Washington Senate Consumer Protection and Homeowners Committee

Sometimes a person could almost get skeptical about the legislature. Take for example the foreclosure crisis and the millions of dollars that are taken from homeowners through foreclosure rescue scams. The Attorney General recommended legislation to help avoid this type of larceny and to penalize those who perpetrate it. A blue ribbon Task Force on Homeowner Security was assembled which duly issued a report to the Senate Consumer Protection and Housing Committee.The report, like most of its kind, contains a lot of fluff. It says that it would be a good practice for lenders to enter into workout agreements which permitted the homeowner to pay an affordable amount. Duh! Apparently this blue ribbon panel was unaware that nearly every homeowner is this situation begs for such consideration, often without ever being able to reach a responsible person on the phone. There is much talk about consumer education and enhanced public awareness that might have helped some of the victims, but does not really get to the root of the problem.There were two areas of discussion though that particularly caught my eye. One was legislation addressing mortgage fraud and rescue scams. (This is what the Attorney General is seeking.) The other was that the foreclosure notices themselves could serve a public interest function by alerting the homeowner to legitimate counseling opportunities and warning against scams. What a great idea! This would truly serve a public purpose, at no public (or private) expense. People actually read those notices and what would it hurt to tell them about legitimate avenues of inquiry, as well as the threat of scams. This is exactly the information that the victims do not have. It would involve relatively minor changes to the Deed of Trust Act.

Dutifully Brian Weinstein, the chair of this committee (who has fought for a number of consumer oriented bills, usually with fellow Democrat Frank Chopp), sponsored a bill to change the Deed of Trust Act. The proposed changes though bore no relationship to the changes proposed by the committee’s task force. In fact they worsened the situation of the scam victim. The trustee is the person or company which actually performs the foreclosure. It has a fiduciary duty to the homeowner, the highest duty imposed by law. The proposed legislation eliminated that. It did provide that the trustee had to have an office with a telephone in this state, but then changed the law so that the trustee does not need to answer its phone. Requests for information need not be honored unless they are in writing and then the trustee need not respond sooner than 10 days. These changes limit and delay the information attainable by an aggrieved homeowner. That’s it! Nothing about informing the homeowner of legitimate counseling opportunities or warning about scams. How on earth could the chairman of the committee that had a report recommending changes to the Deed of Trust Act, sponsor a bill that, not just disregarded those proposed changes, but actually hindered the homeowner’s interest in being treated fairly and getting information.

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