Mortgage Lockout Class Action Lawsuit Progresses

As recently reported by Reuters, U.S. District Judge Thomas Rice has asked the Washington State Supreme Court to weigh in on whether companies working for Nationstar Mortgage committed trespass by locking homeowners out of their homes before foreclosure proceedings were completed. 

The complaint accused Nationstar of numerous state law violations, including trespass, breach of contract, and violations of the Washington Consumer Protection Act by allegedly entering hundreds of homes without consent. The homeowners are represented by lawyers at Jeffers Danielson Sonn & Aylward (JDSA Law).

The lawsuit said that Nationstar’s vendors have been breaking into homes to change the locks after borrowers default, relying on language in deeds of trust that give lenders the right to enter homes to protect their interests after a homeowner misses a mortgage payment. Despite that language, Nationstar is obliged by Washington state law to seek homeowners’ permission or use a court receiver before taking possession of a home, the lawsuit said.

“The issues in dispute are extremely significant, for Washington state particularly, but would also have national implications,” said Clay Gatens of JDSA Law, lead attorney for the homeowners, adding, “The language governing the entry of homes is in probably the vast majority of deeds of trust nationally.”

Deeds of trust allow lenders to enter property to change locks, board up doors and windows, and make repairs after a homeowner defaults on a loan or abandons a home. Lawyers for the homeowners have argued that such provisions unlawfully deprive a borrower of the right to possession of a home before foreclosure.

The case is Laura Jordan et al v. Nationstar Mortgage, U.S. District Court, Eastern District of Washington, No. 14-cv-0175

For the plaintiffs: Clay Gatens at Jeffers Danielson Sonn & Aylward; and Beau Haynes at Terrell Marshall Daudt & Willie. For the defendant: John Knox at Williams Kastner and Andrew Noble at Severson & Werson.