Procedural Flaws Extend To Trustees, Washington AG Says

Posted by Orb Staff on October 18, 2010 No Comments
Categories : Mortgage Servicing

Foreclosure trustees are ignoring consumer-protection laws in Washington, according to the state's attorney general, Rob McKenna. Last week, McKenna sent letters to 52 trustees, calling on them to suspend any questionable foreclosures in the state. His office's Consumer Protection Division has opened investigations in several of the trustees.

McKenna says his office has received complaints that indicate foreclosures in the state frequently include inaccurate documents and faulty chains of title. Lenders routinely fail to notify borrowers of their right to mediation, and trustees do not always provide servicer contact information in a borrower's notice of default, as required by law.

‘Your role as foreclosure trustees is to ensure that each foreclosure you conduct is completed in good faith and in full compliance with the law,’ McKenna says in his letter. ‘Because Washington state law allows foreclosure without court oversight, you are the party most responsible for ensuring that foreclosures are done properly.’

Notarized trustee signatures also vary from document to document, suggesting that trustees are signing other people's signatures, McKenna alleges.

"Problems aren't limited to the national banks and mortgage servicers, however, and appear to extend to foreclosure trustees," McKenna says.

SOURCE: Office of Washington Attorney General Rob McKenna

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