Several Issues Facing Trustees in Washington
By Holly Chisa, HPC Advocacy, UTA Washington State Lobbyist
There are several different issues facing trustees in Washington, even as new laws affecting the foreclosure process kick in the first week of June.
First, HB 2614 changed the foreclosure process beginning on June 7. This legislation made changes to the timeline, and also allows homeowners to request mediation up to twenty days after the NOTS has been sent. Read a copy of the full legislation.
Even with the passage of this legislation – the third change to our state’s foreclosure laws in three years – meetings continue on other issues around the foreclosure process, and to the trustees’ role specifically. Lawmakers are now meeting with members of the United Trustees Association, financial institutions, and homeowner attorneys to talk about whether further regulations are needed. This includes whether the original note needs to be present at the foreclosure, and whether there are “strangers to the title” foreclosing on homes, instead of the true note holder. A few lawmakers also believe that trustees should be specifically licensed as an industry. They argue that no one is watching the industry, and no one reviews their practices.
This ignores all the regulators that ARE watching the trustees, from the federal and state financial regulators to auditors that are routinely observing your practices. Additionally, there is simply no money for an entirely new regulatory program. UTA is talking with lawmakers throughout the summer to educate them on the industry, and the regulations already in place to ensure laws are followed. It is likely, however, we will still see legislation this January attempting to regulate trustees, or require that they take directions from interested parties instead of remaining autonomous in their decisions.
In lieu of licensing, we have asked that the staff of the Attorney General be brought in to one of the meetings. There have been extensive investigations of trustees by the AG’s office over the past few years, and a few trustee companies have been removed from practice in Washington. I’d like to know more about the tools they already have in place to regulate the industry, and if there were ANY questionable dealings they found that COULD NOT be addressed through current law. This will give us a much clearer picture of how heavily the industry is already regulated, and show that licensing is unnecessary.
The Washington State Supreme Court has ruled on Bain vs. Mortgage Electronics Registration Systems. The Court ruled that MERS cannot be considered the holder of the note to begin the foreclosure process. They ordered that, under the deed of trust act, the beneficiary must hold the promissory note. Read a copy of the ruling. This ruling will require the Legislature to reopen portions of the deed of trust act to clearly define who is considered the holder of the note, and who has the right to foreclose. We are working to get legal guidance on what trustees are to do with those houses currently in the pipeline that have MERS involved in the process.
Expect more communications from the UTA throughout the fall as we work through these issues. If you are interested in talking with lawmakers about these issues, please contact me. We are always happy to connect you directly with your elected officials to explain more about the role of the industry in the foreclosure process, and the work that your individual businesses do in your communities.