Sale of Horseshoe

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CHAPTER 7 TRUSTEE'S MOTIONS FOR ORDER APPROVING SALE OF REAL PROPERTY FREE AND CLEAR OF LIENS; APPROVING REAL ESTATE COMMISSIONS; AND AVOIDING LIENS OF COWLITZ BANK - Page 1

JORDAN RAMIS, P.C. 1499 SE Tech Center Place

Suite 380 Vancouver, WA 98683

Telephone: 360-567-3900 Fax: 360-567-3901

Russell D. Garrett, WSBA #18657 Chapter 7 Trustee 1499 SE Tech Center Place, Suite 380 Vancouver, Washington 98683 Telephone: 360-567-3900 Facsimile: 360-567-3901

Hon. Brian D. Lynch Chapter: 7

Location: 500 W 12th Street, 2nd Flr Vancouver, WA

Hearing Date: September 3, 2014 Hearing Time: 9:00 am

Response Date: August 27, 2014

UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF WASHINGTON

In re: Leonard, Mark A., Debtor.

No. 13-43836-BDL CHAPTER 7 TRUSTEES MOTIONS FOR ORDER APPROVING SALE OF REAL PROPERTY FREE AND CLEAR OF LIENS PURSUANT TO 11 U.S.C. 363; APPROVING REAL ESTATE COMMISSIONS; AND AVOIDING LIENS OF COWLITZ BANK

MOTION TO SELL REAL PROPERTY

The Trustee requests an Order approving the sale of the Estates interest in and to real property free and clear of all liens, pursuant to 11 U.S.C. 363. The Trustee represents to the Court as follows: 1. This case was filed on June 7, 2013. Russell D. Garrett is the duly appointed interim Chapter 7 Trustee in this case. 2. One of the assets of the estate is real property. The debtor has not claimed an exemption in the property to be sold. The debtor is not presently residing on the property. The real property is located at:

160 Horseshoe Bend Estates, Kelso, WA 98626

Described more fully on the attached Exhibit A.

3. The Trustee hired Christine Dunn and Jeff Uusitalo of Keller Williams Realty to

assist the Trustee in liquidating the property. The Trustee has received an offer from Amy L.

Case 13-43836-PBS Doc 95 Filed 08/05/14 Ent. 08/05/14 14:13:21 Pg. 1 of 7

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Telephone: 360-567-3900 Fax: 360-567-3901

Hoff and Lance A. Hoff and intends to sell to these buyers, or another buyer with like or better

terms, to purchase the property for a purchase price of $360,000. The purchasers are not real

estate investors. The purchasers are buying the property to use as a personal residence. 4. This is the best offer the Trustee has received for the property.

5. Copies of the Residential Real Estate Purchase and Sale Agreement are voluminous and are available from the Trustee upon written request. Attached as Exhibit B is a copy of the estimated Settlement Statement or HUD. 6. The commission to be paid to realtors will be 6% of the gross sales price. Under the currently proposed sale, the commission to the realtors is as follows: Trustees real estate agent, Keller Williams Realty, will receive $13,500.00, and buyers real estate agent, (who under the current sale is Windemere / Allen & Assoc) will receive $8,100.00. In the event that this sale is on better terms, the commission figures may increase but will not exceed the agreed commissions of 6% of the gross sales price. In the case of such an increase, the proposed form of Order will reflect the 6% commission instead of a dollar value. 7. The sale will close through Chicago Title Company. Chicago Title Company will be acting as the Trustees authorized agent to make disbursements for administrative expenses pertaining to this sale, as well as payments on liens and encumbrances against the property. All disbursements in this transaction made by Chicago Title Company will be constructive disbursements on behalf of the Chapter 7 Trustee and the Chapter 7 Estate. 8. This transaction is a short sale. The Trustee does not anticipate any tax consequences from this sale. Liens will be paid as follows: a. Ocwen Loan Servicing, LLC. The first lien holder, Ocwen Loan Servicing, LLC, acting on behalf of [Quicken Loans Inc. (Except in NH, RI or Orleans Parish, LA, then foreclose in the name of Federal National Mortgage Association)] Mortgage Electronic Registration Systems, Inc. MERS will receive approximately $328,830.25, by agreement, and is owed approximately $350,000. It will receive less than the full amount of its secured claim. Ocwen Loan Servicing, LLC has agreed to this short sale on the terms described herein and will forward to Escrow an acceptance letter once this motion is filed or an order entered. The sale will not occur without the voluntary reconveyance of the Deed of Trust by this creditor. b. Cowlitz Bank. The second lienholder, Cowlitz Bank, now Heritage Bank, is described as holding a lien identified on Schedule B of the title report, recording number 3396884, for $250,000. Based upon the value of the property and the balance owed to the first lien holder, Heritage Banks entire claim and judgment is unsecured, non-priority, and its lien will be extinguished under this sale. c. Cowlitz Bank, a Washington chartered Commercial Bank. The third lienholder, Cowlitz Bank, a Washington chartered Commercial Bank is holding a lien identified


