State Supreme Court Washington and Kentucky Analyze Rebuttal of Trustee’s Deed Presumption of Validity, and Lien Priority of MERS

A couple of recent mortgage-related state Supreme Court decisions:Wash SC Rebutted Presumption of Validity Trustee’s Deed   MERS v Roberts Ky SC

Albice v. Dickinson, Cause No. 85260-0 (Wash. May 24, 2012)(presumption of validity of trustee’s deed rebutted)

The trial court ruled that despite procedural noncompliance, the purchaser was a BFP under the statute and quieted title in the purchaser. The Court of Appeals reversed, holding that failure to comply with the statutory requirements was reason to set the sale aside and that factually, the purchaser did not qualify as a BFP. We affirm the Court of Appeals.

1. Whether a trustee’s sale taking place beyond the 120 days permitted by RCW 61.24.040(6) warrants invalidating the sale.

2. Whether, under the circumstances of this case, a borrower waives the right to bring a postsale challenge for failing to utilize the presale remedies under RCW 61.24.130.

3. Whether a bona fide purchaser can prevail despite an otherwise invalid sale.

In Kentucky, we have MERS, Inc. v. Roberts,  2010-SC-000069-DG (May 24, 2012)

The question before the Court is simply who has first priority: Roberts, because his judgment lien was filed before MERS’s mortgage lien, or MERS, because of equitable subrogation.

As discussed above, the purpose behind adopting a narrow rule of applicability for equitable subrogation is to protect the Kentucky recording scheme and to ensure a clear and organized means of recording and ordering liens on a piece of real property.

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