New consumer protection law

Here's more info about the new consumer protection law recently enacted by our State legislature.

The following text is reprinted from a press release issued by the office of Attorney General Rob McKenna. The full text can be found at www.atg.wa.gov.

A new state law to help protect financially strapped homeowners from equity skimming and foreclosure rescue scams in Washington went into effect June 12, 2008. The new law provides safeguards for people trying to stop the loss of their home and requires new disclosures and responsibilities for individuals claiming to help homeowners avoid foreclosure.

The new law addresses two common types of foreclosure rescue scheme perpetrators:
1) Distressed home purchasers, who lead homeowners to sign over the deed to their property by promising to sell the home back once the homeowners get back on their feet financially and allowing them to remain in the home as tenants in the meantime.
2) Distress home consultants, who offer phantom help to homeowners in financial distress, typically with false promises toe “stop the foreclosure” or “save the home.”

Distressed Homeowner Protections: The following distressed homeowner protections apply only when a purchase agreement includes an offer for the original homeowner to lease the home and buy it back or receive a portion of proceeds of any resale:

Distressed home purchasers must provide homeowners with a written contract completely describing the terms of the sale and giving the homeowner a right to cancel the sale for within five days.
• Prior to the sale, the purchaser must verify that the homeowner has the ability to make rental payments and to buy the home back.
• If the homeowner is unable to buy the home back, he or she must receive at least 82 percent of the fair market value of the home at the time the homeowner loses possession of the home.
• A homeowner injured by a violation of the statute may collect up to three times the amount of actual damages, not to exceed $100,000.

If you believe you are a victim of an equity skimming or foreclosure rescue scam, here’s what to do:

1. File a complaint with the Attorney General’s Office either online at: http://atg.wa.gov/FileAComplaint.aspx or by mail. You may call our Consumer Resource Center at 1-800-551-4636 between 10 a.m. and 3 p.m. weekdays to request a form.
2. Speak with a homeownership counselor. Contact the Washington State Homeownership Information Hotline at 1-877-894-HOME (1-877-894-4663) or visit www.homeownership.wa.gov for a list of counselors in your area.
3. Consult with an attorney. Low-income residents can contact the Northwest Justice Project’s legal aid advice and referral hotline (1-888-201-1014) – called CLEAR – weekdays from 9:15 a.m. until 12:15 p.m., and Tuesdays from 3:30 p.m. until 6:15 p.m. If you are 60 or over you may call CLEAR*Sr at 1-888-387-7111 regardless of income.