Washington DC Restores Lending Priority Rules After Supreme Court Shake-Up
Washington DC's lending landscape has seen significant changes following a Supreme Court decision and subsequent legislative action. The Washington Supreme Court's ruling in Commencement Bank v. Epic Solutions, Inc. altered priority rules for future advances, causing uncertainty for non-construction loans and increased costs for lines of credit. The legislature swiftly responded with House Bill 1420, restoring the 'first in time, first in right' principle for all loans in the state.
The court's decision in 2023 introduced ambiguity for non-construction loans and increased expenses for lines of credit. However, the specific law responsible for these changes remains unidentified in available search results.
The court's ruling modified the priority rules for future advances in Washington DC state. This shift led to the legislature's prompt action to restore the 'first in time, first in right' principle. House Bill 1420, now RCW 61.12.190, ensures that all sums secured by a mortgage or deed of trust maintain priority over subsequently recorded encumbrances, regardless of whether the disbursements are obligatory or optional.
The Washington DC legislature, through House Bill 1420, has clarified the priority rules for future advances in the state. The new law, RCW 61.12.190, reinstates the 'first in time, first in right' principle, providing certainty for lenders and borrowers alike in Washington DC's lending market.
