BILL REQ. #: H-3989.3
_____________________________________________
HOUSE BILL 2562
_____________________________________________| State of Washington | 60th Legislature | 2008 Regular Session |
By Representative UpthegrovePrefiled 01/08/08. Read first time 01/14/08. Referred to Committee on Judiciary.
AN ACT Relating to foreclosures on deeds of trust; and amending RCW
61.24.040, 61.24.060, 61.24.140, and 61.24.005.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 61.24.040 and 1998 c 295 s 5 are each amended to read
as follows:
A deed of trust foreclosed under this chapter shall be foreclosed
as follows:
(1) At least ninety days before the sale, the trustee shall:
(a) Record a notice in the form described in ((RCW
61.24.040(1)(f))) (g) of this subsection in the office of the auditor
in each county in which the deed of trust is recorded;
(b) To the extent the trustee elects to foreclose its lien or
interest, or the beneficiary elects to preserve its right to seek a
deficiency judgment against a borrower or grantor under RCW
61.24.100(3)(a), and if their addresses are stated in a recorded
instrument evidencing their interest, lien, or claim of lien, or an
amendment thereto, or are otherwise known to the trustee, cause a copy
of the notice of sale described in ((RCW 61.24.040(1)(f))) (g) of this
subsection to be transmitted by both first class and either certified
or registered mail, return receipt requested, to the following persons
or their legal representatives, if any, at such address:
(i) The borrower and grantor;
(ii) The beneficiary of any deed of trust or mortgagee of any
mortgage, or any person who has a lien or claim of lien against the
property, that was recorded subsequent to the recordation of the deed
of trust being foreclosed and before the recordation of the notice of
sale;
(iii) The vendee in any real estate contract, the lessee in any
lease, or the holder of any conveyances of any interest or estate in
any portion or all of the property described in such notice, if that
contract, lease, or conveyance of such interest or estate, or a
memorandum or other notice thereof, was recorded after the recordation
of the deed of trust being foreclosed and before the recordation of the
notice of sale;
(iv) The last holder of record of any other lien against or
interest in the property that is subject to a subordination to the deed
of trust being foreclosed that was recorded before the recordation of
the notice of sale; and
(v) The last holder of record of the lien of any judgment
subordinate to the deed of trust being foreclosed; ((and
(vi))) (c) Serve a copy of the notice of sale described in (g) of
this subsection on the occupants and tenants of property consisting
solely of a single-family residence, or a condominium, cooperative, or
other dwelling unit in a multiplex or other building ((containing fewer
than five residential units)), whether or not the ((occupant's))
occupant or tenant has a rental agreement ((is recorded)), which notice
may be a single notice addressed to "occupants" or "tenants" for each
unit known to the trustee or beneficiary;
(((c))) (d) Cause a copy of the notice of sale described in ((RCW
61.24.040(1)(f))) (g) of this subsection to be transmitted by both
first class and either certified or registered mail, return receipt
requested, to the plaintiff or the plaintiff's attorney of record, in
any court action to foreclose a lien or other encumbrance on all or any
part of the property, provided a court action is pending and a lis
pendens in connection therewith is recorded in the office of the
auditor of any county in which all or part of the property is located
on the date the notice is recorded;
(((d))) (e) Cause a copy of the notice of sale described in ((RCW
61.24.040(1)(f))) (g) of this subsection to be transmitted by both
first class and either certified or registered mail, return receipt
requested, to any person who has recorded a request for notice in
accordance with RCW 61.24.045, at the address specified in such
person's most recently recorded request for notice;
(((e))) (f) Cause a copy of the notice of sale described in ((RCW
61.24.040(1)(f))) (g) of this subsection to be posted in a conspicuous
place on the property((, or in lieu of posting, cause a copy of said
notice to be served upon any occupant of the property));
(((f))) (g) The notice shall be in substantially the following
form:
NOTICE OF TRUSTEE'S SALE
I.
