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The Washington legislature recently amended its laws related to foreclosure in the case of a deceased borrower or an abandoned property, effective June 7, 2018.
The seeking of the appointment of a receiver, or the filing of a civil case to obtain court approval to access, secure, maintain, and preserve property from waste or nuisance, do not constitute an action commencing foreclosure.
At least thirty days before notice of sale is recorded, transmitted or served, written notice of default and, for residential real property, the beneficiary declaration, must 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 must post a copy of the notice in a conspicuous place on the premises or personally serve the notice to the borrower and grantor.
For notices issued after June 30, 2018, the top of the first page of the notice must include:
In the case where the borrower or grantor is known to the mortgage servicer or trustee to be deceased, the required notice must be sent to any spouse, child, or parent of the borrower or grantor known to the trustee or mortgage servicer, and to any owner of record of the property, at any address provided to the trustee or mortgage servicer, and to the property addressed to the heirs and devisees of the borrower. If the name or address of any spouse, child, or parent of such deceased borrower or grantor cannot be ascertained with use of reasonable diligence, the trustee must execute and record with the notice of sale a declaration attesting to the same. Reasonable diligence means the trustee must search in the county where the property is located, the public records and information for any obituary, will, death certificate, or case in probate within the county for the borrower and grantor. Upon written notice identifying the property address and the name of the borrower to the servicer or trustee by someone claiming to be a successor in interest to the borrower's or grantor's property rights, but who is not a party to the loan or promissory note or other obligation secured by the deed of trust, a trustee shall not record a notice of sale until the trustee or mortgage servicer completes the following:
If a borrower or grantor is deceased, a notice of sale must be transmitted by both first-class and either certified or registered mail to any spouse, child, or parent of the borrower or grantor, at the addresses discovered by the trustee.
In addition to all other indexing requirements, the Notice of Sale must clearly indicate on the first page the following information, which the auditor will index:
The above provisions do not:
In the case where no successor in interest has been established, and neither the beneficiary nor the trustee are able to ascertain the name and address of any spouse, child, or parent of the borrower or grantor, then the trustee may, in addition to mailing notice to the property addressed to the unknown heirs and devisees of the grantor, serve the notice of sale by publication in a newspaper of general circulation in the county or city where the property is located once per week for three consecutive weeks. Upon this service by publication, to be completed not less than thirty days prior to the date the sale is conducted, all unknown heirs will be deemed served with the notice of sale.
If a servicer or trustee receives notification by someone claiming to be a successor in interest to the borrower or grantor after the recording of the notice of sale, the trustee or servicer must request written documentation within five days demonstrating the ownership interest, provided that, the trustee may, but is not required to, postpone a trustee’s sale upon receipt of such notification by someone claiming to be a successor in interest.
Upon receipt of documentation establishing a claimant as a successor in interest, the servicer must provide such claimant with the loan balance, interest rate and interest reset dates and amounts, balloon payments if any, prepayment penalties if any, the basis for the default, the monthly payment amount, reinstatement amounts or conditions, payoff amounts, and information on how and where payments should be made as well as application materials and information, or a description of the process, necessary to request a loan assumption and modification. Only if the servicer or trustee receives the documentation confirming someone as successor in interest more than forty-five days before the scheduled sale must the servicer then provide such information to the claimant not less than twenty days prior to the sale.
For each notice of trustee’s sale recorded on residential real property, the beneficiary on whose behalf the notice of trustee’s sale has been recorded must remit $325 (previously $250) to the Department of Commerce (“Department”) to be deposited into the foreclosure fairness account. The $325 payment is required for every recorded notice of trustee’s sale for noncommercial loans on residential real property, but does not apply to the recording of an amended notice of trustee’s sale. No later than January 1, 2020, the Department may from time to time adjust the amount of the fee, not to exceed $325, at a sufficient level to defray the costs of the program. Any adjustment to the amount of the fee must be made by rule adopted by the Department.
The revisions also set forth new provisions regarding foreclosure procedures when a trustor under a deed of trust is named as a defendant in an action or proceeding in which that deed of trust is the subject and the foreclosure of a reverse residential mortgage.
