On August 3, 2016, Goodwin filed an amicus brief in the Washington Supreme Court on behalf of the Mortgage Bankers Association and the Consumer Mortgage Coalition. The case—Jordan v. Nationstar Mortgage LLC—involved a challenge to a servicer’s default-servicing practice of rekeying the lock on the front door of seemingly abandoned property, but leaving a lock-box to permit the borrower to enter the property. On July 7, 2016, the Washington Supreme Court concluded that the servicer’s practice was inconsistent with Washington’s lien theory of mortgages under which lenders may not take possession of property until the completion of a foreclosure sale.
The industry’s amicus brief in support of Nationstar’s request for reconsideration explained how default servicing protects the interests of borrowers, lenders, and communities. The brief detailed how property vacancy often results in physical deterioration and diminished value of the real property, imperiling the lender’s investment, the borrower’s potential recovery of excess funds from the foreclosure sale, and the property values of neighboring community members. The brief also explained that these risks create an ancillary concern for municipalities because they may lead to decreased property-tax yields. Finally, the brief noted preservation activities are also important because states and localities—including some municipalities in Washington—have passed statutes and ordinances that may require some lenders to conduct property maintenance including securing doors and windows against trespassers.
Interested readers may find a copy of the amicus brief here.