Home Equity Skimming Dismissal Reversed by Supreme Court


A man with a learning disability and limited education lost his job in 2008, and soon fell over $10,000 behind on property taxes. The county had not yet issued a certificate of delinquency, but the homeowner felt desperate to borrow against the significant equity in his home and pay the taxes to save his house.

The homeowner met a mortgage broker.  The homeowner thought the mortgage broker was arranging a loan. In reality, the homeowner deeded his house away to an investor and entered a lease with an option to buy-back.

The homeowner sued under the distressed property conveyances act. The suit was dismissed on summary judgment. The result was upheld by the Court of Appeals. The Washington Supreme Court reversed.[1]

In a distressed home conveyance there are mandatory disclosures and various important consumer rights. The act defines a distressed home to include a home that was under “risk of loss due to nonpayment of taxes.”

The Court ruled that whether a transaction is a distressed home conveyance under the statute must be determined on a case-by-case basis.

Factors trial courts are to consider include (1) the total amount owed to the county including all fees and other costs; (2) the total number of payments the delinquency represents and when foreclosure could occur; (3) the financial ability of the homeowner to meet or cure this obligation at the time of the transaction; and (4) any discrepancy between the sale price and the fair market value of the property.

If you believe you are the victim of equity skimming you should consult with an attorney.

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By attorney Travis Eller



[1] Jametsky v. Olsen, ____ Wn.2d ____ (No. 88215-1 February 06, 2014).