Federal attorneys announced Thursday that a settlement was reached in a case against a now-defunct Bellevue company accused of foreclosing on homes owned by military service members without obtaining required court orders — a claim initially raised more than two years ago by a Vancouver resident.
The lawsuit, filed in November in U.S. District Court for the Western District of Washington, alleged that Northwest Trustee Services Inc., violated the Servicemembers Civil Relief Act, which protects the rights of service members who are on active duty by suspending or modifying certain civil obligations.
The law prohibits foreclosing on the home of a service member during active military service and one year afterward without a court order if the mortgage originated before the service member’s period of active military service.
Over a seven-year period, Northwest Trustee Services Inc., foreclosed illegally on at least 28 homes owned by military service members, according to the lawsuit.
Under the terms of the settlement, service members who had their homes illegally foreclosed may get compensation of up to $125,000. The company’s total required payout to service members is $750,000, according to the U.S. Department of Justice.
The company closed in December and is being liquidated in state court.
“Those who serve in our military deserve zealous representation of their rights,” U.S. Attorney Annette L. Hayes said 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 Department of Justice launched an investigation into the company’s practices after U.S. Marine Corps veteran Jacob McGreevey of Vancouver submitted a complaint to the department’s Servicemembers and Veterans Initiative in May 2016.
McGreevey’s home was foreclosed on in 2010, less than two months following his release from active duty in Operation Iraqi Freedom.
He told The Columbian at the time that the foreclosure was “detrimental to my personal life” and said it led to his decision to return to a fourth tour of active duty.
“The hardest part was just coming home and losing your home,” he said.
In 2016, McGreevey sued both Northwest Trustee Services Inc., and his mortgage servicer, PHH Mortgage. But a judge accepted the companies’ argument that McGreevey had waited too long to file his claim and dismissed the case.
But thanks to McGreevey’s complaint, federal prosecutors became involved and found that the veteran wasn’t the only victim.
McGreevey could not be reached for comment about the settlement, which was the Department of Justice’s first lawsuit related to the Servicemembers Civil Relief Act.
The department’s enforcement of the law is carried out by the Civil Rights Division’s Housing and Civil Enforcement Section, often in partnership with federal prosecutors. This case was jointly handled by Assistant U.S. Attorneys Christina Fogg and Kyle Forsyth 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.
