The answer depends on what claim the borrower makes. In a split decision, the Washington State Supreme Court in Frias v. Asset Foreclosure Services, Inc. et al, No. 89343-8 (Wash. Sep. 18, 2014), held (1) a borrower does not have a claim for money damages for purported violations of the Deeds of Trust Act when the foreclosure sale has not taken place yet, but (2) a borrower may, under the right circumstances, have a pre-foreclosure sale claim for money damages under a Consumer Protection Act claim for violations of the Deeds of Trust Act.
Before the Frias decision, courts in Washington were split on this issue. For example, for courts that answered the question “no,” see Vawter v. Quality Loan Service Corp. of Washington, 707 F.Supp.2d 1115 (W.D. Wash. 2010) and McDonald v. OneWest Bank, FSB, 929 F.Supp.2d 1079 (W.D. Wash. March. 2013). More recently, in August 2013 Division 1 of the Washington Court of Appeals answered the question “yes.” In doing so it relied on RCW 61.24.127(1)(c), which says “The failure of the borrower or [deed of trust] grantor to bring a civil action to enjoin a foreclosure sale under this chapter may not be deemed a waiver of a claim for [money] damages asserting: [f]ailure of the trustee to materially comply with the provisions of [Chapter 61.24 RCW, WA’s Deeds of Trust Act].” See Walker v. Quality Loan Service Corp., 176 Wn.App. 294 (Div. 1, Aug. 2013). Recognizing a split in the law, in September 2013 the U.S. District Court for the Western District of Washington certified the issue to the Washington Supreme Court. Frias v. Asset Foreclosure Services, Inc., 2013 WL 6440205 (W.D. Wash, Sept. 2013).
Now that we have the answer, borrowers have even more of an uphill battle in their fight to obtain money damages for foreclosure-related violations if the foreclosure sale has not occurred. Time will tell if the legislature amends the Deeds of Trust Act to expressly provide for a cause of action under the Act for money damages before a foreclosure sale occurs.