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<p class="MsoNormal"><span style="color:#1F497D">Rod--I just went through this rigamorale under similar circumstances. It's a thicket and the exact procedure and exact state of the judgment are critical. I think there is a gap in the law and the case law on
this point, also, where it's unresolved.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">If a living Borrower redeems, they are restored to ownership of the property, but the deficiency judgment – like any other personal judgment – automatically attaches to real property owned by the Borrower. So
the redemption clears the <u>mortgage</u> lien, but the deficiency judgment now attaches to the property and the bank can execute on the deficiency judgment, using the execution of judgment procedures rather than mortgage foreclosure procedures.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">A "successor in interest" to a Borrower can redeem. If such a successor redeems, the successor receives an estate that is derived from the
<u>Borrower's</u> estate; the successor can receive no greater estate than what the Borrower had, and subject to the encumbrances of the Borrower that attach to it. The case law on this point is from a situation where the successor-in-interest received a quitclaim
deed from a living Borrower, rather than receiving the interest by intestacy. And it says, if you're successor to the Borrower and you redeem, you take subject to any deficiency judgment owed by the Borrower--the deficiency judgment essentially attaches to
the property in the theoretical instant when the redemption reinstates the Borrower's interest (which then passes to the successor).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">HOWEVER, here, the Borrower has been dead for more than two years. All monetary claims against a decedent are barred 24 months after date of death. RCW 11.40.051. Case law indicates that a bank that fails to
file a Creditor Claim is barred from pursuing a deficiency judgment against a decedent. The bank can still foreclose of course, but is limited to the collateral.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">So now what? I don't know. What is the effect of a judgment against a Borrower that is entered by the court more than two years after date of death? Does the judgment even attach to the real property when the
debt itself is already barred (if it is)? <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">What does it mean to name the "Estate" as the judgment debtor? Does that mean it is a post-death debt that is not affected by the 24-month bar? But the amount owed was definitely a debt of the decedent while
living, not a debt incurred by the Estate, so it should be barred.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">The lawsuit named "heirs and devisees" as defendants, but the judgment does not mention them. I dunno how that affects the situation either.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Excerpts from my prior research:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">"Former RCW 6.24.130 [now, RCW 6.23.010] requires that a successor in interest succeed to the judgment debtor's interest in the property [in order to redeem]."
<u>Fidelity Mut. Sav. Bank v. Mark</u>, 112 Wn.2d 47, 767 P.2d 1382 (1989). <u>Accord</u>,
<u>Capital Inv. Corp. of Wash. v. King County</u>, 112 Wn.App. 216, 47 P.3d 161 (2002) (a redemptioner by virtue of a judgment lien cannot assign the right to redeem separate from its judgment, but must assign the judgment itself in order for the assignee to
have redemption rights as the assignor redemptioner's successor in interest). An heir at law's interest in a decedent's real property automatically vests in her/his interest at the death of the ancestor. RCW 11.04.250. Thus, an heir at law is eligible to redeem.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Multiple heirs at law stand as equal tenants in common to the property. One cotenant may redeem a property from foreclosure on a common debt, and takes on behalf of all, subject to a right of reimbursement from
the other cotenants. <u>Dwight v. Waldron</u>, 96 Wn. 156, 164 P. 761 (1917); <u>
McSorley v. Lindsay</u>, 62 Wn. 203, 113 P. 267 (1911).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">If a judgment debtor or her/his successor in interest redeems, there is a specific effect when the foreclosure is of a mortgage lien. The effect of the foreclosure sale is to strip off the mortgage lien – but
if the mortgage holder has a deficiency judgment, then the general judgment lien re-attaches to the real property once it is redeemed.
