What are Possible Remedies for An Unlawful Foreclosure?
If your home has been foreclosed upon, you may be looking for possible remedies for what you may consider an unlawful foreclosure. In Washington state most foreclosure sales have to go through the Washington state non judicial foreclosure process. It is also common during this process for a bank to change servicers which can cause confusion as to who is doing what and whether your trustee sale date has been rescheduled. You should know that under RCW 61.24.040 a servicer change during the foreclosure process is not reason alone to reset the foreclosure process and furthermore courts have ruled that a homeowner was still notified of the possible sale and could have taken court action prior to the trustee sale date. Therefore, it is very difficult to get a property back after a foreclosure sale has occurred if the servicer and trustee will not voluntarily rescind the sale. This also means that homeowners should be pro active to either file bankruptcy to stop a foreclosure sale or file a lawsuit months in advance if possible for injunctive relief to make sure a sale does not happen before you have your day in court. Bankruptcy is the easiest and most cost efficient way to stop a sale, but bankruptcy is not for everyone as circumstances may very from one consumer to another. If filing for injunctive relief in Washington state superior court, you must allow enough time to give all parties notice of the lawsuit and get the case on the courts calendar which can take time.
With that said, after a foreclosure sale, although chances of getting a sale rescinded are slim, a homeowner may be entitled to damages if they believe the foreclosure sale was unlawful, although expect a long costly litigation fight from the bank. In order to mitigate legal fee’s the first step is to report the issue to the Washington State Attorney General if you think you have been taken advantage of by the bank. For more information on remedies for an unlawful foreclosure you can license to attorney Richard Symmes discuss this topic on 1150 KKNW radio here:
Below are possible causes of action for damages if you think your property has been unlawfully foreclosed upon.
File a Claim under the Washington Consumer Protection Act (RCW 19.86)
In order to protect themselves from unfair and deceptive practices, consumers are allowed to bring private suits against individuals and businesses that engage in unfair or deceptive business practices. The consumer may recover actual damages, treble damages ($25,000 maximum in most cases), and attorney’s fees. Two types of actions may be brought under the law: 1) By the Attorney General or 2) By a consumer (under more stringent requirements).
What does a consumer have to prove to win a CPA case
In 1986, the Washington Supreme Court established the current five-part test for a private cause of action: the consumer must show:
- an unfair or deceptive act or practice,
- occurring in the course of trade or commerce
- that affects the public interest and
- causes harm to the consumers’ business or property (Damages)
- Damages caused by the business actions.
- Emotional damages even if related to the business or property damage are not recoverable under the CPA
- Courts have also ruled that Debt collection is subject to the WA CPA (Stevens v Omni Insurance – Div. I 2007).
File a Claim under the Breach of Duty of Good Faith under the WA Deed of Trust Act RCW 61.24.010(4)
The Washington state deed of trust act states that “The trustee has a duty of good faith to the borrower, beneficiary, and grantor.” Further, the WA supreme court has stated “Trustee’s have obligations to all the parties to the deed, including the homeowner: Bain v. Metropolitan Mortgage Group (2012).
File a Claim under Negligence or intentional Misrepresentation
In order to win a claim for damages under negligence theory a consumer would have to prove the following:
- Defendant supplied information for use in a business transaction that was false
- The defendant knew or should have known the information was supplied to guide the plaintiff in a business transaction
- The defendant was negligent in obtaining or communicating the false information
- The plaintiff relied on the false information
- The plaintiffs reliance was reasonable
- The false information proximately caused the plaintiff damages.
These are just some of the possible remedies for an unlawful foreclosure. If you are considering filing a lawsuit against your bank, you should be prepared to be able to finance such a claim and expect push back from the lender or trustee who filed the claim. Claims can often be appealed and tied up in court for years, therefore stopping a sale before it happens through bankruptcy or a pre foreclosure lawsuit is ideal, with the ladder offering no gaurantees a judge will stop your sale. if you want the closest thing to a sure thing to stop a foreclosure sale, filing bankruptcy due to the automatic stay may be the best way to go.
If you are in need of stopping an upcoming foreclosure sale, give Symmes Law Group a call at 206-682-7975 to get the counsel you need and learn about your options.