Passed by the Senate March 11, 2008 YEAS 46   ________________________________________ President of the Senate Passed by the House March 6, 2008 YEAS 93   ________________________________________ Speaker of the House of Representatives | I, Thomas Hoemann, Secretary of the Senate of the State of Washington, do hereby certify that the attached is SUBSTITUTE SENATE BILL 5378 as passed by the Senate and the House of Representatives on the dates hereon set forth. ________________________________________ Secretary | |
Approved ________________________________________ Governor of the State of Washington | Secretary of State State of Washington |
State of Washington | 60th Legislature | 2008 Regular Session |
READ FIRST TIME 02/13/07.
AN ACT Relating to deeds of trust; and amending RCW 61.24.010, 61.24.030, 61.24.040, 61.24.045, 61.24.130, and 61.24.135.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 61.24.010 and 1998 c 295 s 2 are each amended to read
as follows:
(1) The trustee of a deed of trust under this chapter shall be:
(a) Any domestic corporation incorporated under Title 23B, 30, 31,
32, or 33 RCW of which at least one officer is a Washington resident;
or
(b) Any title insurance company authorized to insure title to real
property under the laws of this state, or its agents; or
(c) Any attorney who is an active member of the Washington state
bar association at the time the attorney is named trustee; or
(d) Any professional corporation incorporated under chapter 18.100
RCW, any professional limited liability company formed under chapter
25.15 RCW, any general partnership, including limited liability
partnerships, formed under chapter 25.04 RCW, all of whose
shareholders, members, or partners, respectively, are either licensed
attorneys or entities, provided all of the owners of those entities are
licensed attorneys, or any domestic corporation wholly owned by any of
the entities under this subsection (1)(d); or
(e) Any agency or instrumentality of the United States government;
or
(f) Any national bank, savings bank, or savings and loan
association chartered under the laws of the United States.
(2) The trustee may resign at its own election or be replaced by
the beneficiary. The trustee shall give prompt written notice of its
resignation to the beneficiary. The resignation of the trustee shall
become effective upon the recording of the notice of resignation in
each county in which the deed of trust is recorded. If a trustee is
not appointed in the deed of trust, or upon the resignation,
incapacity, disability, absence, or death of the trustee, or the
election of the beneficiary to replace the trustee, the beneficiary
shall appoint a trustee or a successor trustee. Upon recording the
appointment of a successor trustee in each county in which the deed of
trust is recorded, the successor trustee shall be vested with all
powers of an original trustee.
(3) The trustee or successor trustee shall have no fiduciary duty
or fiduciary obligation to the grantor or other persons having an
interest in the property subject to the deed of trust.
(4) The trustee or successor trustee shall act impartially between
the borrower, grantor, and beneficiary.
Sec. 2 RCW 61.24.030 and 1998 c 295 s 4 are each amended to read
as follows:
It shall be requisite to a trustee's sale:
(1) That the deed of trust contains a power of sale;
(2) That the deed of trust contains a statement that the real
property conveyed is not used principally for agricultural purposes;
provided, if the statement is false on the date the deed of trust was
granted or amended to include that statement, and false on the date of
the trustee's sale, then the deed of trust must be foreclosed
judicially. Real property is used for agricultural purposes if it is
used in an operation that produces crops, livestock, or aquatic goods;
(3) That a default has occurred in the obligation secured or a
covenant of the grantor, which by the terms of the deed of trust makes
operative the power to sell;
(4) That no action commenced by the beneficiary of the deed of
trust is now pending to seek satisfaction of an obligation secured by
the deed of trust in any court by reason of the grantor's default on
the obligation secured: PROVIDED, That (a) the seeking of the
appointment of a receiver shall not constitute an action for purposes
of this chapter; and (b) if a receiver is appointed, the grantor shall
be entitled to any rents or profits derived from property subject to a
homestead as defined in RCW 6.13.010. If the deed of trust was granted
to secure a commercial loan, this subsection shall not apply to actions
brought to enforce any other lien or security interest granted to
secure the obligation secured by the deed of trust being foreclosed;
(5) That the deed of trust has been recorded in each county in
which the land or some part thereof is situated;
(6) That prior to the date of the notice of trustee's sale and
continuing thereafter through the date of the trustee's sale, the
trustee must ((have)) maintain a street address in this state where
personal service of process may be made, and the trustee must maintain
a physical presence and have telephone service at such address; and