NOTICE IS HEREBY GIVEN that the undersigned Trustee will on the . . . .
day of . . . . . ., . . ., at the hour of . . . . o'clock . . . . M. at
. . . . . . . . . . . . . . . . . . . . . . . . . . . . [street
address and location if inside a building] in the City of . . . . . .,
State of Washington, sell at public auction to the highest and best
bidder, payable at the time of sale, the following described real
property, situated in the County(ies) of . . . . . ., State of
Washington, to-wit:
[If any personal property is to be included in the trustee's
sale, include a description that reasonably identifies such
personal property]
which is subject to that certain Deed of Trust dated . . . . . .,
. . ., recorded . . . . . ., . . ., under Auditor's File No. . . . .,
records of . . . . . . County, Washington, from . . . . . . . . ., as
Grantor, to . . . . . . . . ., as Trustee, to secure an obligation in
favor of . . . . . . . . ., as Beneficiary, the beneficial interest in
which was assigned by . . . . . . . . ., under an Assignment recorded
under Auditor's File No. . . . . [Include recording information for
all counties if the Deed of Trust is recorded in more than one county.]
II.
No action commenced by the Beneficiary of the Deed of Trust is now
pending to seek satisfaction of the obligation in any Court by reason
of the Borrower's or Grantor's default on the obligation secured by the
Deed of Trust.
[If there is another action pending to foreclose other security
for all or part of the same debt, qualify the statement and
identify the action.]
III.
The default(s) for which this foreclosure is made is/are as follows:
[If default is for other than payment of money, set forth the
particulars]
Failure to pay when due the following amounts which are now in arrears:
IV.
The sum owing on the obligation secured by the Deed of Trust is:
Principal $ . . . . . ., together with interest as provided in the note
or other instrument secured from the . . . . day of . . . . . ., . . .,
and such other costs and fees as are due under the note or other
instrument secured, and as are provided by statute.
V.
The above-described real property will be sold to satisfy the expense
of sale and the obligation secured by the Deed of Trust as provided by
statute. The sale will be made without warranty, express or implied,
regarding title, possession, or encumbrances on the . . . . day of
. . . . . ., . . . The default(s) referred to in paragraph III must be
cured by the . . . . day of . . . . . ., . . . (11 days before the sale
date), to cause a discontinuance of the sale. The sale will be
discontinued and terminated if at any time on or before the . . . . day
of . . . . . ., . . ., (11 days before the sale date), the default(s)
as set forth in paragraph III is/are cured and the Trustee's fees and
costs are paid. The sale may be terminated any time after the . . . .
day of . . . . . ., . . . (11 days before the sale date), and before
the sale by the Borrower, Grantor, any Guarantor, or the holder of any
recorded junior lien or encumbrance paying the entire principal and
interest secured by the Deed of Trust, plus costs, fees, and advances,
if any, made pursuant to the terms of the obligation and/or Deed of
Trust, and curing all other defaults.
VI.
A written notice of default was transmitted by the Beneficiary or
Trustee to the Borrower and Grantor at the following addresses:
| . . . . . . . . . . . . |
| . . . . . . . . . . . . |
| . . . . . . . . . . . . |
by both first class and certified mail on the . . . . day of
. . . . . ., . . ., proof of which is in the possession of the Trustee;
and the Borrower and Grantor were personally served on the . . . . day
of . . . . . ., . . ., with said written notice of default or the
written notice of default was posted in a conspicuous place on the real
property described in paragraph I above, and the Trustee has possession
of proof of such service or posting.
VII.
The Trustee whose name and address are set forth below will provide in
writing to anyone requesting it, a statement of all costs and fees due
at any time prior to the sale.
VIII.
The effect of the sale will be to deprive the Grantor and all those who
hold by, through or under the Grantor of all their interest in the
above-described property.
IX.
Anyone having any objection to the sale on any grounds whatsoever will
be afforded an opportunity to be heard as to those objections if they
bring a lawsuit to restrain the sale pursuant to RCW 61.24.130.
Failure to bring such a lawsuit may result in a waiver of any proper
grounds for invalidating the Trustee's sale.
[Add Part X to this notice if applicable under RCW 61.24.040(9)]
[Acknowledgment]
(2) In addition to providing the borrower and grantor the notice of
sale described in ((RCW 61.24.040(1)(f))) subsection (1)(g) of this
section, the trustee shall include with the copy of the notice which is
mailed to the grantor, a statement to the grantor in substantially the
following form:
NOTICE OF FORECLOSURE Pursuant to the Revised Code of Washington, Chapter 61.24 RCW
The attached Notice of Trustee's Sale is a consequence of
default(s) in the obligation to . . . . . ., the Beneficiary of your
Deed of Trust and owner of the obligation secured thereby. Unless the
default(s) is/are cured, your property will be sold at auction on the
. . . . day of . . . . . ., . . .
