Pierce County Auditor
Pierce County Assessor
King County Auditor
King County Assessor
Washington State Courts
DISTRESS CHANGES EVERYTHING.
New “distressed property” laws affect homeowners, homebuyers and property investors.
On June 12, 2008, new Distressed Property Laws took effect in Washington State. The laws are intended to protect homeowners in pre-foreclosure situations, affording them additional rights and protections, like a 5-business-day right of rescission of a purchase and sale agreement in a "distressed home conveyance transaction." These rights,like tenant rights, cannot be waived by the homeowner.
The term “distressed homeowner” is generally someone whose home is in danger of foreclosure. It also encompasses those homeowners who express a good faith belief that they are likely to default on the mortgage within the upcoming four months and told that to a certain person, like their attorney. But this information would be confidential. In that instance, it can be nearly impossible to identify the group that this law is meant to protect. On the other hand, homebuyers should be alert that almost any homeowner could be considered a distressed homeowner.
Parties who solicit or contact a distressed homeowner in one of thirteen ways are now known as “distressed home consultants.” Financial institutions, nonprofit credit counseling services, licensed attorneys, real estate agents and some licensed mortgage brokers are excepted from this group. A distressed home purchaser might also be a distressed home consultant.
Significant extra steps must be taken and documents prepared in order to protect the distressed homeowner’s rights. This also serves to meet the duties imposed on those who buy a home from, or who have contact with, a distressed homeowner.
The new laws impose fiduciary duties on distressed home consultants. These duties include acting in utmost good faith toward the distressed homeowner and requiring the consultant make a full disclosure of all material facts known to the consultant.