(7) That at least thirty days before notice of sale shall be
recorded, transmitted or served, written notice of default shall be
transmitted by the beneficiary or trustee to the borrower and grantor
at their last known addresses by both first class and either registered
or certified mail, return receipt requested, and the beneficiary or
trustee shall cause to be posted in a conspicuous place on the
premises, a copy of the notice, or personally served on the borrower
and grantor. This notice shall contain the following information:
(a) A description of the property which is then subject to the deed
of trust;
(b) Each county in which the deed of trust is recorded and the
document number given to the deed of trust upon recording by each
county auditor or recording officer;
(c) That the beneficiary has declared the borrower or grantor to be
in default, and a concise statement of the default alleged;
(d) An itemized account of the amount or amounts in arrears if the
default alleged is failure to make payments;
(e) An itemized account of all other specific charges, costs, or
fees that the borrower, grantor, or any guarantor is or may be obliged
to pay to reinstate the deed of trust before the recording of the
notice of sale;
(f) The total of (d) and (e) of this subsection, designated clearly
and conspicuously as the amount necessary to reinstate the note and
deed of trust before the recording of the notice of sale;
(g) That failure to cure the alleged default within thirty days of
the date of mailing of the notice, or if personally served, within
thirty days of the date of personal service thereof, may lead to
recordation, transmittal, and publication of a notice of sale, and that
the property described in (a) of this subsection may be sold at public
auction at a date no less than one hundred twenty days in the future;
(h) That the effect of the recordation, transmittal, and
publication of a notice of sale will be to (i) increase the costs and
fees and (ii) publicize the default and advertise the grantor's
property for sale;
(i) That the effect of the sale of the grantor's property by the
trustee will be to deprive the grantor of all their interest in the
property described in (a) of this subsection; and
(j) That the borrower, grantor, and any guarantor has recourse to
the courts pursuant to RCW 61.24.130 to contest the alleged default on
any proper ground.
Sec. 3 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) 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) 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;
(v) The last holder of record of the lien of any judgment
subordinate to the deed of trust being foreclosed; and
(vi) The occupants 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 rental agreement is recorded,
which notice may be a single notice addressed to "occupants" for each
unit known to the trustee or beneficiary;
(c) Cause a copy of the notice of sale described in RCW
61.24.040(1)(f) 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) Cause a copy of the notice of sale described in RCW
61.24.040(1)(f) 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) Cause a copy of the notice of sale described in RCW
61.24.040(1)(f) 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) The notice shall be in substantially the following form:
[If any personal property is to be included in the trustee's sale, include a description that reasonably identifies such personal property]
[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.]
[If default is for other than payment of money, set forth the particulars]
. . . . . . . . . . . . | |
. . . . . . . . . . . . | |
. . . . . . . . . . . . |
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 | $. . . . | $. . . . |
Sec. 4 RCW 61.24.045 and 1985 c 193 s 1 are each amended to read
as follows:
Any person desiring a copy of any notice of sale described in RCW
61.24.040(1)(f) under any deed of trust, other than a person entitled
to receive such a notice under RCW 61.24.040(1) (b) or (c), must, after
the recordation of such deed of trust and before the recordation of the
notice of sale, cause to be filed for record, in the office of the
auditor of any county in which the deed of trust is recorded, a duly
acknowledged request for a copy of any notice of sale. The request
shall be signed and acknowledged by the person to be notified or such
person's agent, attorney, or representative; shall set forth the name,
mailing address, and telephone number, if any, of the person or persons
to be notified; shall identify the deed of trust by stating the names
of the parties thereto, the date the deed of trust was recorded, the
legal description of the property encumbered by the deed of trust, and
the auditor's file number under which the deed of trust is recorded;
and shall be in substantially the following form:
Sec. 5 RCW 61.24.130 and 1998 c 295 s 14 are each amended to read
as follows:
(1) Nothing contained in this chapter shall prejudice the right of
the borrower, grantor, any guarantor, or any person who has an interest
in, lien, or claim of lien against the property or some part thereof,
to restrain, on any proper legal or equitable ground, a trustee's sale.
