Friday, March 9, 2012
Washington Foreclosure Fairness Act - Bad Faith Determination
The foreclosure fairness act is now playing a big part in Washington foreclosures. The big component of the bill is that all parties must act in good faith, but what does that mean and why does it matter? Below is a very basic overview of the law and the potential ramifications of getting a bad faith determination at mediator.
General Rule. RCW 61.24.160
A violation of a Duty to Mediate in Good Faith include:
a. failure to timely participate in the mediation without good cause
b. failure to provide the following documents to the borrower at least ten days prior to mediation:
- accurate statement of loan balance
- copies of note and Deed of Trust
- Proof the beneficiary is the owner of the promissory note
- estimate of arrearages
- payment history for past 12 months
- NPV analysis
- explanation regarding any denial for loan modification or other foreclosure alternative
- most recent BPO or appraisal
c. Pool Servicing Agreement that prohibits modification
d. Failure of a party to designate representatives with adequate authority to fully settle, compromise or otherwise reach resolution
What does it mean if the bank gets a failure to act in Good Faith?
If mediator issues a certificate that beneficiary failed to act in good faith, it would constitute a defense to a non-judicial foreclosure - the most common type of foreclosure in Washington.
A mediator certificate that the NPV (Net Present Value) of a loan modification exceeds the NPV of a foreclosure, it would constitute a basis for enjoining the foreclosure.
For more information on your rights in Foreclosure, Short Sale or otherwise, consider seeking the guidance of a Seattle Foreclosure Attorney or a Seattle Short Sale Attorney.
Weitz Law Firm, PLLC
520 Kirkland Way, Ste 103
Kirkland, WA 98033
at 12:56 PM