To cure the default(s), you must bring the payments current, cure
any other defaults, and pay accrued late charges and other costs,
advances, and attorneys' fees as set forth below by the . . . . day of
. . . . . ., . . . [11 days before the sale date]. To date, these
arrears and costs are as follows:
| | | Estimated amount |
| | Currently due | that will be due |
| | to reinstate | to reinstate |
| | on. . . . . | on. . . . . |
| | . . . . . . | . . . . . . |
| | | (11 days before |
| | | the date set |
| | | for sale)
|
| Delinquent payments | |
| from. . . . . . , | | |
| . . . , in the | | |
| amount of | | |
| $. . . . /mo.: | $. . . . | $. . . .
|
| Late charges in | | |
| the total | | |
| amount of: | $. . . . | $. . . . |
| | | | Estimated |
| | | | Amounts |
| Attorneys' fees: | $. . . . | $. . . .
|
| Trustee's fee: | $. . . . | $. . . .
|
| Trustee's expenses: | |
(Itemization)
| | |
| Title report | $. . . . | $. . . . |
| Recording fees | $. . . . | $. . . . |
Service/Posting
of Notices |
$. . . . |
$. . . . |
Postage/Copying
expense |
$. . . . |
$. . . . |
| Publication | $. . . . | $. . . . |
Telephone
charges |
$. . . . | $. . . . |
| Inspection fees | $. . . . | $. . . . |
| . . . . . . | $. . . . | $. . . . |
| . . . . . . | $. . . . | $. . . . |
| TOTALS | $. . . . | $. . . . |
As to the defaults which do not involve payment of money to the
Beneficiary of your Deed of Trust, you must cure each such default.
Listed below are the defaults which do not involve payment of money to
the Beneficiary of your Deed of Trust. Opposite each such listed
default is a brief description of the action necessary to cure the
default and a description of the documentation necessary to show that
the default has been cured.
You may reinstate your Deed of Trust and the obligation secured
thereby at any time up to and including the . . . . day of . . . . . .,
. . . [11 days before the sale date], by paying the amount set forth or
estimated above and by curing any other defaults described above. Of
course, as time passes other payments may become due, and any further
payments coming due and any additional late charges must be added to
your reinstating payment. Any new defaults not involving payment of
money that occur after the date of this notice must also be cured in
order to effect reinstatement. In addition, because some of the
charges can only be estimated at this time, and because the amount
necessary to reinstate may include presently unknown expenditures
required to preserve the property or to comply with state or local law,
it will be necessary for you to contact the Trustee before the time you
tender reinstatement so that you may be advised of the exact amount you
will be required to pay. Tender of payment or performance must be made
to: . . . . . ., whose address is . . . . . ., telephone ( )
. . . . . . AFTER THE . . . . DAY OF . . . . . ., . . ., YOU MAY NOT
REINSTATE YOUR DEED OF TRUST BY PAYING THE BACK PAYMENTS AND COSTS AND
FEES AND CURING THE OTHER DEFAULTS AS OUTLINED ABOVE. In such a case,
you will only be able to stop the sale by paying, before the sale, the
total principal balance ($ . . . . . .) plus accrued interest, costs
and advances, if any, made pursuant to the terms of the documents and
by curing the other defaults as outlined above.
You may contest this default by initiating court action in the
Superior Court of the county in which the sale is to be held. In such
action, you may raise any legitimate defenses you have to this default.
A copy of your Deed of Trust and documents evidencing the obligation
secured thereby are enclosed. You may wish to consult a lawyer. Legal
action on your part may prevent or restrain the sale, but only if you
persuade the court of the merits of your defense.
The court may grant a restraining order or injunction to restrain
a trustee's sale pursuant to RCW 61.24.130 upon five days notice to the
trustee of the time when, place where, and the judge before whom the
application for the restraining order or injunction is to be made.
