Bellevue trustee company settles with servicemembers

The company is being liquidated to repay active servicemembers who were illegally foreclosed on.

A Bellevue-based foreclosure services company recently settled allegations that it violated the Servicemembers Civil Relief Act (SCRA) numerous times since 2010, illegally leaving service members without homes.

Northwest Trustee Services, Inc., which closed in December 2017, now is being liquidated in state court receivership proceedings after the settlement required the company to repay military service members impacted by the violations. The original complaint was filed in May 2016 and alleged the company illegally foreclosed 28 homes owned by service members without obtaining court orders required under the SCRA.

Marine veteran Jacob McGreevey of Vancouver, Wash., submitted the complaint after his home was foreclosed less than two months after he returned from active duty in Iraq in August 2010. The case was dismissed due to the length of time it took McGreevey to file, but the following investigation discovered numerous other violations and the company was sued in November 2017.

The settlement, filed on Sept. 27, required Northwest Trustee Services to compensate each impacted service member with as much as $125,000 each and a total payout of as much as $750,000.

Previously, the company provided foreclosure services to mortgage lenders in the western United States, but it was placed into a general receivership on March 28. That means the victims will still receive compensation from the company’s assets, despite it being closed.

“Those who serve in our military deserve zealous representation of their rights,” said U.S. attorney Annette Hayes, who announced the settlement in a press release. “We are working to ensure that service members whose homes were illegally foreclosed on by Northwest Trustee receive up to $125,000 in compensation. Northwest Trustee may have shuttered its foreclosure business, but that does not end its obligation to do right by service members.”

The SCRA protects active service members from that situation by suspending or modifying certain civil obligations, including a prohibition on foreclosing the home of a service member during active military service and one year thereafter without a court order if the mortgage originated prior to the service member’s period of active military service.

Assistant U.S. attorneys Christina Fogg and Kyle Forsyth of the U.S. Attorney’s Office for the Western District of Washington and trial attorneys Alan Martinson and Nicole Siegel of the Civil Rights Division for the U.S. Department of Justice (DOJ) oversaw the case.

“The loss of a home is a devastating blow for anyone — but far worse for active duty service members often called to war zones far from Western Washington,” Hayes said in a press release. “Our investigation revealed that Northwest Trustee Services repeatedly failed to comply with laws that are meant to ensure our service members do not have to fight a two front war— one on behalf of all of us, and the other against illegal foreclosures. My office will continue to work closely with our colleagues in the Civil Rights Division in Washington, D.C. to protect Western Washington service members from this kind of misconduct.”

Northwest Trustee Services could potentially reenter the foreclosure business but would have to abide by and implement DOJ-approved policies, procedures and training, as required by the settlement.

The SCRA also provides certain protections in evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments.

Service members or their dependants can contact the nearest Armed Forces Legal Assistance Program Office if they think their rights are being violated. Locations can be found at legalassistance.law.af.mil.


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