News & Events

News & Events

2.28.2014

Washington Court of Appeals Confirms Lenders’ Right to Obtain Deficiency Judgments Against Guarantors Following Nonjudicial Foreclosure of Commonly Used Form of Deed of Trust

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The Deed of Trust Act generally bars a lender from seeking a deficiency judgment against a borrower following nonjudicial foreclosure of a deed of trust securing the borrower’s loan. The Act contains some exceptions in the case of a commercial loan and it expressly permits a lender to seek a deficiency judgment against a guarantor of a foreclosed loan, subject to the guarantor’s right to challenge the fair value paid for the property at the trustee’s sale. RCW 61.24.100(3)(c), (5). In Washington Federal v. Gentry, — P.3d —-, 2014 WL 627817 (Wash. App. Feb. 18, 2014), a case argued by Lane Powell, Division One of the Washington State Court of Appeals held that the lender’s right to seek a deficiency judgment against a guarantor exists even where the foreclosed deed of trust secures both the borrower’s loan and the guarantor’s guaranty.

View the full article (PDF) for a deeper look at the implications of this case (Washington Federal v. Gentry).

For more information regarding this matter or loan enforcement strategies in light of the Gentry and First Citizens decisions, please contact Greg Fox at 206.223.7129, or by email at foxg@lanepowell.com; or Ryan McBride at 206.223.7962, or by email at mcbrider@lanepowell.com.


For all other inquiries, please contact the Financial Institutions Industry Team at Lane Powell:

206.223.7000 Seattle
503.778.2100 Portland
lppc@lanepowell.com