<u>Damascus Milk Company v. Morriss</u>, 1 Wn.App. 501, 463 P.2d 212 (1969). <u>Damascus</u> at 507-509 specifically distinguishes earlier case law which has language making no distinction between these two qualities of lien, distinguishing
<u>Bollong v. Corman</u>, 125 Wn. 441, 217 P. 27 (1923) and <u>De Roberts v. Stiles</u>, 24 Wn. 611, 64 P. 795 (1901).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><u><span style="color:#1F497D">Damascus</span></u><span style="color:#1F497D"> at 504 also cites
<u>Ford v. Nokomis State Bank</u>, 135 Wn. 37, 237 P. 314 (1925) for the proposition that, if the judgment debtor or his grantee redeems, "sufficient of the lien is revived" to allow resale to satisfy the deficiency. The same distinguishing feature outlined
in <u>Damascus</u> would appear to apply to <u>Ford</u> as well as <u>Bollong</u> and
<u>De Roberts</u>.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">The early case law also relies upon specific language in former RCW 6.24.160 stating that "If the judgment debtor redeem, the effect of the sale is terminated and he is restored to his estate." This language
was deleted by laws of 1987, chapter 442, section 706 (and recodified per section 1121, now RCW 6.23.160). An echo of this language does remain in RCW 6.23.040(2), which specifies that the judgment debtor may redeem from a redemptioner who already has redeemed
from the bidder (or another redemptioner), in which case "the effect of the sale is terminated and the estate of the debtor is restored." But that statute on its face applies only to redemption from a redemptioner, not redemption from the original bidder.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">However, if a mortgage holder has elected to waive a deficiency judgment in order to shorten the redemption period from one year to eight months, RCW 6.23.020(1), then there is no deficiency judgment that can
re-attach to the property after redemption. I have found no case law on this proposition, though it seems obvious–no deficiency judgment, therefore no judgment that could attach to the property. As stated in
<u>Damascus</u>, the effect of the foreclosure sale is, "I now advise you of the value I placed upon the land; you may annul my interest and clear your title in the land by repayment of the amount of the purchase price, subject nevertheless, to the lien of
my judgment against you personally." Id. at 507. Except, where deficiency judgment has been waived, the mortgage holder has waived the personal judgment.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Sincerely,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Eric<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Eric C. Nelsen<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">SAYRE LAW OFFICES, PLLC<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">1320 University St<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Seattle WA 98101-2837<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">phone 206-625-0092<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">fax 206-625-9040<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>Rod Harmon<br>
<b>Sent:</b> Monday, February 22, 2016 11:37 AM<br>
<b>To:</b> 'WSBA Real Property Listserv'<br>
<b>Subject:</b> [WSBARP] redemption<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">A Borrower dies intestate leaving one heir. Title vests in heir at time of death. RCW 11.04.250. There is no probate of the estate. Four years after death, Bank judicially forecloses deed of trust, naming Estate of Borrower and Borrower’s
heirs and devisees as defendants, and obtains judgment against “Estate of Borrower and the real property.” At the sheriff’s auction, Bank bids half the amount of its judgment, but is outbid.
<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">If the heir redeems, does the heir take free of the lien for the unsatisfied judgment?<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:13.0pt;font-family:"Arial","sans-serif";color:#1F497D">Rod Harmon</span><o:p></o:p></p>
<p class="MsoNormal"><b><span style="font-size:13.0pt;font-family:"Arial","sans-serif";color:#1F497D"> </span></b><o:p></o:p></p>
<p class="MsoNormal"><b><span style="font-size:13.0pt;font-family:"Arial","sans-serif";color:#1F497D">RODNEY T. HARMON</span></b><o:p></o:p></p>
<p class="MsoNormal"><b><span style="font-family:"Arial","sans-serif";color:#1F497D"> Attorney at Law</span></b><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D"> P.O. Box 1066</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D"> Bothell, WA 98041</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D"> Tel: (425) 402-7800</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D"> Fax: (425) 458-9096</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D"> <a href="http://www.rodharmon.com">www.rodharmon.com</a></span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D"> <a href="mailto:rodharmon@msn.com">rodharmon@msn.com</a></span><o:p></o:p></p>
<p class="MsoNormal" style="margin-top:6.0pt"><o:p> </o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
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