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Telephone: 360-567-3900 Fax: 360-567-3901

on Schedule B of the title report, judgment number 11-9-01769-5 from Superior Court case number 09-2-02188-1. Cowlitz Bank, a Washington chartered Commercial Banks entire claim and judgment is unsecured, non-priority, and its lien will be extinguished under this sale. 9. The purchasers will pay, through closing, an additional $18,000 (carve-out funds) to the Chapter 7 Estate. These buyer contributed funds are not part of the purchase price. The purchasers have agreed to pay those funds to the Trustee, to provide a benefit to the Chapter 7 estate in return for the Trustees efforts to administer this asset and assist in the ultimate sale of the asset to the purchasers. 10. The sale is free and clear of all liens pursuant to 11 U.S.C. 363. Creditors liens against the real property sold will attach to the sale proceeds in the same order of priority that the liens attached to the real property prior to the sale. 11. Legal Authority for Sale Free and Clear of Liens. 11 USC 363(f)(5) allows a bankruptcy Trustee to sell property free and clear of liens, even if the sale proceeds are insufficient to pay all liens against the property in full, thereby allowing unpaid liens to be stripped from the property being sold in this case.

12. Trustees Statement of Services. From the $18,000 of estate funds resulting

from this sale, the Trustee anticipates being paid a commission of no more than $5,000 if eventually approved by the Bankruptcy Court. Under relevant provisions of the Bankruptcy Code, the Trustee is entitled to a maximum

compensation of $21,250 for this short sale. The amount the Trustee is actually seeking in this case is less than the maximum compensation. The $5,000 Trustee commission (exclusive of costs) will compensate the Trustee for the Trustee services performed on behalf of the estate and its creditors.

13. Benefit of the short sale. The Trustee believes that this short sale transaction is in the best interest of the Debtors, creditors, and the larger community. (a) The Debtors will avoid having a foreclosure attached to their credit report for this property. That will assist the Debtors with their financial fresh start. (b) The creditors in this case will share a pro rata distribution of approximately $13,000 less administrative costs, including attorney and accountant fees, assuming that all claims are allowed. The Claims Bar Date expired on November 12, 2013. Presently, timely filed unsecured claims total approximately $75,476.69. If no further claims are filed, unsecured creditors should receive approximately 17% on their claims. However, additional assets are yet to be liquidated and there will be other administrative expense claims. This percentage could vary up or down based upon the Trustees final review of the actual claims filed in this case, any amendments or objections filed to timely filed claims, and cost of completing an estate tax return if one is necessary. If this short sale does not occur, unsecured creditors in this case would receive nothing. The short sale funds are the sum total of funds to be distributed to unsecured creditors in this case.

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Telephone: 360-567-3900 Fax: 360-567-3901

(c) The community as a whole benefits from this transaction. This short sale minimizes the time the Debtors residence may be vacant. If applicable, homeowners association dues will be paid current at closing, and will then be expected to be kept current by the buyer. If applicable, real estate taxes will be paid current at closing, and will then be expected to be kept current thereafter by the buyer.

(d) Having the house owned and occupied, rather than left vacant, prevents a further decrease in property values for homes in the neighboring area, as well as preventing the health, safety and aesthetic concerns for the neighborhood that a long-term vacant house presents. 14. The Trustee requests that the 14-day limitation for sale prescribed by Fed.R. Bankr.P. 6004(h) shall not apply. 15. Attached as Exhibit C is a proposed Order. 16. The Trustee will convey the property pursuant to a Trustees Deed.

