Dear Honorable Attorney General Ferguson;
First: A heartfelt THANK YOU for your recent Amicus regarding foreclosure trustee culpability in the Washington Deed of Trust Act! The citizens of this State that are paying attention are immensely gratified when we see evidence that not everyone is corrupt in government. Thank you for this: Download StateAmicusBriefTrujillo_v_NWTS2015-05-08
There is more to do.
We have submitted the below information to your office in the form of a formal complaint and look forward to reaching a resolution, and will share it here when it happens.
We are presenting the the following disturbing case for consideration by the public at large so as to display a typical, chronic violation under your supervision that is happening in Washington State.
The violation that we are referring to is TRUSTEE MISCONDUCT, and in our state, it is rampant. We are well aware that your office is inundated with these complaints. It is unclear why we are not seeing any evidence of regulation or enforcement action with regard to these trustees. Is this because all of the complaints coming into your office are of no merit? Is it because you don't think there is a problem? We respectfully ask, what is the reason?
For purposes of illustration of the flagrant disregard local trustees have for the Washington Deed of Trust Act, we present this ONE example that exists in our own case.
For your convenience, I have linked to and displayed the relevant clause in the Act for review. MAYBE the trustees have forgotten? I bet that's it. Well, it's YOUR duty to remind them. You are their regulator, and we ask for questions to be asked about behavior such as this.
Here is the relevant portion to this example being given:
Trustee, qualifications — Successor trustee.
(3) The trustee or successor trustee shall have no fiduciary duty or fiduciary obligation to the grantor or other persons having an interest in the property subject to the deed of trust.
(4) The trustee or successor trustee has a duty of good faith to the borrower, beneficiary, and grantor.
In a non-judicial foreclosure, it is well settled, that the foreclosure trustee is appointed to shepherd the borrower and the creditor through the turbulent process of separating a borrower from their home without troubling the Court system. This is a viable, efficient idea on it's face. In an effort to assure that borrowers (or creditors) rights are not completely trampled in this process, the Deed of Trust Act was born, and it's mandates are quite clear and have been well-established in our court system. This is where the AG comes in...
The focus of this particular issue is the Trustee's duty to impartiality. The Trustee is NOT permitted to show preference to either the borrower or the Creditor in performing it's duties, it is a violation of the law. Their job is, essentially, as "referee" to the process. Just like in a basketball game. It is expected that a creditor can provide the Trustee with accurate information that will satisfy the Trustees duty to assure that a default that can trigger foreclosure has taken place. Again, this is not just a "tradition' it is THE LAW. As in Trujillo, and you concur in your Amicus Brief; the creditor's declaration, under penalty of perjury, is sufficient to empower the Trustee to take a borrower's home by force without the benevolent court room overseeing the activity. We agree, as long as the trustee is performing their obligations according to the law, and they are not.
Now, it is also expected that if the creditor violates the borrower's legal rights as outlined in the Deed of Trust Act under "Requisites to A Trustee's Sale"then the Trustee MUST TAKE ACTION to protect the borrower's rights. The relevant part of the statute is in BOLD:
It shall be requisite to a trustee's sale:
(7)(a) That, for residential real property, before the notice of trustee's sale is recorded, transmitted, or served, the trustee shall have proof that the beneficiary is the owner of any promissory note or other obligation secured by the deed of trust. A declaration by the beneficiary made under the penalty of perjury stating that the beneficiary is the actual holder of the promissory note or other obligation secured by the deed of trust shall be sufficient proof as required under this subsection.
In our case, our mortgage was rescinded via TILA Rescission before the alleged beneficiary acquired it from whom we rescinded it. We have spent the last 6 years, at huge cost, trying to convey to the courts what it means when a TILA Rescission is invoked. Finally, we got a lot of help from no less than The Supreme Court Of The United States (USSC), who ruled on January 13, 2015 and made it crystal clear that we rescinded properly and yes, our note was voided by operation of law at that time. That was in 2009. You can read about the USSC ruling in Jesinoski HERE Justice Scalia does a far better job than I in describing what TILA Rescission means.
