News & Analysis as of September 23, 2024

Lenders

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Foreclosure is a legal process whereby a lender seeks to force the sale of a mortgaged property in order to recover the balance of a delinquent loan. Recently, the foreclosure process has been the subject of greater legislative and judicial scrutiny after systemic abuses were uncovered during the widespread foreclosure crisis resulting from the Great Recession. less -

Guarantor Liability: Assignment of Note Doesn’t Automatically Assign Guaranty Too

Patton Sullivan Brodehl LLP on 12/28/2023

Obligations reduced to a promissory note are often accompanied by a written guaranty. The law treats the guaranty as an independent obligation. A case recently decided by California’s First District Court of Appeal —...more

Bankruptcy Discharge Does Not Trigger Statute of Limitations on Claim Based on Security Agreement

Sherman & Howard L.L.C. on 5/10/2023

In a recent decision, the Colorado Supreme Court reversed the Colorado Court of Appeals and held that a discharge in bankruptcy does not trigger the statute of limitations on a claim to foreclose based on a deed of trust....more

General Contractors—In a Challenging Economy Beware of the Pitfalls In Subordinating Your Mechanics’ Lien Rights to an Owner’s...

Snell & Wilmer on 2/7/2023

Lenders on commercial real estate projects typically require that the general contractor subordinate its mechanics’ lien rights to the lender’s deed of trust and other financing documents in order to assure the lender that...more

Copper Creek Confirms That Bankruptcy Discharges Have No Effect on the Statute of Limitations in Washington State

Perkins Coie on 3/31/2022

As we previously noted, the statute of limitations on actions to enforce a note or deed of trust can be a brutally effective sword for borrowers in Washington State. Under the six-year limitations period of RCW 7.28.300, a...more

Loan Modifications and Losing Lien Priority

Patton Sullivan Brodehl LLP on 11/29/2021

Modifying a loan can sometimes cause a loss of lien priority. It all depends on the facts underlying the modification, and even the original loan....more

Bar Exam Toolbox Podcast Episode 146: Listen and Learn -- Mortgages and Priority

Law School Toolbox on 9/21/2021

Welcome back to the Bar Exam Toolbox podcast! In today's installment of our "Listen and Learn" series, we're focusing on Real Property. In particular, we're diving into the tricky subtopic of mortgages and priorities. In...more

How a Junior Lien Can Survive Judicial Foreclosure

Patton Sullivan Brodehl LLP on 1/27/2021

Oscar Wilde is quoted for saying—“To expect the unexpected shows a thoroughly modern intellect.” This advice certainly holds true for a senior deed of trust lienholder contemplating foreclosure on real property security. ...more

Ninth Circuit Weighs in on “Preemptive” Challenges to Lender’s Authority to Foreclose

Patton Sullivan Brodehl LLP on 7/31/2020

Can a California real property owner challenge a lender’s authority to foreclose before a foreclosure sale has occurred? It’s looking less likely with each new appellate opinion....more

A Notice of Trustee’s Sale Does Not Necessarily “Disturb Possession”

Patton Sullivan Brodehl LLP on 6/29/2020

Flashback: Five years ago, Money and Dirt covered the Salazar v. Thomas opinion from California’s Fifth District Court of Appeal holding that a Notice of Default does not “disturb possession” sufficiently to start the...more

Rock, Paper, Scissors: Virginia Supreme Court Adopts Partial Subordination Rule to Interpret Subordination Agreements

Rosenberg Martin Greenberg LLP on 2/12/2020

Everyone is familiar with the “Rock, Paper, Scissors” method of resolving disputes where scissors cut paper, paper covers rock, and rock breaks scissors. In Futuri Real Estate, Inc. v. Atlantic Trustee Services, the Virginia...more

Developers Must Explicitly Reserve Construction Right in Phased Condominium Project

Conn Kavanaugh on 6/14/2019

As any seasoned developer knows, condominium development projects involve a delicate interplay between the developer, unit owners, the condo association, and the lenders that fund construction and acquisition costs. Last...more

Not All Deed of Trust Attorney Fee Clauses are Created Equal

Patton Sullivan Brodehl LLP on 11/30/2018

Lenders who prevail on claims arising from a deed of trust can always recover their attorney fees from the losing party as long as the deed of trust says something about fee recovery, right? It’s not that simple....more

I Want to Foreclose But I Can't Find My Note. Do I Have a Problem?

