Editor’s Note: Same caveat as before — this consent ruling, although potentially persuasive to other courts is not evidence of the violations in and of itself, but provides a good pep talk to attorneys out there who are too timid to make statements about the treachery in the acts of the Bank of America, and all others who use the ‘substitution of trustee” as a vehicle to foreclose on properties.
Second caveat: this does not mean that the mortgages are invalid which is a separate subject. Nor does it necessarily mean that Joe Banker (see prior post) has problems when it comes to identifying the creditor and establishing the status of the loan receivable account (primarily because no such account exists, except at the subservicer level which is at best only a partial snapshot of the entire list of transactions concerning each loan subject to claims of securitization.
What it DOES mean is that Recontrust is not doing business in Washington anymore and can’t come back. If it wants to come back, and alternatively one might infer if ANYONE wants to be a substitute trustee or foreclosing trustee, they must meet the following requirements:
1. Maintain physical presence in the State with adequate staffing and knowledgeable people who can actually answer substantive questions about the loan status or so-called default status.
2. The office must be authorized to accept payments to reinstate a mortgage.
3. The office must be authorized in all respects to postpone, reschedule or cancel the foreclosures (this taking out the layers of corporate bureaucracy) which means that someone with real decision-making authority must be physically present in the office during normal business hours.
4. Discloses the contact information for the State office to the borrower.
5. Identifies the actual creditor with a loan receivable that is due and the same information for the authorized servicer for that loan.
6. Provides proof that the “note holder” actually has an enforceable interest. That means they must show and prove the existence of the actual loan receivable and the person or entity to whom the obligation is owed.
7. Applies fees and costs only as allowed by law.
8. Acts in good faith toward the borrower. “For purposes of this Consent Judgment only, it is a breach of good faith to enter into an agreement with a note owner, beneficiary or its agent wherein Defendant agrees to stop or postpone a foreclosure only when approved by the note owner, beneficiary or agent, or to defy solely to a single party when acting as a trustee.” [That is because it is a breach of the statutory duties of the trustee to bind itself contractually to following the orders of the beneficiary only and not include the duties of good faith toward the Trustor].
9. They cannot act as both trustee and beneficiary. [Implication: if the Trustee that is substituted is owned or controlled, contractually or otherwise, by the beneficiary they may not serve as Trustee.]
10. Trustees cannot only refer to defaults in fact, not as reported. What this means in terms the degree of due diligence required is yet to be determined.