Quality Loan Service Corporation of Washington was ordered to pay the estate of Mrs. Dorothy Halstien two hundred thirty thousand dollars for selling the now deceased woman’s Whidbey home at auction after she fell behind in payments.
Legal Professionals believe this is the first case to reach a jury verdict in Washington that involves a foreclosure company.
Quality Loan Service Corporation sold Dorothy Halstien’s home on February 29th of 2008 for a little over eight three thousand dollars. The company sold the home at auction after Ms. Halstien’s court appointed guardian notified the company that a buyer had signed a contract to purchase the property for two hundred thirty five thousand dollars in March of 2008 and had presented the necessary documents to Quality Loan Service Corporation eleven days prior to the audition sale.
Quality Loan Service Corporation during the trial contended that it did not have the authority to stop the auction sale and that only the lender Washington Mutual had the authority to stop any proceedings and or to delay the sale of the property.
The property was sold at auction for one dollar over the asking price of eighty three thousand dollars.
The jury found that Quality Loan Service Corporation and its parent company violated Washington States Consumer Protection Act and breached the contract that it had with Halstein.
Quality Loan Service Corporation requested a motion to stop the company from conducting business in Washington State until they changed their business practices be lifted. A judge denied the motion to stop the company from conducting business thus allowing Quality Loan Service Corporation to conduct business in Washington State. The Superior Court Judge, Barbara Mack issued a warning to the company in her decision. She stated that the court assumes that Quality Loan Service Corporation will follow the law in all future transactions and fulfill its duty of good faith to borrowers, lest it face endless litigation.
Dianne Klem, Executive Director of Puget Sound Guardians was appointed administrator to Halstien’s estate in January of 2007. The judgment from the jury trial will go to pay Mrs. Halstien’s medical bills, creditors and any remaining monies will go to her son and daughter.
Dianne Klem explained that most home foreclosures are handled outside of the court but in Mrs. Halstien’s case Quality Loan Service Corporation was appointed by the bank to foreclose on the home. Washington State law states that the trustee must be impartial in deciding if a foreclosure is to be postponed or not.
Quality Loan Service Corporation was not according to documents present to the jury at trial that were obtained by Washington Mutual. Washington Mutual in the document clearly notified Quality Loan Service Corporation that it was not authorized to postpone a foreclosure without consent of Washington Mutual. Quality Loan Service Corporation however under Washington State Law had that authority to postpone foreclosure however it followed Washington Mutual’s instructions.
Frederick Corbit, Senior Attorney for Northwest Justice Project which represented Puget Sound Guardians in the case stated that a trustee is not a repo agent and any trustee would have postponed the sale for three weeks at a minimum.
Quality Loan Service Corporation spokesperson, Kevin McCathy declined comment. Washington Mutual was not included in the suit as the company become insolvent in 2008.
The late Mrs. Halstein’s home was original purchased in 1996 and she paid the mortgage with her Social Security and Teamster’s pension. Mrs. Halstein refinanced the home in 2004 with Washington Mutual on an adjustable rate loan for seventy three thousand dollars.
Mrs. Halstein was appointed a guardian in January of 2007 after claims her daughter was neglecting her. Mrs. Halstein had developed dementia, suffered a broken hip and been admitted into nursing care. The guardian that was appointed was Puget Sound Guardians. According to records her monthly income was quickly taken over by medical bills and left nothing to pay the mortgage. All income went to the state for her medical needs.
Quality Loan Service Corporation received a notice in October of 2007 in regards to the default on Mrs. Halstein’s home. Mrs. Halstein’s daughter was evicted from the home and Quality Loan Service Corporation received approval from a judge to list the property for sale. Puget Sound Guardians also received the notice.
David Greenfield, Asset Manager for Puget Sound Guardians in an attempt to sell the property and retain funds for Mrs. Halstien’s creditors began to attempt to stop foreclosure auction.
Mr. Greenfield contacted Quality Loan Service Corporation on January 10th of 2008 and requested that the foreclosure be delayed. Mr. Greenfield was informed that the auction would be postponed if Washington Mutual received a signed purchase agreement by February 19th; ten days before the scheduled action. Mr. Greenfield received some offers for the property but by February 18 those offers had fallen through. Mr. Greenfield however did have a buyer that was pre-approved by a lender and had a signed contract.
Mr. Greenfield contract Quality Loan Service Corporation and notified them on February 19th of the pending sale. Representatives from the company told him that only Washington Mutual could delay the auction. Mr. Greenfield over the next ten days attempted to notify Washington Mutual to stop the sale by making numerous calls and faxing paperwork. He faxed paperwork on February 19th and 21st and received no response. He contract Washington Mutual via telephone again on February 22nd and spoke with a representative who led him to believe that the bank was making a decision. He had received no response after three days and again called Washington Mutual. He was then told to fax over paperwork to Washington Mutual’s Florida Department. He did not receive any response by February 27th. He called the company again and was told to fax the paperwork with the headline “RUSH SALE DATE 2/29/08”. He did and received no response. The day of the auction he call the company however it was too late Mrs. Halstien’s property had been sold.
State law allowed Quality Loan Service Corporation to delay the foreclosure yet it failed to do so and allowed the lender to instruction their decision thus removing their impartial status within the transaction.
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