Foreclosure trustee owned by BOA settles foreclosure lawsuit

Foreclosure trustee owned by BOA settles foreclosure lawsuit »Play Video

A settlement case signed today bars a foreclosure trustee company owned by Bank Of America from coming after homes in Washington state until it opens a physical-local office, as required by state law.

Recon Trust was sued by the State Attorney General nearly a year ago and is no longer doing business here.  But the state says the final settlement is significant, because it makes it clarifies the position that all foreclosure trustees most abide by Washington's laws.

By law in this state, foreclosure trustee companies must maintain a local physical office in the communities where they're doing business.  The staff must be accessible to homeowners during the foreclosure process, and foreclosure trustees must provide complete, accurate information about the loan, and how you can stop the foreclosure process-- if that's possible. 

State investigators say it's important to remember these requirements because the AG's office is going after other foreclosure trustees that are operating illegally right now.  If a company has started foreclosure proceedings against you, but does not have a local physical address, accessible staff and accurate information-- contact a HUD-certified Housing Counselor immediately and ask for foreclosure mediation. 

By law, if your situation qualifies for mediation, the lender must provide some with authority to make decisions to talk with you and provide information about your loan.  Mediation slows the foreclosure track to allow for a review of your situation.

This latest settlement includes a penalty of nearly $1.1 million which Recon Trust paid last year as part of the  larger $25 Billion National Mortgage Settlement  with Ally, Bank Of America, Citi, Chase and Wells Fargo.

The larger settlement includes compensation funds for each state, to provide "token" refunds to homeowners who wrongfully lost their homes due to illegal foreclosure proceedings.  If you lost your home to foreclosure between January 1, 2008 and December 31, 2012 and feel the foreclosure was improper or illegal, you're urged to fill out a mortgage settlement form.

The state emphasizes that receiving monetary compensation as part of the National Mortgage Settlement will not interfere with any plans you may have to sue the lender.