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March 12, 2010
New law protects families in foreclosure

Consumer protection bills signed during National Consumer Protection Week

OLYMPIA – While the foreclosure crisis continues to swell, the Washington Attorney General’s Office is commemorating National Consumer Protection Week with the passage of a new law that shields families who have lost homes from further harm.

Gov. Chris Gregoire will sign Attorney General Rob McKenna’s consumer protection bills at 1:30 p.m. today in her conference room at the Capitol. One bill protects foreclosure victims and the other guards used car buyers.

House Bill 2428 protects the pocketbooks of families who have lost their homes due to an inability to pay their property taxes. The new law, which was prime-sponsored by Rep. Dean Takko, D-Longview, regulates firms and individuals who contact owners of foreclosed properties offering to obtain money remaining after the auction on their behalf – in return for a cut.

 “As foreclosures have increased, we’ve seen an uptick in get-rich-quick schemes that prey on those who have lost their homes,” Attorney General Rob McKenna said. “This new law is part of our ongoing efforts to help financially strapped families keep the little money they have left.”

Lewis County Treasurer Rose Bowman was a strong proponent of the bill. As Legislative Chair of the Washington State Association of County Treasurers, she and her colleagues had been searching for a solution to a growing problem.

“We were looking for a way to protect our most vulnerable population – people who, for whatever reason, have lost their property to tax foreclosure – and figure out how we can get their money to them and not to others who are trying to claim it.”

The bill places a 5 percent cap on such finder’s fees, the same amount allowed for other kinds of unclaimed funds. Previously, individuals who provided such services kept as much as 50-70 percent of the former homeowner’s money.

Bowman said many of the “finders” use shady tactics, including hounding the original homeowner to sign a paper or trying to convince county officials that they are a relative of the original homeowner, and therefore entitled to the money.

“It’s amazing the lengths they go to try to intercept these funds,” she said.

Bowman said it’s easy – and free – for former property owners to receive surplus funds available after a foreclosure. They just need to fill out a form and have it notarized. A notary at the county will provide the service for no charge.  

McKenna’s other requested bill, House Bill 2429, protects used car buyers. The Attorney General’s Office discovered that used car dealers were obtaining “lemon” vehicles at auctions and reselling them in Washington. Washington’s Lemon Law already required dealerships that sell new cars to disclose whether a vehicle was ever bought back from a manufacturer under another state’s Lemon Law program. But used car dealers weren’t required to make those disclosures.

The new law, sponsored by Rep. Alex Wood, D-Spokane, ensures that used car dealers inform potential buyers that the car’s title will include a comment that that the vehicle was previously returned to the manufacturer and that this may affect the vehicle’s future resale value.

Both bills passed unanimously in the House and Senate.

Media Contact: Kristin Alexander, Media Relations Manager – Seattle, (206) 464-6432,


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