By Holly Chisa, HPC Advocacy, UTA Washington State Lobbyist
First, thank you to those who attended the UTA Annual Conference in November, 2017. I appreciate the input you provided throughout the conference on policies before the Washington State Legislature, including potential fee increases and active legislation we’re working on for members.
A couple of you provided helpful information regarding fee increases for foreclosure documentation. Specifically, you provided hard numbers for the impact those fee increases have already had to your businesses in California. We’ve seen these proposals in Washington as well, and your arguments against the increases should help us fight a substantive fee that has been proposed in previous years. I expect to see that fee increase suggested in Washington again in 2018.
We continue to work on two issues identified as important by UTA members – cleaning up the process for non-judicial foreclosures for deceased borrowers, and non-monitory interest filing for trustees. UTA talked with lawmakers in both the House and Senate, and a path is developing to pass legislation this session to try and fix both issues in one bill. These negotiations are taking place outside of the larger coalition of financial institutions, local governments, and other parties, and are specifically taking place between trustee representatives and the homeowner advocate attorneys. This simplifies the process on these two issues, and allows us to focus on these two issues which may not be as high of priority for financial institutions and others.
Separating these issues legislatively also untangles them from the Jordan vs. NationStar case. That issue remains unresolved, and the debate continues on how best to handle property management pre-foreclosure. Local governments want a duty to maintain for financial institutions even pre-NOTS. Financial institutions are willing to consider that standard, within reason, but want a retroactive solution to the underlying case. Advocate attorneys want significant limitations on how and when a financial institution or its agent can enter a property or home pre-sale. Currently, the case remains in court, and it’s unlikely there will be resolution in 2018 legislatively.
First, UTA is working on the successor in interest issue. Clearly there are limited circumstances when an individual is a successor in interest, even if they’re not on the loan, and are interested in working with financial institutions to work through an agreement to remain in the home – for example, a spouse who’s husband has died, but she remains in the home or an adult child. The challenge is to determine how to correctly move these individuals into the process without having to go to probate, or to limit how long the probate process would take. Working with the advocate attorneys, we have contacted the Bar to ask for their input in this specialized component of law to determine what options might be available. It might be possible to create a “stepping stone” of sorts to allow an individual to be identified as a legitimate party, and create a brief probate process to allow that individual to take over the loan, and move the issue through the non-judicial process.
Additionally, we are actively negotiating the options for non-monitory interest filings. There is generally an understanding even by the advocate attorneys that trustees may not have any financial ties to a lawsuit, but become a named party when the dispute is with a financial institution without a physical presence in Washington. The challenge will be determining what process could be established to providing a trustee a path to file for filing a non-monitory interest declaration – similar to California – but still allow for court proceedings in a Washington court for the homeowner. There appears to be a willingness to consider California’s process for filing a non-monitory declaration, as long as there is room to dispute that filing and keep the trustee in if there is a ruling to do so.
Both of these issues will be combined into one legislative proposal to be introduced in the Washington Legislature in January, 2018. It will be extremely important that members of the United Trustees Association travel to Washington in late January for our annual Day on the Hill. We’ll be meeting with lawmakers about the above issues, and how important they are to the industry to help simplify the foreclosure process. Additionally, UTA members will have the opportunity to share with lawmakers the impact that filing and document fees can have on the industry, and share the experiences that you have had in other states when these fees are implemented.
Now that foreclosures are down in Washington, it’s a good time to look at the kinds of policy issues that generally don’t affect homeowners. In the case of successors in interest legislation, policy changes like addressing successors in interest actually allow some homeowners to take advantage of some of the provisions of the Foreclosure Fairness Act currently not available to them in a judicial process. I will be sharing drafts of the legislation soon, and look forward to your input. Again, my sincere thanks for the conversations that we had during the UTA Convention in Reno in November, and I look forward to your review and comments as we work to pass legislation in Washington in 2018.