This notice shall include copies of all pleadings and related documents
to be given to the judge. Notice and other process may be served on
the trustee at:
If you do not reinstate the secured obligation and your Deed of
Trust in the manner set forth above, or if you do not succeed in
restraining the sale by court action, your property will be sold. The
effect of such sale will be to deprive you and all those who hold by,
through or under you of all interest in the property;
(3) In addition, the trustee shall cause a copy of the notice of
sale described in ((RCW 61.24.040(1)(f) ()) subsection (1)(g) of this
section, excluding the acknowledgment(())), to be published in a legal
newspaper in each county in which the property or any part thereof is
situated, once on or between the thirty-fifth and twenty-eighth day
before the date of sale, and once on or between the fourteenth and
seventh day before the date of sale;
(4) On the date and at the time designated in the notice of sale,
the trustee or its authorized agent shall sell the property at public
auction to the highest bidder. The trustee may sell the property in
gross or in parcels as the trustee shall deem most advantageous;
(5) The place of sale shall be at any designated public place
within the county where the property is located and if the property is
in more than one county, the sale may be in any of the counties where
the property is located. The sale shall be on Friday, or if Friday is
a legal holiday on the following Monday, and during the hours set by
statute for the conduct of sales of real estate at execution;
(6) The trustee may for any cause the trustee deems advantageous,
continue the sale for a period or periods not exceeding a total of one
hundred twenty days by a public proclamation at the time and place
fixed for sale in the notice of sale or, alternatively, by giving
notice of the time and place of the postponed sale in the manner and to
the persons specified in ((RCW 61.24.040)) subsection (1)(b), (c), (d),
((and)) (e), and (f) of this section and publishing a copy of such
notice once in the newspaper(s) described in ((RCW 61.24.040))
subsection (3) of this section, more than seven days before the date
fixed for sale in the notice of sale. No other notice of the postponed
sale need be given;
(7) The purchaser shall forthwith pay the price bid and on payment
the trustee shall execute to the purchaser its deed; the deed shall
recite the facts showing that the sale was conducted in compliance with
all of the requirements of this chapter and of the deed of trust, which
recital shall be prima facie evidence of such compliance and conclusive
evidence thereof in favor of bona fide purchasers and encumbrancers for
value, except that these recitals shall not affect the lien or interest
of any person entitled to notice under ((RCW 61.24.040)) subsection (1)
of this section, if the trustee fails to give the required notice to
such person. In such case, the lien or interest of such omitted person
shall not be affected by the sale and such omitted person shall be
treated as if such person was the holder of the same lien or interest
and was omitted as a party defendant in a judicial foreclosure
proceeding;
(8) The sale as authorized under this chapter shall not take place
less than one hundred ninety days from the date of default in any of
the obligations secured((.));
(9) If the trustee elects to foreclose the interest of any occupant
or tenant of property comprised solely of a single-family residence, or
a condominium, cooperative, or other dwelling unit in a multiplex or
other building ((containing fewer than five residential units)),
contact information for obtaining purchaser contact information, as
well as an address to which occupants and tenants shall continue to
send lease payments after the sale until notified differently by the
purchaser, must be provided as part of the following notice ((shall))
that must be included as Part X of the Notice of Trustee's Sale:
X. NOTICE TO OCCUPANTS OR TENANTS
For purchaser contact information following trustee sale, contact:
Name:
Address:
Telephone:
Until notified differently by the purchaser, lease payments and other
correspondence after the date of the trustee sale shall be transmitted
to:
Name:
Address:
Telephone:
The purchaser at the trustee's sale is entitled to possession of the
property on the 20th day following the sale, as against the grantor
under the deed of trust (the owner) and anyone having an interest
junior to the deed of trust, ((including)) except for occupants and
tenants who are in compliance with the duties of tenants specified in
RCW 59.18.130 during the time periods outlined within this notice.
((After the 20th day following the sale)) The purchaser has the right
to evict occupants and tenants by summary proceedings under the
unlawful detainer act, chapter 59.12 RCW((.)) as follows:
(1) For an occupant or tenant who at the time of the sale is in
compliance with the duties of tenants specified in RCW 59.18.130 and
who continues to be in compliance with RCW 59.18.130 while occupying
the property: (a) After the one hundred twentieth day following the
sale or the expiration of the lease, whichever occurs first, if the
occupant or tenant has a written or recorded rental agreement; or (b)
after the ninetieth day following the sale if the occupant or tenant
does not have a written or recorded rental agreement; or
(2) For an occupant or tenant who at the time of the sale is not in
compliance with the duties of tenants specified in RCW 59.18.130, after
the twentieth day following the sale;
(10) Only one copy of all notices required by this chapter need be
given to a person who is both the borrower and the grantor. All
notices required by this chapter that are given to a general
partnership are deemed given to each of its general partners, unless
otherwise agreed by the parties.