Back in 2012 (3 years after we rescinded, mind you), while we were in litigation with both the alleged creditor (PennyMac Loan Services, LLC) and the foreclosing trustee (Northwest Trustee Services, Inc.) to stop a wrongful foreclosure on a mortgage that was never in default, and to enforce our TILA Rescission, a new case ruling in the 9th Cir. Court created new (albeit erroneous) controlling precedent that said we did our rescission incorrectly. That ruling was just reversed by the USSC. Of course, we do not expect the AG to be involved in this battle, we are seeking remedy in the courts as we should.
This is the relevant part that we request an answer to:
When this new case was ruled upon, discrediting our TILA Rescission, our creditor immediately moved for Summary Judgement (MSJ) in our case to invalidate our rescission. This is not surprising, I would have done the same if I were them, and they prevailed. But that's not the shocking part.
The shocking part is that their PARTNER in the MSJ to kill our TILA Rescission was: Northwest Trustee Services. They BOTH filed the MSJ against us. This motion was separate and distinct from the foreclosure action and from the lawsuit we had filed. This motion simply asked the Court to rule that our TILA Rescission was time barred. Why should NWTS have an interest in WHETHER our note was valid or not? WHY should they have a vested interest in the ability of the lender to foreclose? Why would they try to remove our ability to get remedy on a fraudulent mortgage? Therein lies your answer. THEY HAVE A VESTED INTEREST, and that is not lawful.
Foreclosure is profitable, and that is the problem. But I digress...
WHY is it legal for the Trustee to exert attorney expertise, collect attorney fees from us and contribute substantial legal might in an effort that is SOLELY to take away a right of remedy that Congress afforded us to protect ourselves from fraudulent lending through the Truth In Lending Act (to which the Trustees have no ties)??
IT'S NOT LEGAL. The Trustee was exposed to NO LIABILITY from a Rescission Action and, as they continue to state, they "have no say in matters in loan origination" yet they are in it up to their neck trying to prevent us from litigating our loan's origination. Their support to the alleged creditor in this case is a direct and strong influence over this case, and that is unlawful. They should have to explain why they care that our mortgage was rescinded. They are the Trustee, the details of our mortgage do not involve them, but they are very involved in it's litigation.
This is so fundamental to the problem we have in this state. Creditors are not having any problem taking homes in foreclosure. Some are justified, some are not. They do NOT NEED, nor are they entitled, to the aid and support of foreclosure trustees. This is illegal, yet it happens constantly. It's happening to us. A borrower's ability to fight a wrongful foreclosure is greatly reduced by the sheer impenetrability of the legal force that is unleashed on them if they even try.
The overwhelming majority of these foreclosures are not contested because it takes a lot of tenacity, heart, courage, and mostly CASH (tens of thousands of dollars) to attempt to fight a wrongful foreclosure. The Courts are incredibly jaundiced (probably from the sheer monotony of the "whining" of borrowers filing through their courtrooms) and it takes a sledgehammer to the head to get the Judge to even READ the lawsuit and contemplate it's meaning. Foreclosure defense attorneys, the few that are actually TRYING to help people, are sleepless and overworked and have soup lines of borrowers begging for help against these behemoths. You can help restore justice in non-judicial foreclosure actions. There is flagrant, unapologetic malfeasance in our foreclosure trustee gravy-train. They are flourishing in their garden of amnesty.
As our Attorney General, this falls in your front yard. You are the one who is responsible for calling foul when this occurs. If you don't give speeding tickets, people will speed. Please start enforcing the law. We know that these trustees attend your shrimp feeds and fund raisers and so much more. It's difficult not to see an intentional unwillingness to enforce when complaints are closed within 1 day of filing them with a polite form letter saying, "thanks for your complaint, there's nothing to see here", and reports of blatant malfeasance are ignored. I am sure that is not the case, because that would be ugly indeed.
On behalf of all of the citizens of this state who have suffered at the hands of these illegal tactics, we demand an investigation in which names are named and results are shared publicly. The Trustees appear to be unregulated. Stopping in at their offices and shaking your finger at them IS NOT WORKING. They have a giggle fest the moment the door closes at your back. You must ACT in such a way that the behavior STOPS and then we the public feel secure that our interests are being considered by the person we elected to consider them.
Thank you and we look forward to press releases of enforcement actions, because we know they are making some illegal mistakes and creating new victims every Friday at foreclosure auctions across our State.