Unlawful business practices by foreclosure trustees operating in Washington state appear to more serious than previously thought.
A six-month investigation by the state Attorney General’s Office has uncovered a disturbing problem that can jeopardize a homeowner’s chances of putting the brakes on a foreclosure.
The state investigation has revealed that some of the largest trustees doing business in this state don’t maintain actual offices and local phone numbers for homeowners to call. This despite the fact that state law requires foreclosure trustees to maintain these lines of communication with homeowners in danger of losing their homes.
This is unacceptable: Homeowners who could make a legitimate case to stop a foreclosure are having difficulty getting through to trustees.
Homeowners need an office or an easily accessible person to call to make last-minute payments or provide documents that may prove a forced sale of their home should be halted.
Foreclosures run on tight, unforgiving timelines with life-changing decisions looming around the corner. Homeowners facing loss of their home have the right – the legal right – to talk to someone face to face when there is a problem.
In 2008, when the housing market crash and mortgage crisis was starting to hit, the state Legislature amended the state Deed of Trust statute to ensure that trustees are knowledgeable about state foreclosure laws, including making sure they are available for last-minute catch-up, mortgage payments or to receive new information from homeowners that could be a game-changer.
It’s not sufficient to just have an agent based in the state. The law requires that the trustee itself maintain an office in the state with a phone number for homeowners in foreclosure to call.
Some of the largest trustees operating in the state are not in compliance with the law, state Attorney General Rob McKenna said. The Attorney General’s Office has put the suspect trustees on notice but is not naming them until the investigation is complete. It’s incumbent upon those trustees to stop their questionable practices or face the full force of the law.
In addition, all trustees doing business in the state received a letter last week, reminding them of their obligations under the Deed of Trust statue.
It’s important to note that this development is in addition to a multi-state investigation by attorneys general into abuses in the mortgage servicing industry.
Trustees involved in the multi-state probe received a letter last October telling them to suspend any questionable foreclosures involving such things as inaccurate documents, conflict of interest, faulty chains of title and failure to provide disclosures and conduct mediations.
These complicated cases are still under review. Once complete, violators should be identified and prosecuted.
Meanwhile, homeowners in foreclosure need to take steps to protect themselves from unscrupulous foreclosure practices. They need to seek the advice of a housing counselor or attorney if they believe they have cause to stop a foreclosure.
Some of the possible reasons for halting a foreclosure proceeding include: a mortgage servicer failed to credit a payment, a homeowner didn’t receive notice of a foreclosure, or a mortgage servicer won’t respond to a genuine contract to sell the home.
Homeowners who are unable to find a local address or phone number for their trustee should file a complaint with the Attorney General’s Office online at atg.wa.gov/FileAComplaint.aspx.
Homeowners be aware: Washington is a nonjudicial foreclosure state, which means a lender can proceed directly to selling a house at a public auction without first filing a lawsuit. Unfortunately, this puts the burden on homeowners to seek a court order to halt the sale, if they believe they have been aggrieved.
For those who can’t afford an attorney, there is a home ownership hot line that can be of help. It is 877-894-4663. Additional resources are available at www.arg.wa.gov/foreclosure.aspx.
The Attorney General’s Office must continue to fight for the rights of consumers victimized by misleading business practices by foreclosure trustees. Foreclosures must be able to pass the test of fairness with the homeowner given every legal and reasonable opportunity to keep from losing his or her home.