Friday, March 1, 2013

WSC Slaps Quality as Trustee

Thursday, a decision by the State Supreme Court held that Quality Loan Services failed to use its own best judgment in an impartial manner toward both the beneficiary (read Big Bank) and the borrower (read You).  Consequently, the Trustee breached its duty of good faith and violated Washington State consumer protection laws.  You can read that last sentence as "Trustee, you will pay the homeower's attorney's fees." If that is isn't a slap in the face, then I don't know what one is.

In litigation with numerous servicers and trustees over the last three years, I was told by the Trustee on more than one occasion, "we do what the bank tells us to do."  That, according to the State Supreme Court is a direct violation of the consumer protection act and actionable.  Trustees will significantly review the communications between its staff and the public (and public's attorneys) and make some changes.  I do not think there will be drastic changes, but the spector now looms.

One thing that I do worry about is that overzealous attorneys, quick to obtain attorney's fees, will force what we are seeing out of California, judicial foreclosure.  Be thoughtful in what you bring to court.

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