And again . . .

Posted June 19th, 2008 by Joe Kaiser

Dear Rob,

It looks like there’s an ongoing effort to spin HB 2791 so your office is not held accountable for this monstrosity . . .

Attorney General McKenna has been working with the Washington State Realtors from the beginning to protect against the unintended consequences in the final version of the bill. Our original bill was modeled after legislation in other states and carefully crafted to allow homeowners to receive help from legitimate real estate professionals. Unfortunately, as noted in a previous NuWire story, the most onerous amendments were added to the bill in the final days of the session without input from either.

Attorney General McKenna and the Washington State Realtors are scheduling a meeting to discuss the legislative fix in the coming weeks. The Washington State Legislature doesn’t come back into session until January. We look forward to working with the industry to return the law to what we all intended-protecting desperate homeowners from the scammers who prey on them.Janelle Guthrie, Communications Director for Attorney General Rob McKenna
Commenting on the InvestorCentric Blog

Pretty much right on cue.


My response . . .

It seemed a response to this nonsense was called for, and so I joined in the fray . . .

Janelle Guthrie knows, or should know, that her office has received a grand total of 4 (!) foreclosure rescue scam complaints over the last five years.

Does that surprise you?

And by the way, in that same period there were many thousands of foreclosures statewide. Statistically, foreclosure rescue scams are insignificant.

Please do not overlook the importance of this fact. FOUR COMPLAINTS, in a five year period, does not a foreclosure scam epidemic make (you can confirm these numbers for yourself by requesting a copy of all such complaints from the AG’s office under the Public Records Act, as I did).

Sure, it does happen, but nothing like we’re led to believe. And when it does, there are plenty of attorneys eager to jump in and sue the scam artists who have acted inappropriately. That seems like a pretty good solution to me.

Creating a new law that up-ends the entire real estate marketplace was incredibly dumb, and I’m trying to be kind here.

Let’s be clear . . . the original bill was a monstrosity. It stripped owners in foreclosure of their right to freely contract and forced them to needlessly jump through countless hopes in order to save their homes. With little time to spare, it makes stopping foreclosure a virtual impossibility.

Worse, it demonstrated a complete lack of understanding of the plight of people facing foreclosure. Having reviewed it early and seeing it as a train wreck even then, I suggest it’s not something the AG’s office should now be touting as “carefully crafted.”

In reality, it, too, was a disaster in the making.

Creating laws that demand people in foreclosure be protected, to the point they lose their homes because of the protection. Is ludicrous, as is denying them the right to use a power of attorney or require them to be physically present at closing or any of the other numerous restrictions the new law (including the older bill’s version) imposes on them.

Did you know that under the new law, owners (even owners represented by attorneys), aren’t permitted to opt-out of the so-called protection, even if it means they won’t be able to save their homes?

This is the AG’s office saying to Washington state citizens, “we know what’s best for you because you’re to dumb to handle your own affairs.” This is not the purpose of government and we should not stand for it.

The foreclosure rescue scam crisis in the state of Washington is a hoax, as Janell Guthrie and the AG’s office knows. In reality, legislators were hoodwinked into believing the AG’s claim a new law to protect families in foreclosure was desperately needed.

It wasn’t. The old one was working just fine, thank you.

And now, because of the incredible incompetence of the drafters of this new law, homeowners will lose their homes, making this the debacle of the decade.

The AG’s office contends there are 18 states that now have similar laws. Correct me if I’m wrong, but doesn’t that mean 32 do not? I suggest the 32 states abstaining from participating in (and fueling) the foreclosure rescue scam hysteria should be commended and their approach should become our own model.

Stripping homeowners of the right to freely contract is not protection, Janelle, it’s interference that we as citizens MUST NOT TOLERATE.

And for your office to do so merely for the easy political gain in this, an election year (who’d be against saving people from foreclosure scam artists?) is particularly sickening. SHAME ON YOU.

Make no mistake about it, Janelle, because of your office, at-risk homeowners in this state WILL LOSE THEIR HOMES and there will be no one to blame but Mr. Rob McKenna himself.

I suspect they’d all appreciate it if you’d just get out of the way so we agents and/or investors can provide them with the meaningful solutions they desperately seek.


Accountability

Desperately seeking to avoid any accountability for a law that would not otherwise exist were it not for the efforts of your office, Rob, tells us all we need to know . . . and it ain’t good.

In the arena,

Joe Kaiser


6 Responses to: “And again . . .”

  1. Lyal responds:
    Posted: June 20th, 2008 at 4:37 am

    In the first paragraph “to allow homeowners to receive help from legitimate real estate professionals”. Are they really saying that real estate agents are professionals?

