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The System of Foreclosure in Washington Where in the Banks Hire Trustee Creates Inherent Problems
Dorothy Halstein had taken a loan of $73,000 from Washington Mutual to purchase a house in Whidbey Island, Seattle. Two years later she was hospitalized and later died. Puget Sound Guardians of Richmond took charge of her property while she was in hospital.
One year after Halstein moved out of the house Washington Mutual hired Quality Loan Service to be the trustee and began to foreclose. Although Guardians had found a buyer for $150,000 the house was sold by the bank for $83,000. The third party then raked in a profit by reselling the house for $235,000. Guardians sued Quality after the conclusion of the foreclosure sale. When Halstein died in 2008 November her affairs passed to an estate administrator. The administrator said, “WaMu was never in jeopardy of not being paid in full because Ms Halstein had no other home loans and WaMu’s appraiser concluded on January 18th 2008 that the house was worth $320,000″. He was speaking during the trial. The house was finally sold at a value that was a third of the tax-assessed valuation.
The administrator contended that Quality had hurried through the foreclosure and refused to put brakes on their sale even though Guardians had arranged for a buyer ready to pay a higher price. Quality contended that none other but Washington Mutual had the power to put off the foreclosure sale. The estate administrator alleged that the Quality “misrepresented the duty of the trustee and the authority of the trustee”. According to the estate administrator Guardian had contacted Washington Mutual requesting the bank to delay the foreclosure. The bank did not reply. Washington Mutual meanwhile went bankrupt and dropped off from the suit. Attorney Ronald Adams, who was representing Washington Mutual did not reply to requests for comments. It was claimed by the administrator of the estate that “Quality predated and falsely notarized the notice of foreclosure”.
This made it possible for the foreclosure sale to take place before the scheduled date of 18th March 2008 – it being the closing date for the transaction that had been arranged by Guardian. It was stated, “During trial Quality acknowledged that it predated notarizations” but had stopped this practice from 2007. Quality contented that it had not transgressed the consumer laws of the state. Secondly at the auction Guardia could have halted the sale by showing the purchase agreement.
Thirdly Guardian had failed to notify Quality about not getting any response from the bank. Attorney Melissa Huelsman of Seattle said that the Washington foreclosure system itself generates an “an inherent conflict of interest” because of banks hiring trustees.
Original Post: The System of Foreclosure in Washington Where in the Banks Hire Trustee Creates Inherent Problems
About the Author
Adam Sanderson, has been working on ForeclosureListings.com studying the foreclosures market, helping buyers on the finer points of foreclosure listings. Try to visit ForeclosureListings.com and search Connecticut Foreclosures.
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