The court shall require as a condition of granting the restraining
order or injunction that the applicant pay to the clerk of the court
the sums that would be due on the obligation secured by the deed of
trust if the deed of trust was not being foreclosed:
(a) In the case of default in making the periodic payment of
principal, interest, and reserves, such sums shall be the periodic
payment of principal, interest, and reserves paid to the clerk of the
court every thirty days.
(b) In the case of default in making payment of an obligation then
fully payable by its terms, such sums shall be the amount of interest
accruing monthly on said obligation at the nondefault rate, paid to the
clerk of the court every thirty days.
In the case of default in performance of any nonmonetary obligation
secured by the deed of trust, the court shall impose such conditions as
it deems just.
In addition, the court may condition granting the restraining order
or injunction upon the giving of security by the applicant, in such
form and amount as the court deems proper, for the payment of such
costs and damages, including attorneys' fees, as may be later found by
the court to have been incurred or suffered by any party by reason of
the restraining order or injunction. The court may consider, upon
proper showing, the grantor's equity in the property in determining the
amount of said security.
(2) No court may grant a restraining order or injunction to
restrain a trustee's sale unless the person seeking the restraint gives
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. No judge may
act upon such application unless it is accompanied by proof, evidenced
by return of a sheriff, the sheriff's deputy, or by any person eighteen
years of age or over who is competent to be a witness, that the notice
has been served on the trustee.
(3) If the restraining order or injunction is dissolved after the
date of the trustee's sale set forth in the notice as provided in RCW
61.24.040(1)(f), the court granting such restraining order or
injunction, or before whom the order or injunction is returnable,
shall, at the request of the trustee, set a new sale date which shall
be not less than forty-five days from the date of the order dissolving
the restraining order. The trustee shall:
(a) Comply with the requirements of RCW 61.24.040(1) (a) through
(f) at least thirty days before the new sale date; and
(b) Cause a copy of the notice of trustee's sale as provided in RCW
61.24.040(1)(f) to be published in a legal newspaper in each county in
which the property or any part thereof is situated once between the
thirty-fifth and twenty-eighth day before the sale and once between the
fourteenth and seventh day before the sale.
(4) If a trustee's sale has been stayed as a result of the filing
of a petition in federal bankruptcy court and an order is entered in
federal bankruptcy court granting relief from the stay or closing or
dismissing the case, or discharging the debtor with the effect of
removing the stay, the trustee may set a new sale date which shall not
be less than forty-five days after the date of the bankruptcy court's
order. The trustee shall:
(a) Comply with the requirements of RCW 61.24.040(1) (a) through
(f) at least thirty days before the new sale date; and
(b) Cause a copy of the notice of trustee's sale as provided in RCW
61.24.040(1)(f) to be published in a legal newspaper in each county in
which the property or any part thereof is situated, once between the
thirty-fifth and twenty-eighth day before the sale and once between the
fourteenth and seventh day before the sale.
(5) Subsections (3) and (4) of this section are permissive only and
do not prohibit the trustee from proceeding with a trustee's sale
following termination of any injunction or stay on any date to which
such sale has been properly continued in accordance with RCW
61.24.040(6).
(6) The issuance of a restraining order or injunction shall not
prohibit the trustee from continuing the sale as provided in RCW
61.24.040(6).
Sec. 6 RCW 61.24.135 and 1998 c 295 s 15 are each amended to read
as follows:
It is an unfair or deceptive act or practice under the consumer
protection act, chapter 19.86 RCW, for any person, acting alone or in
concert with others, to offer, or offer to accept or accept from
another, any consideration of any type not to bid, or to reduce a bid,
at a sale of property conducted pursuant to a power of sale in a deed
of trust. The trustee may decline to complete a sale or deliver the
trustee's deed and refund the purchase price, if it appears that the
bidding has been collusive or defective, or that the sale might have
been void. However, it is not an unfair or deceptive act or practice
for any person, including a trustee, to state that a property subject
to a recorded notice of trustee's sale or subject to a sale conducted
pursuant to this chapter is being sold in an "as-is" condition, or for
the beneficiary to arrange to provide financing for a particular bidder
or to reach any good faith agreement with the borrower, grantor, any
guarantor, or any junior lienholder.