Expert: Michael Brotherton - 6/26/2007

Question
QUESTION: IF THERE IS A LIEN ON YOUR PROPERTY AND THE LAWYER HAS A JUDGEMENT AGAINST YOU.  CAN THEY SELL YOUR PROPERTY FOR THE JUDGEMENT?  THE PROPERTY IS WORTH 300,000.00 AND THE JUDGEMENT IS 6,900.00.  THE LAWYER SAID HE IS GETTING A WRITE OF EXECUTION AND SELLING THE PROPERTY.  THE PROPERTY IS PAID OFF.  I OWE NOTHING ON IT.

ANSWER: This depends on your state. They can potentially foreclose but they must go through due process. Just because they have a judgment does not give them the right to foreclose.

What state are you in? Do you have the ability to make payments or any funds available to offer a settlement?

Let me know the answers to these questions and I can give you more input.

Thanks

Mike

---------- FOLLOW-UP ----------

QUESTION: THE STATE OF WASHINGTON.  THIS STARTED OUT AS A 2,700.00 DEBT.  RENT FOR A BUILDING FOR MY BUSINESS.  NOW BECAUSE OF INTEREST AND LAWYER FEES IT IS NEAR 7,000.00.  HE HAS A JUDGEMENT AND A LEIN ON MY PROPERTY ALREAD.  WHAT IS DUE PROCESS?  HE SAYS IF I DON'T PAY FOR BY FRIDAY HE WILL GET THE WRITE OF EXE. ABD SELL THE PROPERTY.  HOW CAN I STOP THIS.  I TRIED TO SEE IF I COULD MAKE PAYMENTS BUT HE WON'T WORK WITH ME.  THIS IS PRETTY SCARY BECAUSE THE PROPERTY IS WORTH A NICE AMOUNT.  THIS HAS BEEN GOING ON FOR A LONG TIME.  MY PHONE NUMBER IS 206 322 5530.

Answer
It is not likely he can foreclose for this kind of debt. He can have his lien but it would cost him thousands to pursue. You can tie his hands for a long while if you fight the foreclosure. They must do a "judicial foreclosure". Just because he has a judgment does not mean he can just foreclose. Due process means there is a legal process which must be followed. Each state has their prescribed process. A local attorney there can answer your questions more specifically. I have attached a summary of the foreclosure law for your information.

Quick Facts
-  Judicial Foreclosure Available: Yes
-  Non-Judicial Foreclosure Available: Yes
-  Primary Security Instruments: Deed of Trust, Mortgage
-  Timeline: Typically 120 days
-  Right of Redemption: Rare, only in Judicial Foreclosure.
-  Deficiency Judgments Allowed: Yes
In Washington, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure (not common in Washington)
The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder.

Non-Judicial Foreclosure- NOT APPLICABLE
The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines THIS IS NOT APPLICABLE TO YOUR SITUATION.

   If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

      1. The notice of sale must be transmitted both by regular mail and by certified mail, return receipt requested, to the borrower at their last known address, and by regular mail to the attorney of record for the borrower, if any, not less than thirty (30) days prior to the day of sale.

         A notice of the sale once a week, consecutively, for four (4) weeks, in any daily or weekly legal newspaper of of general circulation published in the county in which the property is located. Additionally, the notice must be posted in two public places, one of which must be the courthouse door, in the county where the sale is to take place for a period of not less than four weeks prior to the day of sale.

         Said notice must contain the time and place of the foreclosure sale, the names of the parties to the deed, the date of the deed, recording information, a property description, the terms of the sale, and the borrowers rights (or lack of) redemption.
      2. The borrower has up to eleven (11) days before the sale stop the foreclosure process by paying the past due payments, plus expenses, including trustee and attorney fees.
      3. The sale must be made by auction between 9:00 am in the morning and 4:00 am in the afternoon at the courthouse door on Friday unless Friday is a legal holiday and then the sale must be held on the next following regular business day. The sale may not be conducted less than 190 days from the date of default and the highest bidder will receive a certificate of sale.

         The sale may be postponed (not exceeding one (1) week next after the day appointed) by giving notice and by posting written notices of the adjournment under the notices of sale originally posted.

If the non-judicial foreclosure process is used by the lender, then it cannot sue for a deficiency judgment. On judicial foreclosure sales, the borrower can be sued for a deficiency, unless the property is found to be abandoned for six (6) months before the decree of foreclosure.