FORECLOSURE DEFENSE NEWS AND INFORMATION - Washington

            The Decision by the Court of Appeals of Washington (Division One) in the case Brown v. Household Realty, 146 Wn. App. 157 (2008) underscores how important it is for homeowners to take prompt legal action if they wish to defend against a foreclosure.

            The plaintiffs sought damages for the alleged fraudulent conduct of the lender, including misrepresentations regarding fees and interest associated with the subject loan. However, the Plaintiffs did not commence their legal action until after the foreclosed the deed of trust.  The lower court’s decision, which dismissed the Browns complaint against their lender, was upheld by the Court of Appeals.  Both the trial court and the appellate court held that because the Browns failed to seek any relief prior to the trustee’s sale, they had waived their claims. In reaching its decision, the Court of Appeals quoted the Washington Supreme Court’s decision in Plein v. Lackey, 149 Wn.2d 214, 227 (2003), in which the Court ruled that pre-sale remedies provided homeowners with a adequate opportunities to protect their rights. 

            In light of the decisions described above, it is essential that when faced with foreclosure, homeowners take immediate legal action by filing a Complaint to Enjoin the Trustee’s Sale.

1. The Non-Judicial Foreclosure Process:
   
   
   1. The vast majority of foreclosures in Washington are accomplished through non-judicial foreclosure. As a result, property owners must initiate court proceedings if they wish to stop a trustee's sale.
   2. The basic procedures and time periods applicable to trustees' sales are set6 forth in section 61.24.040 of the Revised Code of Washington.
   3. A lender must send a Notice of Default at least 30 days prior to attempting to sell the property. The Notice of Default must set forth the details of the alleged default and costs of foreclosure. It must be sent via certified or registered mail.
   4. A property owner may cure a default up to eleven (11) days prior to the scheduled sale.
2. Court Proceedings by Property Owners to Stop Foreclosures:
   
   If a property seeks to stop a trustee's sale by commencing legal action in court, he or she may assert defenses to foreclosure which pertain to the initial loan documents. Olsen v. Pesarik, 118 Wn. App. 688 (2003): Statutes of limitation which might otherwise serve as a bar to claims are not applicable to defenses to nonjudicial foreclosures asserted by plaintiff's in the context of actions to enjoin trustees' sales:
   
   Excerpt from decision:
   
   "Statutes of limitation never run against defenses arising out of the transactions sued upon." "`[A]s [long] as the courts will hear the plaintiff's case, time will not bar the defense which might be urged thereto and which grew out of the transaction connected with the plaintiff's claim . . .'". Recoupment or offset is one of the defenses that is not barred by the statutes of limitations "so long as the main action itself is timely." (internal citations omitted)

   Particularly in matters involving high-interest loans, property owners may wish to consider allegations against their lenders based on fraud and the Federal Truth in Lending Act.