In a lawsuit filed in the King County Superior Court in Washington state last week, the state of Washington accuses Bank of America subsidiary ReconTrust of “failing to act as a neutral third party in every foreclosure it has conducted since June 2008 at the latest.” This brings around 10,000 foreclosures into question. The complaint also alleges that ReconTrust misrepresented the actual owner of the debt when it conducted foreclosures, thereby preventing borrowers from stopping foreclosures even when it would have been possible. Washington attorney general has said that ReconTrust has ignored warnings and refused to provide information to the investigation, while Bank of America spokeswoman Jumana Bauwens simply responded that “we disagree with the attorney general’s concerns on this issue and will vigorously defend the services of ReconTrust against this challenge.
Because Washington is a non-judicial foreclosure state, there is relatively little oversight when it comes to the foreclosure process. Although foreclosure trustees have been required to identify the owner of the loan and the loan servicer and provide an address and phone number for the servicer since 2009, ReconTrust has, according to the complaint, failed to do this and, in addition, does not maintain an office in the state, although it should be noted that Bauwens has said that the bank has “added a customer assistance center in Washington state to offer face-to-face support for distressed homeowners and…make every effort to help borrowers avoid foreclosure”. The state is asking the court to halt ReconTrust’s practices and is also seeking a $2,000 fine for each violation.
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