Washington 'Meet and Confer' Program Allows Additional Mediation

Holly Chisa

By Holly Chisa, HPC Advocacy, UTA Washington Lobbyist

Work for the United Trustees Association continues in Washington through the summer.  There are two projects of focus for the UTA in Washington: 1) the implementation of HB 1362; and 2) the investigation by the Attorney General of Washington trustees.

Over the summer members of the Association have worked with the Washington State Department of Commerce to build a structure around HB 1362, and the new mediation program available to homeowners.  In the past, homeowners in foreclosure were allowed an option to meet and confer; now, in some circumstances, they have the right to an additional mediation with the financial institution.  The law was effective July 22, on a Friday, and a day when the Department of Commerce was closed.  This in theory would give trustees only a few hours to know whether homeowners were going to apply for the mediation program before their homes would be sold on that Friday.  Commerce worked with our Association and other parties to develop an effective approach to help address the issue.  Attorneys and counselors were allowed to unofficially “pre-apply” for mediation, and e-mails were distributed to trustees around the state identifying properties that had applied for mediation.  Those properties could then be pulled before the sales on July 22.  The Department will continue to send e-mails out on very regular basis notifying trustees that a property is moving to mediation, but a website is in development as a long-term communication tool.

Thankfully, it appears the program has launched with few challenges.  It is clear, however, that clean-up legislation will need to be run during the 2012 session.  This language will include a requirement to include the trustee in all notifications around meet and confer and mediation; right now that information is being sent, but only as a courtesy, not a requirement.

As of this writing, fewer than 100 homes have applied for mediation.  This number will increase, however, as more homeowners become aware of the program, and media coverage increases.

Additionally, Washington’s Attorney General, Rob McKenna, continues his investigation of trustees in Washington.  In August the AG filed suit against ReconTrust for what he has defined as “illegal foreclosures,” including the company failing to have a physical presence in Washington; failing to identify the actual holder of the note; and failing to hold foreclosures in a public facility.  ReconTrust is disputing these allegations.  As Rob McKenna is running for Governor, it is imperative that we proactively work with the AG on possible legislation in 2012 to address some of his identified concerns without jeopardizing trustees.  This is also an opportunity for the UTA to fix some issues within the law that have proven problematic for the industry as well.

Washington remains ranked in the top five states in the country with high numbers of foreclosures.  Lawmakers will continue to focus on the issue as long as homeowners continue to contact them with complaints, and the UTA must continue to work with the Legislature to ensure any legislation affecting deeds of trust is reasonable, rational, and effective.