    Apologies to those few (maybe 2%) of real estate agents and brokers who are real pros but putting desperate people in the hands of the majority of agents as a savior is absolutely ridiculous. It’s been proven over and over again to me that, regardless of their fiduciary responsibilities, they’ll do or say ANYTHING with the simple goal of collecting a check at closing, buyers / sellers be damned.

    To cast RE agents as legitimate and investors as the opposite demonstrates boundless ignorance (and arrogance) on the part of the accusers.
    Lyal

  2. DaveD responds:
    Posted: June 20th, 2008 at 7:04 am

    I’m sure (I think) attorneys have their own version of the Hippocratic Oath (do thy patient no harm…)

    But doesn’t this “medicine” directly contribute to the death (loss of house) of the homeowner? Whether it be death from a thousand cuts (you have to jump these hoops), or a jackboot on their throats (you can’t do this), these homeowners are in peril moreso from Rob and his ilk than any market solution.

    So who polices those in power who arrogantly abuse their power? And what remedy is there to the homeowner who no longer isn’t, thanks to Rob?

  3. anemonehead responds:
    Posted: June 20th, 2008 at 7:14 am

    6 months plus before it’s fixed…maybe. I wonder how many “unintended consequences” will be forclosed on in the mean time?

    Rob, you do understand that “unintended consequences” have names and families, don’t you?

  4. Eric responds:
    Posted: June 20th, 2008 at 10:11 am

    Joe,

    I know you like to blame Rob for this whole mess, but I really truly think that the changes which were made to the bill were not his doing. Have you read through the first edition of the bill? This is the one that Rob and the NAR collaborated on, and overall I don’t think it is all that bad. What it was turned into though is a complete mess. The fiduciary bit, and the vague definition of what constitutes a distressed homeowner, along with basically every thing else that is controversial all came later on without the input of Rob or the NAR.

    He doesn’t have the authority to make or vote on these changes anyway, but even if he did why would he recommend them and then turn his back on them immediately and push for them to be changed? A case could be made once they actually proved to be disastrous, but they have yet to be proved one way or the other because it is so new.

    Anyway I thought I’d share that with you, and I really do suggest you read the original bill if you haven’t already. Sure Rob may have something out for you personally, who knows, but the final outcome of this bill was in no way his doing.

  5. Joe Kaiser responds:
    Posted: June 20th, 2008 at 12:46 pm

    Eric, I could not disagree with you more.

    Certainly, it turned ugly, but it was a terrible idea from the beginning and there is no disputing that had not McKenna asked for this law, it would not exist today. That’s the risk you run when you attempt new law, and Rob should have know this.

    And, you miss at least a few other key elements . . .

    1. There was never a need for this bill in the first place. We now know the entire foreclosure rescue scam crisis in this state is a hoax created by the AG’s office. They’d received a grand total of four foreclosure rescue complaints.

    2. The old version of the bill was a train wreck as well. It strips owners of their right to freely contact. This can never be a good thing, or a not “all that bad” thing. It was based on Minnesota’s disastrous law that had been shown to be a complete mess. The old version was a terrible thing and I wrote about it in its original version way back when.

    Have I read it? I am said to be the reason for it, Eric.

    3. The disaster that’s now said to be not the AG’s fault WAS ENDORSED AND SUPPORTED BY THE AG’S OFFICE PRIOR TO THE VOTE. Assistant AG Jim Sugarman took the stand and said, in no uncertain terms, that the AG’s office was satisfied with it. Had it not been, that would have been the perfect time to say so. Instead, Jim called it “a very simple bill” and gave it Rob’s blessing, saying, “that’s what we’re here in support of today.”

    By uttering those words, Eric, all claims by the AG’s office of “it’s not our fault” can be once and for all put to rest. It is their fault, period.

    Suggesting the final outcome was “in no way his doing” is just flat out wrong, Eric. It’s 100% his doing. When you open Pandora’s box, you become responsible for what happens next. And if it’s not pretty, well, that’s the risk you took.

    Creating the foreclosure rescue scam hoax, bamboozling the legislature into thinking a law like this was needed, assigning its drafting to attorneys with zero real estate experience, modeling existing law in other states already proven to be disasters, and now running away from it and its consequences by pretending anyone other than our AG is to blame is all the evidence we need to understand how things work in that office.

    And by the way, a real man (or woman) would have stood up, taken responsibility, and done whatever it took to fix it. There is nothing remotely like that taking place today.

    Joe Kaiser

  6. Leon responds:
    Posted: June 20th, 2008 at 2:50 pm

    So in conclusion just so you know what it’s like in the real world…

    Rob, YOU’RE FIRED!


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