23 Apr Washington and West Virginia Legislative Update
The Washington legislature recently amended its laws governing foreclosures and the distribution of real property sale proceeds, effective June 12, 2014. The West Virginia legislature recently amended the West Virginia Consumer Credit and Protection Act (the “Act”), effective June 6, 2014.
WASHINGTON HOUSE BILL 2723
“Owner-occupied residential real property” includes residential real property of up to 4 units.
If an in-person meeting regarding modifying or restructuring a loan obligation is requested by the borrower or the borrower’s housing counselor or attorney, the meeting must be held in the county where the property is located, unless the parties agree otherwise.
Due diligence regarding a notice of default requires a beneficiary or authorized agent to first attempt to contact a borrower by sending, by both first-class and either registered or certified mail, return receipt requested, a letter to the address in the beneficiary’s records for sending account statements to the borrower and to the address of the property encumbered by the deed of trust.
The form of declaration to be provided by the beneficiary or authorized agent along with the notice of default must be in substantially the following form:
“FORECLOSURE LOSS MITIGATION FORM
Please select applicable option(s) below.
The undersigned beneficiary or authorized agent for the beneficiary hereby represents and declares under the penalty of perjury that [check the applicable box and fill in any blanks so that the beneficiary, authorized agent, or trustee can insert, on the beneficiary’s behalf, the applicable declaration in the notice of default required under chapter 61.24 RCW]:
(1) [ ] The beneficiary or beneficiary’s authorized agent has contacted the borrower under, and has complied with, RCW 61.24.031 (contact provision to “assess the borrower’s financial ability to pay the debt secured by the deed of trust and explore options for the borrower to avoid foreclosure”) and the borrower responded but did not request a meeting.
(2) [ ] The beneficiary or beneficiary’s authorized agent has contacted the borrower as required under RCW 61.24.031 and the borrower or the borrower’s designated representative requested a meeting. A meeting was held on (insert date, time, and location/telephonic here) in compliance with RCW 61.24.031.
(3) [ ] The beneficiary or beneficiary’s authorized agent has contacted the borrower as required in RCW 61.24.031 and the borrower or the borrower’s designated representative requested a meeting. A meeting was scheduled for (insert date, time, and location/telephonic here) and neither the borrower nor the borrower’s designated representative appeared.
(4) [ ] The beneficiary or beneficiary’s authorized agent has exercised due diligence to contact the borrower as required in RCW 61.24.031(5) and the borrower did not respond.
(5) [ ] The borrower has surrendered the secured property as evidenced by either a letter confirming the surrender or by delivery of the keys to the secured property to the beneficiary, the beneficiary’s authorized agent or to the trustee.
Additional Optional Explanatory Comments:
If the borrower has failed to elect to mediate within the applicable time frame, the borrower and the beneficiary may, but are under no duty to, agree in writing to enter the foreclosure mediation program.
Within 20 days of the beneficiary’s receipt of the borrower’s documents, the beneficiary must transmit the documents required for mediation to the mediator and borrower, which include investor restrictions that prohibit the beneficiary from implementing a modification, if the beneficiary claims it cannot implement a modification due to limitations of an investor restriction, and documentation or a statement detailing the efforts of the beneficiary to obtain a waiver of the investor restriction.
A person may be referred to mediation if the borrower is deceased and the person is a successor in interest of the deceased borrower who occupies the property as his or her primary residence. A person may be referred to mediation if the person has been awarded title to the property in a proceeding for dissolution or legal separation. The referring counselor or attorney must determine the person’s eligibility and indicate the grounds for eligibility on the referral to mediation submitted to the Department of Commerce. For the purposes of mediation, the person must be treated as a “borrower” under the Washington foreclosure mediation program.
The provisions above do not impose an affirmative duty on the beneficiary to accept an assumption of the loan.
WASHINGTON SENATE BILL 6553
If, after the confirmation of a sale and the judgment is satisfied, there are any proceeds of the sale remaining, the clerk will pay the proceeds, as provided below, to all interests in, or liens against, the property eliminated by sale in the order of priority that the interest, lien, or claim attached to the property, as determined by the court.
Any remaining proceeds will be paid to the borrower, or the borrower’s representative, as the case may be, before the order is made upon the motion to confirm the sale only if the party files with the clerk a waiver of all objections made or to be made to the proceedings concerning the sale. Otherwise, the excess proceeds will remain in the custody of the clerk until the sale of the property has been disposed of.
Anyone seeking disbursement of surplus funds must file a motion requesting disbursement in the superior court for the county in which the surplus funds are deposited. Notice of the motion must be served upon or mailed to all persons who had an interest in the property at the time of sale, and any other party who has entered an appearance in the proceeding, not less than 20 days prior to the hearing of the motion. The clerk will not disburse remaining proceeds except upon order of the superior court of the county.
When property has been sold or debts received on execution, the sheriff will pay the proceeds to the clerk who issued the writ, for satisfaction of the judgment as commanded in the writ or for payment of any excess proceeds to all interests in, or liens against, the property eliminated by the sale in the order of priority that the interest, lien, or claim attached to the property, as determined by the court. Any remaining proceeds will be paid to the borrower.
If any proceeds remain after satisfaction of the judgment, the clerk will pay the excess to all interests in, or liens against, the property eliminated by the sale in the order of priority that the interest, lien, or claim attached to the property, as determined by the court. Any remaining proceeds will be paid to the borrower.
WEST VIRGINIA HOUSE BILL 4360
A debt collector must not use unfair or unconscionable means to collect or attempt to collect any claim. The following conduct is now deemed to violate the Act:
- When the debt is beyond the statute of limitations for filing a legal action for collection, failing to provide the following disclosure informing the consumer in its initial written communication with such consumer that:
- When collecting on a debt that is not past the date for being obsolete provided for in the federal Fair Credit Reporting Act: “The law limits how long how you can be sued on a debt. Because of the age of your debt, (INSERT OWNER NAME) cannot sue you for it. If you do not pay the debt, (INSERT OWNER NAME) may report or continue to report it to the credit reporting agencies as unpaid”; and
- When collecting on a debt that is past the date for being obsolete provided for in the federal Fair Credit Reporting Act: “The law limits how long you can be sued on a debt. Because of the age of your debt, (INSERT OWNER NAME) cannot sue you for it and (INSERT OWNER NAME) cannot report it to any credit reporting agencies.”