SEATTLE -- The U.S. Department of Justice on Thursday announced a settlement with a Bellevue-based company after allegations it foreclosed on servicemembers' homes without obtaining required court orders.
The complaint filed last year alleged that Northwest Trustee Services, Inc. violated the Servicemembers Civil Relief Act.
According to the Justice Department, servicemembers who had their homes illegally closed upon may receive compensation of $125,000, up to $750,000 in total.
“Those who serve in our military deserve zealous representation of their rights,” said U.S. Attorney Annette L. Hayes. “We are working to ensure that servicemembers 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 servicemembers.”
The company ceased operations in December of 2017 and is now being liquidated, officials said.
“The Civil Rights Division will never waver in our commitment to vindicating the rights of those who devote themselves to the service of our country,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “We hope this case sends a strong message to foreclosure trustee companies and others that all foreclosures must comply with the Servicemembers Civil Relief Act.”
A news released from the Justice Department details what launched the investigation:
"The Department of Justice launched an investigation into Northwest’s practices after United States Marine Corps veteran Jacob McGreevey of Vancouver, Washington submitted a complaint to the Department’s Servicemembers and Veterans Initiative in May 2016. Northwest had foreclosed on McGreevey’s home in August 2010, less than two months after he was released from active duty in Operation Iraqi Freedom. McGreevey sued both PHH Mortgage (his mortgage servicer) and Northwest in 2016, but a U.S. District Court Judge accepted PHH and Northwest’s argument that McGreevy had waited too long to file his case, and dismissed the case on that basis. The Department’s investigation revealed that, in addition to McGreevey, Northwest had unlawfully foreclosed on other homes of SCRA-protected servicemembers since 2010.
"Before entering into receivership, Northwest described itself as a full-service trustee company providing foreclosure services to mortgage lenders in the Western United States. On March 28, Northwest was placed into a General Receivership under Washington State law. The company no longer provides foreclosure services. If it were to reenter the business of providing foreclosure services, the settlement requires the company to implement Department-approved policies, procedures, and training to prevent further SCRA violations."