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» VISIT US ONLINE @ DSNEWS.COM 69 is deceased, there is no effective way to provide notice to the borrower. us, the foreclosure must proceed judicially. Under the new law, in the case where a borrower is known to the mortgage servicer or trustee to be deceased, the notice of default must be: sent to any spouse, child, or parent of the borrower known to the trustee or servicer, and to any record owner of the property; at any address provided to the trustee or servicer; as well as the property address to the heirs and devisees of the borrower. If the Trustee or Servicer does not have addresses for all required recipients, then the trustee must complete "due diligence." is includes a search of the public records and information for any obituary, will, death certificate, or case in probate within the county for the borrower and grantor, in the county where the property is located. If the search fails to result in the identification of any required recipient, then the trustee must record with the Notice of Sale (NOS) a declaration attesting to the completion of the search and results. Once the NOS has been sent, if a party contacts the trustee or servicer and claims to be a successor in interest to the borrower, then the claiming party will have 30 days to provide proof of the death of the borrower and then an additional 60 days to provide proof of their interest in the property. If such proof is provided, then the claiming party will be considered a successor in interest with rights to certain listed information, including the payoff and reinstatement amounts for the loan. It is important to note that even if a party is determined to be a successor in interest, the statue does not impose any affirmative duty on the mortgage servicer to alter any obligation or provide any loan modification. Further, the servicer and trustee are free to proceed with the non-judicial foreclosure after provision of the required material. If a potential successor in interest fails to reach out the trustee or servicer until after the recording of the NOS, the obligations of the trustee and servicer will depend on when the potential successor reaches out with a claim. Only if the potential successor contacts the trustee or servicer more than 45 days before the scheduled sale must the servicer then provide information on the loan not less than 20 days before the sale is called. Any request received less than 45 days before the sale must still be answered, but postponement of the sale will not be required by statute. Although the new procedure will increase the cost of the non-judicial foreclosure as the due diligence procedure will include necessary fees and costs, the savings in time and costs over the current judicial process will more than compensate for those increases. RAISING THE ROOF ON FORECLOSURE TAXATION As the number of defaults have decreased dramatically in Washington, so has the revenue collected for funding Housing Counseling and Mediation programs. To address this funding shortfall, the legislature has increased the assessment for recording of a Notice of Trustee's Sale from $250.00 per Notice to $325.00 per Notice. Further, a new mechanism has been added for increasing or decreasing this amount as conditions dictate. It is important to remember that these fees are due for all beneficiaries who record more than 50 NOSs per year. A beneficiary may be exempt from participating in the mediation program if it is a federally insured institution that did not complete more than 250 sales in the preceding calendar year, but payment of the $325.00 per notice fee is due of all beneficiaries who record more than 50 notices in a given year. FOLLOW THE MONEY … OR DON'T e Washington legislature followed a lead of California law during this session with the adoption of a declaration of non- monetary status option. If a trustee is named as a defendant in an action or proceeding, but there are no allegations of unlawful actions or omissions or substantive misdeeds of the trustee, then not less than 35 days after service of the summons and complaint on the trustee, the trustee may file a declaration of nonmonetary status. e declaration must be served as any other pleading would be served and must set forth specific information describing why it believes the declaration is appropriate and the rights of the plaintiff to object to the declaration. If no party thereafter objects within 30 days of the filing, the trustee will continue to be bound by the orders of the court but will not be required to participate further and will not be subject to any monetary award or other damages, fees, or costs. e declaration is somewhat limited in that a party can bring a trustee back into the action if, through the process of discovery new facts are learned that would lead to a claim against the trustee. However, it is hoped that this option will assist in controlling the costs of defense for named trustees where appropriate. One consistent theme of concern during the legislative session was the relative lack of regulation under state law on reverse mortgage foreclosure. A first action that may have more to follow is in a newly required notice now required at least 33 days before the filing of any complaint to judicially foreclose a reverse mortgage. Under the new law, the Department of Commerce will promulgate a form notice that must be sent to the property address and any other address that the servicer or trustee may have for the borrower. is notice, which must be in English and Spanish, will include a description of the nature of the default or claimed reason for the foreclosure as well as the amount of money necessary to cure the default if the default is not the death of the borrower. Failure to send the notice as directed in the form directed will be a per se unfair or deceptive act in trade or commerce affecting the public interest in violation of the Washington Consumer Protection Act. Although the changes to the Washington Deed of Trust Act are broad and far-reaching, they fortunately should have little impact on established procedures for mortgage loan servicers. A small change will be required to limited forms, but most servicer created and executed forms should remain the same. Further, with the exception of deceased borrower cases where the timelines and required processed should lessen, little change should be required to the ordinary workflow.

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