Property is “abandoned” when there are no signs of occupancy and at least three of the following indications of abandonment are visible from the exterior:
Property is in "mid-foreclosure" when a notice of default or notice of pre-foreclosure options has been issued or a notice of trustee's sale has been recorded in the office of the county auditor.
Property is a "nuisance" when so determined by a county, city, or town.
A county, city, or town may notify a mortgage servicer that a property has been determined to be abandoned, in mid-foreclosure, and a nuisance. A notice issued to notify a mortgage servicer of this fact must:
A mortgage servicer may contact a county, city, or town regarding a property it believes to be abandoned, and a nuisance and request that a county, city, or town official visit the property and make a determination as to whether the residential real property is abandoned and a nuisance. When making such a request, the mortgage servicer must furnish a copy of a notice of default, notice of pre-foreclosure options, or notice of trustee's sale applicable to the property.
A county, city, or town must respond to such a request within fifteen calendar days of receipt and notify the mortgage servicer:
Upon receipt from a county, city, or town of an affidavit or declaration under penalty of perjury that a property is abandoned, in mid-foreclosure, and a nuisance, a mortgage servicer or its designee may enter the property for the purposes of abating the identified nuisance, preserving property, or preventing waste and may take steps to secure the property, including but not limited to:
The mortgage servicer or its designee must make a record of entry by means of dated and time-stamped photographs showing the manner of entry and personal items visible within the residence upon entry. Neither the mortgage servicer nor its designee may remove personal items from the property unless the items are hazardous or perishable, and in case of such removal must inventory the items removed. Prior to each entry, a mortgage servicer or its designee must ensure that a notice is posted on the front door that includes the following:
Records of entry onto property must be maintained by the mortgage servicer or its designee for at least four years from the date of entry. If, upon entry, the property is found to be occupied, the mortgage servicer or its designee must leave the property immediately, notify the county, city, or town, and thereafter neither the mortgage servicer nor its designee may enter the property regardless of whether the property constitutes a nuisance or complies with local code enforcement standards. In the event a mortgage servicer is contacted by the borrower and notified that the property is not abandoned, the mortgage servicer must so notify the county, city, or town and thereafter neither the mortgage servicer nor its designee may enter the property regardless of whether the property constitutes a nuisance or complies with local code enforcement standards. A county, city, or town is not liable for any damages caused by any act or omission of the mortgage servicer or its designee.
Unless the property is found to be occupied upon entry or the mortgage servicer is contacted by the borrower and notified that the property is not abandoned, if a mortgage servicer receives notice from a county, city, or town that a property is abandoned, in mid-foreclosure, and a nuisance, and the mortgage servicer does not abate the nuisance within the time prescribed by local ordinance, a county, city, or town may exercise its authority to abate the nuisance and recover associated costs.
When a property has been the subject of foreclosure, a county, city or town may notify the grantee of the trustee's deed or sheriff's deed, via certified mail, that a property is a nuisance. Upon receipt of such a notice, the grantee of the trustee's deed or sheriff's deed must respond within fifteen calendar days and provide one of the following responses:
If the grantee of the trustee's deed or sheriff's deed is notified and does not abate the nuisance within the time prescribed by local ordinance, a county, city, or town may abate the nuisance and recover associated costs.
Unless the property is found to be occupied upon entry or the mortgage servicer is contacted by the borrower and notified that the property is not abandoned, if, after issuance of a notice, a nuisance has not been abated within the time prescribed by local ordinance and the county, city, or town has exercised its authority to abate the nuisance, the county, city, or town may recover its costs by levying an assessment on the real property on which the nuisance is situated to reimburse the county, city, or town for the costs of abatement, excluding any associated fines or penalties. This assessment constitutes a lien against the property and is binding upon successors in title only from the date the lien is recorded in the county in which the real property is located. This assessment is of equal rank with state, county, and municipal taxes and is assessed against the real property upon which cost was incurred unless such amount is previously paid.
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