Attorney General’s foreclosure rescue fraud and identity theft bills scheduled for public hearings tomorrow

 OLYMPIA – Two bills requested by Attorney General Rob McKenna that would protect Washington residents from mortgage foreclosure scams and make it easier to prosecute identity theft cases are scheduled for public hearings on Friday, Jan. 25.Protecting Washington residents from mortgage foreclosure scams

The Senate Committee on Consumer Protection and Housing has scheduled a public hearing at 8:30 a.m. concerning SB 6431. The bill would help reduce foreclosure rescue schemes that include an option to allow the original homeowner to buy or lease back the property from a buyer. It is sponsored by Sens. Rodney Tom, D-Bellevue; Steve Hobbs, D-Lake Stevens; and Jerome Delvin, R-Richland.

“Facing potential foreclosure is traumatic enough but some homeowners are then victimized by cons who trick them into giving up their equity,” McKenna said.

The law would:

• Require a written contract with clearly disclosed terms be completed, signed and dated by the homeowner and the purchaser prior to the property’s transfer;
• Provide the foreclosed homeowner with the right to cancel the contract within five business days;
• Require that the purchaser demonstrate that the foreclosed homeowner is able to meet the terms of the contract including making interest and lease payments and is capable of purchasing the property within the allowable period; and
• Require that the homeowner must receive at least 82 percent of the difference between the property’s fair market value and the underlying mortgage in the event of a sale to a third party.

The House Judiciary Committee, meanwhile, is scheduled to consider a companion bill, HB 2791, during executive session at 8 a.m. Friday. HB 2791 received a public hearing earlier this week and is sponsored by Reps. Patricia Lantz, D-Gig Harbor; Jay Rodne, R-North Bend, and Troy Kelley, D-University Place.

SB 6431 and HB 2791 were modeled after 2004 legislation enacted in Minnesota and similar laws subsequently passed in Illinois, California and several other states.

Improving successful identity theft prosecution

Police, prosecutors and criminal defense attorneys routinely rely on records as evidence. Law enforcement and prosecutors report that investigations are frequently prolonged by legal processes that require individuals to testify to the authenticity of records before they are submitted as evidence.

HB 2637 would allow records provided by out-of-state businesses to be authenticated by affidavit rather than in person in criminal cases. When properly served with a request for records, the recipient must provide the records within 20 business days and verify the authenticity by providing a signed affidavit, declaration or certification.

The bill is scheduled for a public hearing at 8 a.m. before the House Judiciary Committee.

“Records custodians often must fly long distances just to testify that a record is authentic, which prolongs the ability to prosecute identity theft and other crimes,” McKenna said. “We need new regulations to ensure a speedy legal process, save costs and clarify procedures that out-of-state businesses must follow when providing requested evidence.”

HB 2637 is sponsored by Reps. Kirk Pearson, R-Monroe; Al O’Brien, D-Mountlake Terrace; Mark Ericks, D-Bothell; Charles Ross, R-Yakima; and Dan Roach, R-Sumner.

The bill was recommended by LEGIT, Washington’s Law Enforcement Group against Identity Theft. McKenna created LEGIT  in 2006 to suggest ways to better ensure successful identity theft prosecutions and reduce the number of crimes that occur in Washington. This policy-advising group is headed up by a King County deputy prosecutor and includes representatives from local police and sheriff’s departments, state government and the private sector.

More information on the Attorney General’s proposed legislative package is available online at http://www.atg.wa.gov/2008Legislation.aspx.