Washington State Attorney General targets foreclosure trustee

For those in need of debt relief, foreclosure can be a constant, looming threat. Yet, there are many legal avenues that can help a homeowner avoid foreclosure, although it can be hard to take advantage of some of them when lenders and others involved in the foreclosure process are not playing fair.

The Washington State Attorney General's Office has taken foreclosure trustee Quality Loan Service to court in an effort to put a stop to deceptive and unfair business practices. Although it may not be enough on its own to save a home from foreclosure, the action is certainly a positive thing for homeowners who were unfairly harmed.

Many homeowners will receive a check and a delay of foreclosure proceedings

A foreclosure trustee is meant to act as a neutral buffer between the lender and the borrower during the foreclosure process. Foreclosure trustees have a legal duty to act in good faith.

Homeowners are supposed to be able to reach the foreclosure trustee to ask for a postponement, make last-minute payments, ask questions or serve legal papers that will put the foreclosure on hold. To facilitate this, there is a law that requires foreclosure trustees to maintain a physical presence with a street address in Washington State.

According to an investigation conducted by the Attorney General's Office, Quality Loan Service shuttered its Poulsbo office and clandestinely relocated to Seattle. Borrowers embroiled in the foreclosure process were not informed of the move. Furthermore, the new office was in an out-of-the way location which some borrowers were unable to find; others found it, but failed to gain access because it was in a locked office building.

The Attorney General's Office claimed that the circumstances of the move put Quality Loan Service in violation of the Consumer Protection Act for engaging in unfair and deceptive business practices. The Attorney General's Office filed an action in King County Superior Court.

The action was successful. In addition to making payments that will amount to approximately $500 for more than 450 homeowners who were affected by the move, Quality Loan Service was required to pay the Attorney General's Office's expenses and to delay a number of pending foreclosures. Notice has now been sent to all affected homeowners about Quality Loan Service's change of address and steps have been taken to improve access to the new Quality Loan Service office in Seattle.

Chapter 13 bankruptcy is one way to truly defeat foreclosure

A tidy sum of $500 and delay of a foreclosure are certainly not trifles, and the Attorney General's legal action against Quality Loan Services is a big win for homeowners. But what about those who want to defeat an impending foreclosure entirely?

Filing for bankruptcy can be a viable solution to save a home from foreclosure. As soon as you file for bankruptcy, a legal instrument known as an automatic stay goes into effect. The automatic stay temporarily halts all creditor action, including foreclosure.

If you are pursuing Chapter 13 bankruptcy, debts are consolidated and you work to partially repay creditors over a three to five year term at the end of which most remaining types of unsecured debt are discharged completely. Under a Chapter 13 repayment plan, you can make up for past-due mortgage payments. As long as you keep current on your mortgage obligations during the three to five year repayment term, the foreclosure can be defeated.

Talk to a Washington bankruptcy attorney if you are facing foreclosure. You may have more legal options than you think.