SHB 2421 -
By Senator Kline
On page 36, after line 10, insert the following:
"Sec. 10 RCW 61.24.010 and 2009 c 292 s 7 are each amended to
read as follows:
(1) The trustee of a deed of trust under this chapter shall be:
(a) Any domestic corporation or domestic limited liability
corporation incorporated under Title 23B, 25, 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 any title insurance agent
licensed under chapter 48.17 RCW; 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. Only 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 has a duty of good faith to
the borrower, beneficiary, and grantor.
Sec. 11 RCW 61.24.050 and 1998 c 295 s 7 are each amended to read
as follows:
((When delivered)) (1) Upon physical delivery of the trustee's deed
to the purchaser, or a different grantee as designated by the purchaser
following the trustee's sale, the trustee's deed shall convey all of
the right, title, and interest in the real and personal property sold
at the trustee's sale which the grantor had or had the power to convey
at the time of the execution of the deed of trust, and such as the
grantor may have thereafter acquired. Except as provided in subsection
(2) of this section, if the trustee accepts a bid, then the trustee's
sale is final as of the date and time of such acceptance if the
trustee's deed is recorded within fifteen days thereafter. After a
trustee's sale, no person shall have any right, by statute or
otherwise, to redeem the property sold at the trustee's sale.
(2)(a) Up to the eleventh day following the trustee's sale, the
trustee, beneficiary, or authorized agent for the beneficiary may
declare the trustee's sale and trustee's deed void for the following
reasons:
(i) The trustee, beneficiary, or authorized agent for the
beneficiary assert that there was an error with the trustee foreclosure
sale process including, but not limited to, an erroneous opening bid
amount made by or on behalf of the foreclosing beneficiary at the
trustee's sale;
(ii) The borrower and beneficiary, or authorized agent for the
beneficiary, had agreed prior to the trustee's sale to a loan
modification agreement, forbearance plan, shared appreciation mortgage,
or other loss mitigation agreement to postpone or discontinue the
trustee's sale; or
(iii) The beneficiary or authorized agent for the beneficiary had
accepted funds that fully reinstated or satisfied the loan even if the
beneficiary or authorized agent for the beneficiary had no legal duty
to do so.
(b) This subsection does not impose a duty upon the trustee any
different than the obligations set forth under RCW 61.24.010 (3) and
(4).
(3) The trustee must refund the bid amount to the purchaser no
later than the third day following the postmarked mailing of the
rescission notice described under subsection (4) of this section.
(4) No later than fifteen days following the voided trustee's sale
date, the trustee shall send a notice in substantially the following
form by first-class mail and certified mail, return receipt requested,
to all parties entitled to notice under RCW 61.24.040(l) (b) through
(e):
NOTICE IS HEREBY GIVEN that the trustee's sale that occurred on
(trustee's sale date) is rescinded and declared void because (insert
the applicable reason(s) permitted under RCW 61.24.050(2)(a)).
The trustee's sale occurred pursuant to that certain Notice of
Trustee's Sale dated . . . ., . . ., recorded . . . ., . . ., under
Auditor's File No. . . ., records of . . . . County, Washington, and
that certain Deed of Trust dated . . . ., . . ., recorded . . . ., . .
., under Auditor's File No. . . ., records of . . . . County,
Washington, from . . . ., as Grantor, to . . . ., as . . . ., as
original Beneficiary, concerning the following described property,
situated in the County(ies) of . . . ., State of Washington, to wit:
Commonly known as (common property address)
(5) If the reason for the rescission stems from subsection (2)(a)
(i) or (ii) of this section, the trustee may set a new sale date not
less than forty-five days following the mailing of the notice of
rescission of trustee's sale. 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 of the property 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."
Renumber the remaining section consecutively and correct any internal references accordingly.
SHB 2421 -
By Senator Kline
On page 1, line 3 of the title, after "61.24.040," strike "and 61.24.172" and insert "61.24.172, 61.24.010, and 61.24.050"
EFFECT: (1) A domestic limited liability corporation incorporated
under specific statutes may be a trustee under the Deeds of Trust Act.
(2) Up to 11 days following the trustee's sale, the trustee,
beneficiary, or authorized agent for the beneficiary may declare the
trustee's sale and trustee's deed void for the following reasons:
(a) The trustee, beneficiary, or authorized agent for the
beneficiary asserts there was an error with the trustee foreclosure
sale process including, but not limited to, an erroneous opening bid
amount made by or on behalf of the foreclosing beneficiary at the
trustee's sale;
(b) Prior to the sale, there was an agreement for a loan
modification, forbearance plan, or other loss mitigation agreement to
postpone or discontinue the trustee's sale; or
(c) The beneficiary or authorized agent accepted funds that fully
reinstated or satisfied the loan even if the beneficiary or authorized
agent had no legal duty to do so.
(3) The trustee is to refund the bid amount to the purchaser.
(4) No later than 15 days following the voided trustee's sale, the
trustee is to send a notice, as proscribed by statute, to all parties
entitled to the notice.
(5) If the rescission is based on an erroneous bid amount or an
agreement to postpone the sale, the trustee may set a new sale date at
least 45 days following the mailing of the notice of rescission of the
trustee's sale.
(6) The trustee is to: Comply with the requirements for holding a
trustee's sale at least 30 days before the new sale date; and publish
the Notice of Trustee's Sale as required by statute.