Boeing Employees’ Credit Union v. Burns (Division 1, March 19, 2012), involves the interplay between a promissory note and a deed of trust. After a party receives a judgment on a promissory note, what effect (if any) does that have on a deed of trust that secures the note?
Pretty much none, according to the Court of Appeals. “Entry of a judgment on a promissory note does not extinguish the lien of a security interest in real property that secures that note.” The Court of Appeals explains:
Washington case law makes clear that the entry of a judgment on a promissory note secured by a real property security interest does not extinguish the lien of that security interest in the collateral. Specifically, the holder of the real property security interest has the option to sue on the note, obtain a judgment, and later foreclose the security interest to satisfy any unpaid obligation of the borrower on the note.
Accordingly, BECU’s judgment against the defendants on the promissory note did not extinguish BECU’s lien and concomitant right to surplus funds following the sale of the defendants’ trustee sale.