Washington state invalidates common mortgage provision - REO Property Preservation Forum
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post #1 of 20 (permalink) Old 07-17-2016, 08:33 PM Thread Starter
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Washington state invalidates common mortgage provision

In a ruling this month, the Washington Supreme Court found that action illegal a decision that clears the way for a federal class-action case that Jordan brought on behalf of at least 3,600 borrowers in the state, and one that could have broad ramifications on how some lenders respond when homeowners miss payment,
"This is criminal trespass and theft, and it should be treated as such," said Sheila O'Sullivan, executive director of the Northwest Consumer Law Center. "There's no basis for them to walk in and change the locks on a person's home until they have foreclosed. It's an important ruling."
The mortgage industry is wrestling with the significance of the 6-3 ruling, which found that provisions standard in mortgage documents around the country conflict with state law. The provisions allow for lenders to change locks, winterize homes or take other steps to preserve the value of properties that are in default or abandoned."

http://www.msn.com/en-us/money/reale...Buqk9D?ocid=sf
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post #2 of 20 (permalink) Old 07-17-2016, 11:51 PM
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Wow, that could spread pretty quickly.
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post #3 of 20 (permalink) Old 07-18-2016, 10:11 AM
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Oh yes, the floodgates are open. How many people that have been foreclosed on would LOVE to sue?!!

I am by no stretch a legal mind, but I do think the court is drunk on power.

That mortgage payment I make every month? Yep, the bank agrees to let me live there as long as I make that payment. At the time I pay the principal in full, then I own the house. Until then I only am a percentage owner. I laugh every time I get the question 'are you a homeowner'. Um no not really.

So a couple questions for legal people.

How are any laws being broken here? The borrower has signed for the banks rights to preserve property in the event of nonpayment. If I own land and give you written and signed permission to be there, are you trespassing? If the borrower signs a contract with the lender spelling out what happens in the event of non payment-how is anything unlawful??!

On a side note, is home repossession any different than a car repo/impoundment? Boat? Motorcycle? Collateral on ANY loan? How is it any different? If you don't make said payment, someone will be out to secure, or take an asset. Said asset will be held until payment is made. If no payment then asset is sold and remaining balance goes to borrower.

With a home loan, the house is obviously the collateral to the loan. Why shouldn't the bank have rights to the asset they own?

Like I said, not a legal mind. Feel free to blow me up.
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post #4 of 20 (permalink) Old 07-18-2016, 12:32 PM
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The same crooked lawyers that rode the housing bubble up

will pick its bones on the way down. That's all the "legal education" you need to figure this one out.
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post #5 of 20 (permalink) Old 07-18-2016, 11:48 PM
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Quote:
Originally Posted by safeguard dropout View Post

On a side note, is home repossession any different than a car repo/impoundment? Boat? Motorcycle? Collateral on ANY loan? How is it any different?
Major difference. The car repo laws for each state may differ but for the most part, state courts come down hard on car repo guys if they don't follow the rules...Mainly because they're repo guys.

Car repo guys know the laws very well. That's all they do, every day. In many states they have to be licensed. I've worked for one. Never again, to much stress.

I can't imagine walking up to home without a foreclosure notice and without a sheriff sheriffs deputy and changing the locks. The Sheriffs office won't put themselves in that position without the proper paperwork.

Many vendors in the housing repo arena do it to make a few extra bucks here-and-there. And they don't make nearly what a car repo guy makes for the same BS.
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post #6 of 20 (permalink) Old 07-19-2016, 07:39 AM
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Safeguard Dropout,

The bank does have collateral rights but only after a foreclosure has been granted from the court.
Personally i agree with this opinion. Keeps the P&P guys out if trouble AND makes you a lot more money with repairs from the years/months of neglect waiting for a court approved foreclosure.
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post #7 of 20 (permalink) Old 07-19-2016, 11:40 AM
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In my state when a car payment is ten days late, a right to cure 20 day notice is served. If no payment then repo can happen, without going through the courts. So 30-40 days. I'm not talking about the specific laws being the same as foreclosure, I was talking more about the similar concept of repoing any collateral, whether is be a house or an RV camper, and raising the question of why the lender isn't afforded the same rights to repo a house as they are a vehicle.


I'm not a lender and I do very little P&P so I have no dog in this hunt. Just sayin.

I'm just having trouble wrapping my brain around the fact that the lender can own up to 100% (based on amount of principal paid)of an asset and have no rights to it without going through the courts. We all know that process can take a year or longer, and as Wannabe pointed out, a LOT of damage and dollars can add up in short time. I just think the lender is getting screwed and I wonder if this ruling will change lending practices, and more so, lending costs.

More than anything I think the term 'homeowner' needs to be looked at and redefined.

Just my opinion....
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post #8 of 20 (permalink) Old 07-19-2016, 12:46 PM
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Originally Posted by safeguard dropout View Post
In my state when a car payment is ten days late, a right to cure 20 day notice is served. If no payment then repo can happen, without going through the courts. So 30-40 days. I'm not talking about the specific laws being the same as foreclosure, I was talking more about the similar concept of repoing any collateral, whether is be a house or an RV camper, and raising the question of why the lender isn't afforded the same rights to repo a house as they are a vehicle.


I'm not a lender and I do very little P&P so I have no dog in this hunt. Just sayin.

I'm just having trouble wrapping my brain around the fact that the lender can own up to 100% (based on amount of principal paid)of an asset and have no rights to it without going through the courts. We all know that process can take a year or longer, and as Wannabe pointed out, a LOT of damage and dollars can add up in short time. I just think the lender is getting screwed and I wonder if this ruling will change lending practices, and more so, lending costs.

More than anything I think the term 'homeowner' needs to be looked at and redefined.

Just my opinion....

Trespassing on a "borrowers" premises and changing the locks while the property is in pre-foreclosure is an unacceptable practice. It can also get a someone seriously injured or killed.

You mentioned the time frame in which a car repo guy can proceed. If he follows the rules, has his ducks-in-a-row (paperwork) and the cops get called, the cops will allow the repo.

Ethical car repo guys will, if possible, contact the local police to tell them when, where and how there going to perform the repo. Just in case there's any conflict.

What does a P&P guy have? A work order for a lock-change from some two-bit servicing company that no one has ever heard of outside of the P&P industry.

Ha!

To a cop, or anyone else, that work order is worthless. They themselves could be, or know someone that is in arrears.

The bottom line is, due-process has to take place. Pre-Foreclosure is not Foreclosure.
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post #9 of 20 (permalink) Old 07-19-2016, 12:59 PM
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When you buy a house you sign in your mortgage contract an agreement that allows the servicer to "protect and preserve the collateral" I think you'd be surprised what an average mortgage has in it.

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post #10 of 20 (permalink) Old 07-19-2016, 01:13 PM
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Originally Posted by oteroproperties View Post
When you buy a house you sign in your mortgage contract an agreement that allows the servicer to "protect and preserve the collateral" I think you'd be surprised what an average mortgage has in it.

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How about the servicing company comes and mows my grass, pressure washes, and paints my house for the P&P prices? Oh, I have some stuff that need to be taken to the dump too.

After all, it's protecting and preserving the collateral.

Sign me up. Oh wait, I guess I already did.
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