DS News

66 I N D U S T R Y I N S I G H T / L A N C E O L S E N In June, sweeping changes to the Washington Deed of Trust Act will go into effect—impacting everything from how and when servicers can secure and preserve aban- doned property to the fees paid to conduct foreclosures in Washington to the definition of who may be a beneficiary entitled to foreclose. Perhaps most immediately relevant to loan servicers is a series of changes intended to address the impact of the Jordan v. Nationstar decision of 2016. Jordan severely limited the ability of a mortgage servicer to enforce those provisions of the deed of trust that require a bor- rower to preserve and maintain property pledged as security for a loan. Under the decision, loan servicers cannot safely enter onto property for the purpose of securing, preserving, or main- taining property absent consent of the borrower or a court order. Jordan put at risk any servicer completing cer- tain preservation activities in a state that might have laws similar to Washington. Specifically, any state that explicitly restricts possession to a creditor until after final sale. Under such a law, a court could hold that actions such as the change of a lock or even entry into the property itself are tantamount to possession and thus trespass. e new law in Washington stops short of restoring the contractual rights of entry to a servicer but does introduce a third option for entry. DELVING INTO THE DETAILS Under the new law, a county, city, or town may notify a mortgage servicer that a property has been determined to be abandoned, in mid-foreclosure, and a nuisance. Upon receipt of this notice, a mortgage servicer or its designee may enter the property. Entry on to the property will be only for the purposes of abating the identified nuisance, preserving property, or preventing waste, but the servicer may take steps to secure the property. However, the right to enter, preserve, and secure is not without limitation and instruction. Specifically, a servicer or its designee must » Make a record of entry by means of time- stamped photographs showing the manner of entry and personal items visible within the residence upon entry. » Not remove personal items from the property unless items are hazardous or perishable, and in such case of removal must inventory the items removed » e servicer must post a notice on the front door that includes: » A statement that prior to foreclosure the borrower/owner or occupant authorized by the borrower/owner has the right to possession; and » A statement that the owner or authorized occupant has the right to request that any locks installed by the servicer be removed within 24 hours and replaced with new locks accessible only by the owner or authorized occupant; and » A toll free, 24-hour number that the owner or authorized occupant may call in order to gain timely entry, which entry must be provided no later than UNTANGLING THE WEB OF FORECLOSURE COMPLICATIONS

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