{"id":26746,"date":"2013-06-19T10:00:07","date_gmt":"2013-06-19T17:00:07","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=26746"},"modified":"2013-06-20T08:51:17","modified_gmt":"2013-06-20T15:51:17","slug":"can-banks-seek-deficiency-judgment-in-washington-state","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2013\/06\/19\/can-banks-seek-deficiency-judgment-in-washington-state\/","title":{"rendered":"Can Banks Seek Deficiency Judgment in Washington State?"},"content":{"rendered":"<p>Over the weekend the Washington Post published a story about former homeowners who find themselves owing money on a home they lost to foreclosure years earlier: <a href=\"http:\/\/www.washingtonpost.com\/investigations\/lenders-seek-court-actions-against-homeowners-years-after-foreclosure\/2013\/06\/15\/3c6a04ce-96fc-11e2-b68f-dc5c4b47e519_story.html\" title=\"Lenders seek court actions against homeowners years after foreclosure\">Lenders seek court actions against homeowners years after foreclosure<\/a>.  It&#8217;s a process called &#8220;deficiency judgment,&#8221; and it&#8217;s not really news to anyone who has paid attention to housing over the last few years.  Many similar stories have been published, such as this 2010 CNNMoney story: <a href=\"http:\/\/money.cnn.com\/2010\/02\/03\/real_estate\/foreclosure_deficiency_judgement\/\" title=\"You lost your house - but you still have to pay\">You lost your house &#8211; but you still have to pay<\/a>.<\/p>\n<p>However, since this is obviously a topic of interest that we haven&#8217;t covered here before, I thought it would be worth explaining when you can and can&#8217;t find yourself at risk of deficiency judgment in Washington State.  Note that <strong>this is not legal advice<\/strong>, just my best interpretation of the available information on the subject.<\/p>\n<p><a href=\"http:\/\/www.flickr.com\/photos\/boston_public_library\/8696750596\/\" title=\"State Capitol at Olympia, Washington by Boston Public Library, on Flickr\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2013\/06\/Olympia-Capitol-Building-postcard-sm.jpg\" width=\"300\" height=\"187\" alt=\"State Capitol at Olympia, Washington\" title=\"State Capitol at Olympia, Washington\" style=\"float:right; margin:5px 0 0 15px;\"><\/a>The most authoritative resource I found that details the nuances around deficiency judgment in Washington is <a href=\"http:\/\/www.dfi.wa.gov\/consumers\/education\/home\/short-sales.htm\" title=\"Washington State Department of Financial Institutions: Short Sales - Seller Advisory\">this page on short sales from the Washington State Department of Financial Institutions<\/a>.  You can also go straight to the law and read the Revised Code of Washington, specifically <a href=\"http:\/\/apps.leg.wa.gov\/rcw\/default.aspx?cite=61.24.100\" title=\"RCW 61.24.100\">RCW 61.24.100<\/a>.<\/p>\n<p>You <em>could<\/em> face deficiency judgment in the following scenarios:<\/p>\n<ul>\n<li>You had loans with two banks but only one foreclosed.  The other bank may pursue deficiency judgment.<\/li>\n<li>Your home was foreclosed in a judicial foreclosure (most foreclosures in Washington are non-judicial via a <a href=\"http:\/\/apps.leg.wa.gov\/rcw\/default.aspx?cite=61.24.030\" title=\"RCW 61.24.030\">Trustee Sale<\/a>).<\/li>\n<li>You sold your home in a short sale and did not receive a written guarantee from the bank (or both banks if you had two loans) that they were forgiving all outstanding debt.<\/li>\n<li>You gave your home back to the bank via a deed-in-lieu of foreclosure and did not receive a written guarantee from the bank (or both banks if you had two loans) that they were forgiving all outstanding debt.<\/li>\n<li>You trashed your home so thoroughly as to reduce its &#8220;fair value.&#8221;<\/li>\n<li>You collected rent for your home after the foreclosure sale.<\/li>\n<\/ul>\n<p>You <em>should not<\/em> face deficiency judgment in the following scenarios:<\/p>\n<ul>\n<li>You had just one lender, and they foreclosed in a non-judicial foreclosure (via a <a href=\"http:\/\/apps.leg.wa.gov\/rcw\/default.aspx?cite=61.24.030\" title=\"RCW 61.24.030\">Trustee Sale<\/a>).<\/li>\n<li>You sold your home in a short sale and received a written guarantee from the bank (or both banks if you had two loans) that they were forgiving all outstanding debt.<\/li>\n<li>You gave your home back to the bank via a deed-in-lieu of foreclosure and received a written guarantee from the bank (or both banks if you had two loans) that they were forgiving all outstanding debt.<\/li>\n<\/ul>\n<p>Again, <strong>this is not legal advice<\/strong>, and I make no guarantee that the scenarios above are comprehensive, but this should be a guide to at least give you an idea if deficiency judgment is a risk you might be exposed to.<\/p>\n<p>For the most part deficiency judgment is relatively rare in our state, but if you&#8217;re worried about it and any of the scenarios in the first list above apply to you, you should <strong>contact an attorney<\/strong> (I recommend both <a href=\"http:\/\/lawofficeofcraigblackmon.com\/\" title=\"Law Office of Craig Blackmon\">Craig Blackmon<\/a> and <a href=\"http:\/\/holmeslawgroup.com\/\" title=\"Holmes Law Group\">Marc Holmes<\/a>).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Over the weekend the Washington Post published a story about former homeowners who find themselves owing money on a home they lost to foreclosure years earlier: Lenders seek court actions against homeowners years after foreclosure. It&#8217;s a process called &#8220;deficiency judgment,&#8221; and it&#8217;s not really news to anyone who has paid attention to housing over&#8230;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[613,198],"tags":[305,975,7,275],"coauthors":[],"class_list":["post-26746","post","type-post","status-publish","format-standard","hentry","category-national-news","category-news","tag-banks","tag-deficiency","tag-foreclosures","tag-short-sales"],"yoast_head":"<!-- This site is optimized with the 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