§68.09 Secured Interests: Mortgages|Deeds of Trust

• Jurisdiction: Washington

§ 68.09 SECURED INTERESTS: MORTGAGES/DEEDS OF TRUST

Mortgages and deeds of trust are used to secure an interest in monetary payments made over time. A deed of trust or mortgage takes priority over a homestead in the event of a foreclosure and cannot be defeated in bankruptcy. RCW 6.13.080(2)(b).

Upon the completion of foreclosure of a deed of trust or mortgage, the property can be awarded to and title quieted in the foreclosing party, or it can be sold, and the proceeds applied to satisfy the obligation. Monegan v. Pac. Nat'l Bank of Wash., 16 Wn. App. 280, 285-89, 556 P.2d 226 (1976). If an obligation secured by a deed of trust or a mortgage on homesteaded property is foreclosed, the proceeds of the sale are distributed first to the holder of the security interest, then to the holder of the homestead, and only then to mere unsecured judgment creditors. Felton v. Citizens Fed. Sav. & Loan Ass'n, 101 Wn.2d 416, 423-25, 679 P.2d 928 (1984), overruling in part Mahalko v. Arctic Trading Co., 99 Wn.2d 30, 659 P.2d 502 (1983).

Forfeiture is disfavored in the law and equitable remedies are available. Using considerations of the proportion of equity in the title holder and the amount of the debt, or other equitable considerations, the court may grant stays to allow curing of the problem by payment of the debt. Miebach v. Colasurdo, 102 Wn.2d 170, 176-78, 685 P.2d 1074 (1984). Confirmation of the sale upon execution is a legal remedy that may not control when the defense is equitable. Id.; Malo v. Anderson, 62 Wn.2d 813, 816-17, 384 P.2d 867 (1963); Malo v. Anderson, 76 Wn.2d 1, 4, 454 P.2d 828 (1969).

[1] Mortgages

Mortgages are common security interests in which the grantor title holder (mortgagor) grants the grantee (mortgagee) the right to a judicial foreclosure in the event of breach. Chapter 61.12 RCW. Pursuant to RCW 61.12.020, the writing is to include the name of the mortgagor; name of the mortgagee; the amount of the secured payment, due date, interest rate, and whether evidenced by promissory note, bond, or other instrument; and the described real estate that is being used to secure the payment. A mortgage that does not literally adhere to the form enumerated in the statute is not void between the parties, provided the rights of third parties do not intervene. Spedden v. Sykes, 51 Wash 267, 272-73, 98 P. 752 (1908). A mortgage may be provided to secure the debt of another party. Seattle-First Nat'l Bank v. Hart, 19 Wn. App. 71, 72-74, 573 P.2d 827 (1978...