Trustee Ordered To Cough Up The Cash In Wrongful Foreclosure; Conducted Auction Despite Notification By Owner's Court-Appointed Rep Of Pending Sale

In King County, Washington, The Seattle Times reports:

• A King County judge [...] ordered one of the West Coast's major players in the foreclosure industry to pay more than $230,000 to the estate of a disabled senior citizen whose Whidbey Island home was wrongfully auctioned off after she fell behind on payments. Legal experts say it appears to be one of the first home-foreclosure cases to reach a jury verdict in Washington.

• At a foreclosure auction on Feb. 29, 2008, Quality Loan Service Corp. of Washington sold Dorothy Halstien's home for about $83,000 — even though her court-appointed guardian notified the company 11 days earlier of a signed contract to sell the house for $235,000 by mid-March. The auction meant Halstien lost more than $150,000 of her home equity.(1)

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• At the auction, an investor bought Halstien's house for $1 over Quality's opening bid and flipped the property six months later for $235,000, getting the equity that Halstien, a retired factory worker, had built up over decades. Superior Court Judge Barbara Mack's order finalizes a jury verdict in late January that found Quality and its San Diego-based parent company, Quality Loan Service Corp., violated the state Consumer Protection Act and breached its contract with Halstien.

For more, see Washington company must pay estate in wrongful auction.

(1) Reportedly, while Quality had the discretion under state law to postpone the foreclosure, it blindly followed WaMu's instructions to proceed with foreclosure, said Frederick Corbit, senior attorney at nonprofit Northwest Justice Project, which represented the estate's court-appointed guardian, Dianne Klem. "The trustee is not a repo agent," Corbit said. "Any reasonable trustee would have postponed the sale for three weeks."