Ward and Smith, P.A. on 11/20/2018

In my last article, I discussed whether inconsistent dates on a promissory note and deed of trust could cause problems in foreclosure. But what if you can't even find the original promissory note? Perhaps it was...more

My Note and Deed of Trust Have Different Dates. Do I Have a Problem?

Ward and Smith, P.A. on 9/27/2018

Consider this scenario: You loan money to a borrower. You intend to secure the loan with a deed of trust encumbering real property. Your borrower signs a promissory note dated November 7, 2006. But your deed of trust is...more

Conflicts of Laws, Deficiency Actions, and Statutes of Limitations – Oh My!

Snell & Wilmer on 5/3/2017

What law governs a deficiency action if the choice-of-law provisions in the note and deed of trust conflict? The Arizona Court of Appeals answered that very question in ZB, N.A. v. Hoeller, No. 1 CA-CV 16-0071 (Ct. App. April...more

Secured Lenders – Stay on Top of the Law or Proceed at Your Own Risk

Poyner Spruill LLP on 10/6/2015

For years, the typical post-default strategy of secured lenders has been to foreclose the collateral through the power-of-sale contained in the deed of trust, credit the foreclosure proceeds to the outstanding loan balance,...more

2015 Update of Arizona's Anti-Deficiency Laws

Clark Hill PLC on 4/30/2015

Deadline for seeking deficiency. Section 33-814(A) of the Arizona Revised Statutes allows a foreclosing creditor (the "beneficiary"), within 90 days after the date of a trustee's sale, to commence an action to recover a...more

Supreme Court of Washington Clarifies Guarantor Liability for Deficiency Judgments

Perkins Coie on 2/11/2015

The Supreme Court of Washington has upheld a lender’s right to pursue a deficiency judgment against a guarantor following a nonjudicial foreclosure of collateral under Washington’s Deed of Trust Act (the “Act”). The court’s...more

California Foreclosure Law: California Supreme Court Grants Review Of The Keshtgar Decision

Miller Starr Regalia on 1/9/2015

As reported in our blog article below, in June the Second District Court of Appeal held that California’s non-judicial foreclosure statutes do not grant a defaulting borrower the right to enjoin a foreclosure sale by alleging...more

New California Case Illustrates Peril of Full Credit Bid

Snell & Wilmer on 10/7/2014

In a new California case, a lender that made a full credit bid at a foreclosure sale lost its right as mortgagee under a lender’s insurance policy for damage to the property that occurred prior to foreclosure. This was so...more

Lenders Beware: the Nevada Supreme Court Holds That Foreclosures of Homeowners’ Association Liens May Extinguish First Priority...

Snell & Wilmer on 10/6/2014

Nevada has adopted the Uniform Common Interest Ownership Act of 1982 (the “Act”) which governs homeowners’ associations (“HOA”). One particular provision of that Act, enacted by Nevada in 1991 and later amended, and codified...more

Appellate Court Notes

Pullman & Comley, LLC on 7/17/2014

AC35632- U.S. Bank, N.A. v. Foote - Second time is the charm. Defendant succeeded in getting plaintiff’s foreclosure action dismissed for lack of standing due to the inability of the witnesses to establish that the...more

Virginia Supreme Court Allows Damages Claim for Violation of HUD Regulation Requiring Face-to-Face Meeting before Seeking...

Ballard Spahr LLP on 6/10/2014

The Virginia Supreme Court recently expanded the grounds under which a private borrower can sue a lender for violations of HUD regulations. In Squire v. Virginia Housing Development Authority, a decision issued on April 17,...more

Can an HOA "Super-Priority" Lien Extinguish a Lender's Deed?

Snell & Wilmer on 6/2/2014

It is hard to imagine that a lender’s first-position deed of trust on a residence worth hundreds of thousands of dollars could be extinguished by a homeowners’ association (HOA) lien for overdue neighborhood assessments,...more

Lenders and Servicers: Be Aware of How Trustees Handle Excess Proceeds from HOA Foreclosure Sales in Nevada

Ballard Spahr LLP on 4/14/2014

Lenders and servicers have been addressing the issue of some Nevada courts ruling that a foreclosure sale by a homeowners association (HOA) "wipes out" a senior deed of trust. Since the date of our last legal alert on this...more

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