Washington Becomes a Lead State in Cracking Down on Foreclsore Scams

I almost missed it! This is great day because the legislature passed last night the equity skimming bill recommended by the Washington State Attorney General in January of this year. In two months the legislature passed a comprehensive bill specifically addressing foreclosure rescue scams. Representative McIntire called my this morning on his way back to Olympia from Seattle. He said that the yesterday’s session did not end until 1:30 this morning. The time was apparently very well spent.

This bill, HB 2791 , strikes right at the heart of the frauds that have been perpetrated on homeowners, making these scams felonies, as they should be. People who p[resent themselves to homeowners as consultants for foreclosures and default ed home loans are now subject to disclosure requirements and well articulated standards of behavior. The “savior” is prevented from absconding with more than 18% of the equity.

I will provide a more detailed discussion of the bill at a later date. When not impeded by special interests the Washington legislature is capable of very speedy action. With this bill (assuming the governor signs it, which is a safe assumption) Washington become one of the lead states in criminalizing this reprehensible behavior and regulating the permissible scope of legitimate activity.

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2 Responses to Washington Becomes a Lead State in Cracking Down on Foreclsore Scams

  1. Joe Kaiser says:

    This is a horrible bill. It effectively strips homeowners of the right to freely contract and removes investors from the foreclosure marketplace.

    Investors stop foreclosure. We write the checks. We don’t “abscond” with equity. We provide a good and valuable service that eliminates the horrific consequences of foreclosure.

    Labeling all investors as “scam artists” is particularly offensive.

    The new law mirrors the 2004 Minnesota statutes where it’s been shown to be a disaster with foreclosure in some areas up by a factor of five.

    Finally, the AG, under a public records act request, was able to produce exactly 4 complaints received in the last 5 years regarding foreclosure rescue “leaseback” scams.

    Who’s kidding who?

  2. The government is only going to make matters worse for the homeowners who need help the most. (I know, I know… what else is new?)

    You wonder just how ugly this thing is going to get.

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