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2011-02-27 15:06:19
Utah Legislature Tackling Wrongful Foreclosures

In this Sunday Edition, a homeowner, an advocate, and the deputy attorney general discuss a plan in the Utah Legislature to provide some recourse to homeowners who lose their homes in a wrongful foreclosure. Watch the 13 minute video and continue reading below.

 

Video Courtesy of KSL.com

More than 32,000 homes in Utah received a foreclosure notice last year. That's one in every 29 houses. It affects every neighborhood. A lot of those foreclosure notices went to people who thought they were meeting all of the lender's demands while following the procedures to apply for a loan modification. Layton City Mayor Steve Curtis almost lost his home.

Marco Fields, founder and executive director of TEEMS Utah, helps people like Curtis who are facing wrongful foreclosure. Deputy Attorney General of Utah, John Swallow, has helped draft legislation to fine lenders that wrongfully foreclose. 'The wrongful foreclosure statute that we are developing now in the legislature will require companies to follow that statute, that process, and make sure the rules are followed that are set forth in the statute. If they don't follow that process, if they break the rules, then there will be a penalty and attorney's fees to the homeowner that's the victim of a wrongful foreclosure.' --John Swallow. Swallow has been working with Sen. Curt Bramble, R-Provo, on SB 261.

This legislation will provide recourse for homeowners who suffer wrongful foreclosures. Utah currently has a foreclosure statute that lays out the process banks and lenders must use in order to foreclose, but currently the requirements of the statute are not being followed. 'The wrongful foreclosure statute that we are developing now in the legislature will require companies to follow that statute, that process, and make sure the rules are followed that are set forth in the statute. If they don't follow that process, if they break the rules, then there will be a penalty and attorney's fees to the homeowner that's the victim of a wrongful foreclosure,' explains Swallow. 'In the bill itself it defines a proper notice of default and a notice of sale. If a company does not follow the rules, the definitions that are set forth in statute, that is defined as a wrongful foreclosure. Again we are trying to give an incentive to companies that are foreclosing to follow the rules set forth in the statute and if they don't follow those rules, and there are victims that are created by that, then the victim will receive actual damages and if they don't correct it within a certain period of time they'll receive a penalty, as well as attorney's fees on top of the damages.' The bill passed in committee and is headed to the senate floor. 'We feel very strongly that it will help with the problem,' Swallow says.

More than 32,000 homes in Utah received a foreclosure notice last year. One of those people is Steve Curtis, the mayor of Layton -- even though he thought we was following the proper procedures to apply for a loan modification. Fields says the SB 261 would have helped Curtis. 'If nothing else this is going to allow a Utah homeowner to retain an attorney to fight the process. And currently under the Utah foreclosure statute nowhere are there actual penalties so the banks are not currently following the statutes,' Fields explains. 'This is going to allow people to actually get the legal support they need.' Swallow agrees. 'There are consequences, but as a practical matter a homeowner who doesn't have any resources to make a house payment really doesn't have the ability to hire a lawyer to pursue that in the courts. There are remedies, but we are going to enhance those penalties and fight for attorney's fees,' he says. 'We think that's a good idea and a good use of state resources and also really very good for the people.' Many banks are following the rules, but the goal of the legislation is to make sure all banks comply. 'I think there are many service organizations and banks in the state of Utah that are following the rules, but we want to make sure that every financial institution, when they are taking away someone's home, someone's property, the legacy that they have, they follow all the rules,' explains Swallow. 'If nothing else this is going to allow a Utah homeowner to retain an attorney to fight the process. This is going to allow people to actually get the legal support they need.' -Marco Fields.

Curtis is speaking out to help others. He says the process has been terrifying to his wife and children. 'My neighborhood matters and I want to just help others better understand the predicament that they might find themselves in, how they can get out of it and where they can go from there,' says Curtis. To help Curtis, Fields reached out to the CEO of Bank of America and received a response. The process of getting the right paper work together did not change, but with senior management overseeing it Curtis' home was saved. 'It's unfortunate that it is who you know or who you can get to, but the reality is that Bank of America now has 50,000 full time employees just handling this crisis in their foreclosure division. It's a lot of employees and they get 100,000 phone calls a day, so unless you can get into those escalation processes it really is hard to go anything less than 8-9 months before you know what your final outcome is,' Fields says.

 
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