Calibri",sans-serif;}
a:link, span.MsoHyperlink
{mso-style-priority:99;
color:blue;
text-decoration:underline;}
a:visited, span.MsoHyperlinkFollowed
{mso-style-priority:99;
color:purple;
text-decoration:underline;}
p.msonormal0, li.msonormal0, div.msonormal0
{mso-style-name:msonormal;
mso-margin-top-alt:auto;
margin-right:0in;
mso-margin-bottom-alt:auto;
margin-left:0in;
font-size:12.0pt;
font-family:"Times New Roman",serif;}
span.EmailStyle18
{mso-style-type:personal;
font-family:"Times New Roman",serif;
color:windowtext;
font-weight:normal;
font-style:normal;}
span.EmailStyle19
{mso-style-type:personal-reply;
font-family:"Calibri",sans-serif;
color:blue;
font-weight:normal;
font-style:normal;
text-decoration:none none;}
.MsoChpDefault
{mso-style-type:export-only;
font-size:10.0pt;}
@page WordSection1
{size:8.5in 11.0in;
margin:1.0in 1.0in 1.0in 1.0in;}
div.WordSection1
{page:WordSection1;}
--></style><!--[if gte mso 9]><xml>
<o:shapedefaults v:ext="edit" spidmax="1026" />
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext="edit">
<o:idmap v:ext="edit" data="1" />
</o:shapelayout></xml><![endif]-->
</head>
<body lang="EN-US" link="blue" vlink="purple">
<div class="WordSection1">
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue">Thanks Rob for raising this issue. I do a lot of probates, and for the past few years, whenever I have an underwater home in the probate and the PR has decided to let it go back to the bank, the
bank has done a judicial foreclosure. Is this because they are not able to foreclose under the nonjudicial foreclosure statutes because of the notice requirements? Or is it because a foreclosure involving a deceased homeowner is in more jeopardy of being
challenged by the heirs? <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue">One would think lenders would continue to foreclose nonjudicially. Most lenders do not file a notice to creditors, even when we give them notice, so they will not be able to obtain a deficiency
judgment, and they will avoid the redemption period (although they will probably avoid it anyway because the property would be considered abandoned). I’m curious as to why lenders opt to spend the additional bucks to go the judicial route.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue">I just had an experience where the lender agreed to accept a Deed In Lieu (DIL), and even agreed to accept my Specialty Warranty Deed form. However, when I told them the PR would not sign the indemnification
and warranty and representation affidavit and agreements that accompanied the package, they declined to accept the DIL. Which to me makes no sense, because they had their title commitment showing there were no downstream encumbrances they had to be concerned
over, they had not filed a claim, even though we sent them a notice to creditor, and the claim period is expired, and after completion of the judicial foreclosure they will be in exactly the same position they would be now if they accepted the DIL. I am scratching
my head as to why they chose that route.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue">I’m also wondering if there is any reason I should not close the probate, even if the judicial foreclosure is ongoing? And, if I do, does that mean the lender cannot continue with the action until
they appoint their own PR? <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue"><o:p> </o:p></span></p>
<div>
<p class="MsoNormal"><i><span style="font-size:18.0pt;font-family:"TypoUpright BT";color:blue">Jeanne</span></i><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue">
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><i><span style="font-size:18.0pt;font-family:"TypoUpright BT";color:blue">Jeanne J.</span></i></b><b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue">
</span></i></b><b><i><span style="font-size:18.0pt;font-family:"Bella Donna";color:blue">Dawes<o:p></o:p></span></i></b></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">Attorney at Law</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">Gore & Grewe, P.S.</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">103 E. Indiana Avenue, Suite A</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">Spokane, WA 99207-2317</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">Voice: 509-326-7500</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">Fax: 509-326-7503</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue"><a href="mailto:jjdawes@goregrewe.com">jjdawes@goregrewe.com</a></span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue"><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">INFORMATION CONTAINED IN THIS E-MAIL TRANSMISSION IS PRIVILEGED AND CONFIDENTIAL. </span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue">
</span><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue"><o:p></o:p></span></p>
</div>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue"><o:p> </o:p></span></p>
<div>
<div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b>From:</b> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>Rob Wilson-Hoss<br>
<b>Sent:</b> Monday, February 01, 2016 11:22 AM<br>
<b>To:</b> 'WSBA Real Property Listserv' <wsbarp@lists.wsbarppt.com><br>
