Lender’s Agent Has Authority to Complete Foreclosure

January 15, 2020 Posted in Case Law Review

After a lender had completed a foreclosure of a deed of trust, the homeowner sued the lender and the lender’s servicing company for violating Washington’s Deed of Trust Act contending that the servicing company was not authorized to conduct the foreclosure. The lender appointed an agent to service the loan. When the homeowner defaulted on the loan, the servicing company appointed a successor trustee to initiate nonjudicial foreclosure proceedings. After the foreclosure was completed, the homeowner filed a lawsuit arguing that the servicing company did not have authority to appoint a successor trustee to complete the foreclosure proceedings because the servicing company was not the note holder or the loan owner. Division I of the Washington State Court of Appeals confirmed that a service company properly appointed by the note holder had authority to complete the foreclosure. In this case, the lender had executed a limited power of attorney authorizing the servicing company to execute documents on behalf of the lender in nonjudicial proceedings. The outcome of this case may have been different had the lender not executed the limited power of attorney. Winters v. Quality Loan Serv. Corp. of Washington, Inc., 11 Wash.App.2d 628 (2019).

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