WHEREFORE, the Trustee requests an Order as follows:

1. Approving the Trustees sale of the real property free and clear of all liens pursuant to

11 U.S.C. 363 as described more fully above, according to the Exhibit C order, and to these buyers or others on the same or better terms;

2. Authorizing the Trustee to make payment to Ocwen Loan Servicing LLC of $328,830.25 to satisfy the lien recorded.

3. Approving payment of commissions of 6% to realtors, which under the current terms are: Christine Dunn and Jeff Uusitalo of Keller Williams Real Estate as Trustees agent, $13,500.00 directly from closing, and to buyers agent, Windemere / Allen & Assoc. $8,100.00 directly from closing;

4. Authorizing Chicago Title Company as the disbursing agent of the Trustee, to pay all

other fees and costs associated with the sale as well as payments on liens and encumbrances against the real property;

5. Directing the title company to forward all remaining funds, after costs of sale and underlying liens and encumbrances, to Russell D. Garrett, Trustee in Bankruptcy; and

6. Directing that the 14-day limitation for sale prescribed by Fed.R.Bankr.P. 6004(h) shall not apply;

7. Directing that the Cowlitz Bank, now Heritage Bank, lien is avoided. Heritage Banks entire claim and judgment is unsecured, non-priority, and its lien will be extinguished under this sale.


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Telephone: 360-567-3900 Fax: 360-567-3901

8. Directing that the Cowlitz Bank, a Washington chartered Commercial Banks lien is

avoided. Cowlitz Bank, a Washington chartered Commercial Banks entire claim and judgment is unsecured, non-priority, and its lien will be extinguished under this sale.

DATED this 5th day of August, 2014.

JORDAN RAMIS, P.C.

By Russell D. Garrett, WSBA #18657 /s/ Russell D. Garrett

Chapter 7 Trustee


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CERTIFICATE OF SERVICE - Page 1 JORDAN RAMIS, P.C. 1499 SE Tech Center Place


Telephone: 360-567-3900 Fax: 360-567-3901

CERTIFICATE OF SERVICE

I hereby certify that on the 5th day of August, 2014, I caused to be served the foregoing CHAPTER 7 TRUSTEES MOTIONS FOR ORDER APPROVING SALE OF

REAL PROPERTY FREE AND CLEAR OF LIENS PURSUANT TO 11 U.S.C. 363; APPROVING REAL ESTATE COMMISSIONS; AND AVOIDING LIENS OF COWLITZ BANK on the following parties at the following addresses via U.S. Mail:

Mark A. Leonard PO Box 1249 Kalama WA 98625 Debtors last known address

CERTIFIED MAIL RETURN RECEIPT REQUESTED ATTN: William C. Erbey Executive Chairman & CEO of Executive Committee Ocwen Financial Corp. Manager, Ocwen Loan Servicing LLC 402 Strand Street Frederiksted, St Cr 00840 Virgin Islands (US, FO 00001) 1st Lien Holder

Registered Agent for Ocwen Loan Servicing, LLC Corporation Service Company 300 Deschutes Way Ste 304 Tumwater WA 98501

ATTN: Brian L. Vance, CEO Heritage Bank 201 5th Ave SW Olympia WA 98501 2nd Lien Holder

GE Capital Retail Bank c/o Recovery Management Systems Corp. 25 SE 2nd Ave Ste 1120 Miami FL 33131-1605 Auth. Agent for GE Capital Retail Bank Special Notice Request

Ronald T. Adams Black Helterline LLP 805 SW Broadway Ste 1900 Portland OR 97205 Attorneys for Federal Deposit

Insurance Corp. Special Notice Request

GMAC Mortgage, LLC ATTN: Bankruptcy Dept. 1100 Virginia Dr. Fort Washington PA 19034 Special Notice Request

McCarthy & Holthus, LLP 19735 10 Ave NE Ste N200 Poulsbo WA 98370 Attorneys for Quicken Loans Inc. Special Notice Request


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CERTIFICATE OF SERVICE - Page 2 JORDAN RAMIS, P.C. 1499 SE Tech Center Place


Telephone: 360-567-3900 Fax: 360-567-3901

VIA ECF NOTICE: United States Trustee [email protected] Robert C. Brungardt [email protected]

Debtors Attorney /s/ Russell D. Garrett Russell D. Garrett Chapter 7 Trustee


Sale of Horseshoe

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Transcript of Sale of Horseshoe