<b>Subject:</b> [WSBARP] Judicial foreclosures and HOAs<o:p></o:p></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"> I just want to introduce this topic and see if anyone else cares. I represent many HOAs and some condos and coops. This means many interactions with lenders around
nonpayment of both loans and association fees. These days, lenders are filing more judicial foreclosures to address dead borrowers and other difficult issues. That is their choice. But they almost always name the association as a defendant, and claim, and
seek relief about, extinguishing all rights of defendants.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"> This is absurd, as a bank judicial foreclosure of a deed of trust in a covenanted community cannot (usually) extinguish the application of the covenants to the
property. Certainly one issue is priority, bank loan to association delinquency, and that is a complicated issue involving the form of the association (condo or HOA/coop); if a HOA/coop, the language of the governing documents; and so on. Putting priority
and payment issues aside, there are very likely a whole lot of other very important rights that associations and members of associations have in property that is being foreclosed, including the rights to the property condition and behavioral covenants, for
example.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"> For a lender to file a complaint and serve it on an association that seeks to extinguish those rights is, well, not something they teach in law school. Of course,
my release date from law school was 1978, so things may have changed. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"> So, who cares? First, there is a difference between associations with lawyers who call the banks on these complaints, and insist on a dismissal and judgment language
that excepts covenant rights; and smaller (usually) associations that just ignore these lawsuits. But if the association is sued and is defaulted, then the judgment is going to say that all of its rights are extinguished. Never mind the mess that needs to
get unwound around unknown persons claiming rights being served by publication - I doubt that this can reach the individual members who usually have individual rights to enforce covenants, because they are known, and without service the judgment is void against
them for want of jurisdiction. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"> I guess I care because these things mess up the record for the lots foreclosed and sold.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"> I will say that the bank lawyers I have dealt with about these issues typically agree, agree to a dismissal, and usually include language in the judgment that
excepts the association, although not always. Twice I have had to make them go back and change the judgment to except the association from the general language extinguishing all other liens or encumbrances.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"> Second, if an association is not prior, such as a condo or HOA without priority language, why should the association have to pay for an hour or two of its lawyer
messing around with this to get the lender to do what it should have done in the beginning? And then following it to the end to make sure the judgment is what it is supposed to be? I suppose I could send out a CR 11 warning right away and let them take care
of it directly, but that sounds like it would be more work in the long run, in most cases; and very unfriendly as well.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"> Anyone else care? Anyone? Buehler?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif">Rob
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal" style="text-autospace:none"><span style="font-size:14.0pt;font-family:"Times New Roman",serif">Robert D. Wilson-Hoss
<br>
Hoss & Wilson-Hoss, LLP <br>
236 West Birch Street <br>
Shelton, WA 98584 <br>
360 426-2999<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"><a href="www.hossandwilsonhoss.com">www.hossandwilson-hoss.com</a><br>
<a href="mailto:rob@hctc.com">rob@hctc.com</a></span><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal" style="text-autospace:none"><i><span style="font-family:"Times New Roman",serif">This message is intended solely for the use of the addressee and may contain information that is privileged, confidential, and exempt from disclosure under
applicable law. If you are not the addressee, you are hereby notified that any use, distribution, or copying of this message is strictly prohibited. If you received this message in error, please notify us by reply e-mail or by telephone (call us collect
at the number listed above) and immediately delete this message and any and all of its attachments. Thank you.<o:p></o:p></span></i></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Times New Roman",serif;text-transform:uppercase">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.
</span></b><span style="font-size:10.0pt;font-family:"Times New Roman",serif">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.</span><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
</body>
</html>