Vargas Update: Nonjudicial Foreclosures In Limbo

On April 30^th, the Washington Supreme Court ruled in Vargas v. RRA CP Opportunity Trust 1, et al. that beneficiaries seeking to enforce collection on a Home Equity Line of Credit (“HELOC”) cannot do so by way of the Deed of Trust Act (RCW 61.24 et. seq). In other words, creditors trying to collect on a HELOC debt could no longer avail themselves to nonjudicial foreclosure. I previously wrote an article regarding the impact of Vargas here.

On May 20^th, the lender, filed a motion for reconsideration to the Supreme Court arguing, among other things, that the opinion: (1) incorrectly read a requirement that instruments be negotiable into RCW 61.24 et. seq; (2) that the modification to the statute in RCW 61.24.030(7) did not require that the beneficiary be a “holder”, but rather, simply intended to permit servicers and agents to pursue foreclosure; and (3) that foreclosure on guaranties, which are not negotiable instruments, is expressly permitted under RCW 61.24.100(6), a fact that