February 2, 2011
Washington Advocates Seek To Mimic Nevada Mediation Program  Holly Chisa By Holly Chisa, HPC Advocacy, UTA Washington Lobbyist Within the first week of the Washington legislative session, lawmakers were already working on legislation related to foreclosure. We have had two work sessions in the last two weeks, meeting with advocates, financial institutions, and lawmakers to determine if there can be any agreement on changing current law. At this time, there is no agreement among the parties. The discussions actually began back in November, when the Washington Department of Financial Institutions and the Attorney General’s office announced that they would each begin examinations of the processes of trustees, to ensure that foreclosure practices were legal. UTA arranged meetings with both Attorney General Rob McKenna and the Director of the Department of Financial Institutions (DFI), Scott Jarvis. These conversations were well attended by several Washington state trustees, and I appreciate their willingness to help educate our public officials on the vital role trustees play in the foreclosure process. Since the beginning of the session on January 10, two bills have been introduced on the issue, both structured after the Nevada laws. HB 1362 and SB 5275 would require mandatory mediation before a foreclosure can proceed forward. Both bills are being heard on January 26th in the House and Senate respectively, and we anticipate much impassioned testimony from homeowners unable to communicate with their financial institution prior to the foreclosure being completed. UTA Board Member Michael Brooks, Esq., of Brooks Bauer, who testified recently before the Nevada Legislature on the Nevada Foreclosure Mediation program, testified before the Washington Legislature on his experience with the Nevada model and its potential impact to the foreclosure process in Washington. We also have several meetings scheduled with lawmakers, including the Chairs of the House and Senate Committees, during this week to discuss the Nevada model, and how changes in the foreclosure law can cripple the process, and the long-term economic recovery of the housing market. We have also had three negotiation sessions with lawmakers in the House and Senate and representatives from financial institutions and the advocate community to try and reach agreement on potential changes to foreclosure law. My thanks to Debbie Kaufman of Regional Trustee Services and Dave Fennell, of Routh Crabtree Olsen, who have been participating in these discussions on behalf of the trustees. In the third meeting, financial institutions were clear that they will not agree to mandatory mediation, but would agree to increased fees on institutions, and beefed up conditions on the meet and confer requirement. They are also recommending we bring portions of the Colorado model to Washington as a possible alternative to what was done in Nevada. Additionally, we have seen other bills introduced that will directly impact trustees. Several deeds of trust bills have been filed, some with minor implications, and some which would have significant impact to the industry. One in particular, SB 5309, would create significant CPA liability for trustees, and would require a chain of possession be identified by the beneficiary of who held the note from the initial mortgage on through the sale of that mortgage to other parties. Clearly this would create havoc within the system. UTA opposes this legislation, and will work with the bill’s sponsor to see if the language can be corrected, or if the bill must be killed. As we have seen in the last several years, Washington lawmakers continue to want to “fix” the foreclosure process. But without clearly identifying what the true problems are, the legislative proposals at this time only worsen the problem, and won’t help the housing market in the long term for anyone. |