Western Banker July/August 2022

While aligned with the overall goal of trying to maximize owner’s eq uity in the sale of the property, CBA and other real estate trade as sociations have argued that the ap proach envisioned by the measure is conceptually flawed and mechan ically unworkable. Fundamentally, the measure ap pears to trample on borrower’s rights. Under the terms of the mea sure, the trustee is required to hire a real estate agent. But, under this established relationship, the real estate agent’s client is the trustee, not the borrower. The legality of a trustee hiring a real estate agent to sell a home that the borrower still owns is questionable. Here the Leg islature is setting a policy that once

the foreclosure process reaches the point of filing a notice of sale, that the borrower’s rights with respect to the property they still own, and perhaps occupy, cease to exist and that a third party will be making decisions that may not be in the best interest of the borrower. In what has historically been a ministerial role, trustees would now be burdened with significant discretion leading to legal liabil ity and potentially clouding future transactions. In fact, it’s question able that a title insurance policy would be issued on transactions under this scheme making these properties toxic. CONTINUED ON PAGE 10

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WesternBanker | Issue 4 2022