NEW: Washington State Consumer Protection Changes

[Social Apocalypse]

I just got this from the DFI Website. It is changes being made to Washington State Law. WOW it looks VERY exciting with regard to foreclosure and produce the note!! Maybe I am reading it wrong?

ESB 5810 (chapter 292, Laws of 2009)
Deeds of Trust Foreclosure

Effective Date: July 26, 2009

Current law does not require a residential mortgage lender to contact its borrower prior to commencing a non-judicial deed of trust foreclosure, nor does current state law require proof of the existence of the original promissory note secured by the deed of trust prior to a trustee commencing foreclosure. Current law does not require that the successful bidder at a deed of trust sale (either the lender or a third party bidder) provide any notice or time-period after foreclosure before commencing an eviction of an existing tenant. In addition, appellate case law has held that the failure to enjoin a deed of trust sale prior to completion of the foreclosure bars the borrower from bringing any claims against the lender or trustee.

This bill makes several temporary and permanent changes to the Deed of Trust Act (Ch. 61.24 RCW) that are designed to address the ill-effects of the present mortgage crisis and the perceived inequity of Washington appellate case law:

Lender contacting the borrower before starting foreclosure process.
The bill requires that the first notice of default, which commences a non-judicial deed of trust foreclosure, may not commence against a borrower on an owner-occupied residential mortgage loan made between January 1, 2003, and December 31, 2007, unless the lender has contacted the borrower and certifies having done so in the notice of default. This contact requirement is temporary and expires December 31, 2012. Deeds of trust securing commercial loans, guaranties, and seller-financed sales are exempt from this temporary requirement.

Proof of promissory note prior to trustee commencing foreclosure. Before the statutory notice of sale may be recorded, which is the first act of the appointed trustee in the non-judicial foreclosure process, the trustee must have proof that the purported lender is the actual holder of the promissory note secured by the deed of trust and possesses the original note with authority to commence the deed of trust sale. If the original promissory note is lost, the lender may provide a copy of the note and a notarized statement declaring that the original note has been lost.

Sixty-day notice to tenants after foreclosure of tenant-occupied residence. The bill requires that tenants in possession of non-owner occupied residential property at time of deed of trust foreclosure shall be given a 60-day notice to vacate. The new owner (landlord) by foreclosure still has the option of negotiating a new lease with the tenant or offering to pay the tenant to vacate sooner.

Survival of certain claims against the lender or trustee. The failure of a borrower (beneficiary) or lender (grantor) to enjoin a deed of trust sale under the Deed of Trust Act does not act as a waiver of the claim for actual damages for common law fraud or misrepresentation, conduct in violation of Title 19 RCW, and a failure of the trustee to materially comply with Deed of Trust Act. The claim for actual damages must be brought within two (2) years of the foreclosure’s completion.