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2009 Senate Bill 5810: Concerning foreclosures on deeds of trust
Introduced by Sen. Claudia Kauffman, (D-Kent) (D) on February 3, 2009
Revises foreclosure procedure. Requires that a mortgagee, beneficiary, or authorized agent shall contact the borrower in person or by telephone in order to assess the borrower's financial situation and explore options for the borrower to avoid foreclosure. (See also Companion HB 1942).   Official Text and Analysis.
Referred to the Senate Financial Institutions, Housing & Insurance Committee on February 3, 2009
Substitute offered in the Senate on February 25, 2009
Removes the provisions describing the financial preconditions for workout plan are removed. The duty of the trustee is clarified. The claims not waived by the borrower's failure to bring a lawsuit enjoining the foreclosure sale are clarified. These claims must be asserted within two years of the foreclosure sale.
The substitute failed by voice vote in the Senate on February 25, 2009
Referred to the Senate Rules Committee on February 25, 2009
Amendment offered by Sen. Claudia Kauffman, (D-Kent) (D) on March 12, 2009
To clarify that in addition to contacting a borrower in default, the beneficiary or its authorized agent shall also include the Loss Mitigation Form with the Notice of Default. Language that the foreclosure may be enjoined if a lender has not been responsive to a borrower's attempts to contact the lender is removed. Language stating that the trustee must act in the borrower's best interest is removed. Claims that are not waived with the foreclosure sale must be brought within 2 years instead of 1 year. Specifies that contact information for the Department of Financial Institutions, the Washington State Bar Association, and the Office of Civil Legal Aid be provided. Prior to the Notice of Sale being recorded, the Trustee is to have proof that the beneficiary is the actual holder of the promissory note or other obligation secured by the Deed of Trust. It is clarified that a new purchaser may offer a lease to a tenant of the foreclosed property, or may offer a cash payment in exchange for the tenant vacating the property prior to the 60 days otherwise provided for.
The amendment passed by voice vote in the Senate on March 12, 2009
Amendment offered by Sen. Don Benton (Vancouver) (R) on March 12, 2009
To remove the following provisions concerning what claims survive a foreclosure sale: Breach of contract; Failure of trustee to materially comply with provisions of this chapter; Allowing damages where the beneficiary still owns the property at the time the action is filed; Relief to the grantor, if in the same action, the grantor is alleging a violation of chapter 19.86 RCW based on the same fact, is limited to actual damages, treble damages, costs of suit, including reasonable attorneys' fees. The term in which a claim must be asserted is amended to one year from two. Language is also amended so that claims may not in any way affect the validity or finality of the foreclosure sale or a subsequent transfer of the property to a bona fide purchaser.
The amendment failed by voice vote in the Senate on March 12, 2009
Received in the House on March 13, 2009
Referred to the House Judiciary Committee on March 13, 2009
Amendment offered in the House on March 26, 2009
To require the beneficiary's initial contact to be by letter as well as by phone; provides that the contact requirement does not apply when the beneficiary is a homeowner or condominium association; removes the provision allowing the claim to be raised in an unlawful detainer action; removes breach of contract from the types of claims that are not waived. The amendment makes many other changes and removes various sections.
The amendment passed by voice vote in the House on March 26, 2009
Referred to the House Rules Committee on March 30, 2009
Received in the Senate on April 20, 2009
Signed by Gov. Christine Gregoire on April 30, 2009
For deeds of trust made from January 1, 2003, to December 31, 2007, for owner-occupied, residential property, a 30-day extension is made to the current timeline for foreclosure. Thirty days must pass from the time the lender contacts the borrower or shows reasonable effort, before the notice of default can be filed. Outlines certain exemptions and details other obligations of the lender to the borrower in the notification process.