Sec. 2 RCW 61.24.060 and 1998 c 295 s 8 are each amended to read
as follows:
The purchaser at the trustee's sale shall be entitled to possession
of the property on the twentieth day following the sale, as against the
grantor under the deed of trust and anyone having an interest junior to
the deed of trust, ((including)) except for occupants and tenants((,
who were given all of the notices)) who are in compliance with the
duties of tenants specified in RCW 59.18.130 during the time periods
outlined within the notice to which they were entitled under this
chapter. The purchaser shall also have a right to the summary
proceedings to obtain possession of real property provided in chapter
59.12 RCW except that the purchaser only has the right to evict
occupants and tenants by summary proceedings under chapter 59.12 RCW as
follows:
(1) For an occupant or tenant who at the time of the sale is in
compliance with the duties of tenants specified in RCW 59.18.130 and
who continues to be in compliance with RCW 59.18.130 while occupying
the property: (a) After the one hundred twentieth day following the
sale or the expiration of the lease, whichever occurs first, if the
occupant or tenant has a written or recorded rental agreement; or (b)
after the ninetieth day following the sale if the occupant or tenant
does not have a written or recorded rental agreement; or
(2) For an occupant or tenant who at the time of the sale is not in
compliance with the duties of tenants specified in RCW 59.18.130, after
the twentieth day following the sale.
Sec. 3 RCW 61.24.140 and 1998 c 295 s 16 are each amended to read
as follows:
The beneficiary shall not enforce or attempt to enforce an
assignment of rents by demanding or collecting rent from ((a)) an
occupant or tenant occupying property consisting solely of a single-family residence, or a condominium, cooperative, or other dwelling unit
in a multiplex or other building ((containing fewer than five
residential units)), without first giving the occupant or tenant either
a court order authorizing payment of rent to the beneficiary or a
written consent by the occupant's or tenant's landlord to the payment.
It is a defense to an eviction based on nonpayment of rent that the
occupant or tenant paid the rent due to the beneficiary pursuant to a
court order or a landlord's written consent.
Sec. 4 RCW 61.24.005 and 1998 c 295 s 1 are each amended to read
as follows:
The definitions in this section apply throughout this chapter
unless the context clearly requires otherwise.
(1) "Grantor" means a person, or its successors, who executes a
deed of trust to encumber the person's interest in property as security
for the performance of all or part of the borrower's obligations.
(2) "Beneficiary" means the holder of the instrument or document
evidencing the obligations secured by the deed of trust, excluding
persons holding the same as security for a different obligation.
(3) "Affiliate of beneficiary" means any entity which controls, is
controlled by, or is under common control with a beneficiary.
(4) "Trustee" means the person designated as the trustee in the
deed of trust or appointed under RCW 61.24.010(2).
(5) "Borrower" means a person or a general partner in a
partnership, including a joint venture, that is liable for all or part
of the obligations secured by the deed of trust under the instrument or
other document that is the principal evidence of such obligations, or
the person's successors if they are liable for those obligations under
a written agreement with the beneficiary.
(6) "Guarantor" means any person and its successors who is not a
borrower and who guarantees any of the obligations secured by a deed of
trust in any written agreement other than the deed of trust.
(7) "Commercial loan" means a loan that is not made primarily for
personal, family, or household purposes.
(8) "Trustee's sale" means a nonjudicial sale under a deed of trust
undertaken pursuant to this chapter.
(9) "Fair value" means the value of the property encumbered by a
deed of trust that is sold pursuant to a trustee's sale. This value
shall be determined by the court or other appropriate adjudicator by
reference to the most probable price, as of the date of the trustee's
sale, which would be paid in cash or other immediately available funds,
after deduction of prior liens and encumbrances with interest to the
date of the trustee's sale, for which the property would sell on such
date after reasonable exposure in the market under conditions requisite
to a fair sale, with the buyer and seller each acting prudently,
knowledgeably, and for self-interest, and assuming that neither is
under duress.
(10) "Record" and "recorded" includes the appropriate registration
proceedings, in the instance of registered land.
(11) "Rental agreement" has the same meaning as in RCW 59.18.080.
(12) "Person" means any natural person, or legal or governmental
entity.
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