Larry Jametsky visits his family home frequently, even though he was evicted from it almost four years ago.
He and his family have been homeless since then, but they’ve stayed near the blue house in the city of SeaTac. “This was my grandparents’ house, my dad’s house,” Jametsky said.
Jametsky is in the throes of a legal battle over the house after he signed over the deed in what he thought was a loan deal. His case and others have caught the attention of the Washington Supreme Court and attorney general as the effects of the housing crisis continue to be felt.
Loan Or Sale?
According to court documents, in 2008 Jametsky owed $10,000 in property taxes and he started looking for a loan.
Then his life went off the rails when his teenage son was killed. Shortly after, he was contacted with an offer. “They came and woke me up and that’s the day that I signed the loan papers, was just three days after losing my 16-year-old son,” Jametsky said. “Anybody shouldn’t have to try and cope or put all that stuff in your head, it’s just too much to try and deal with.”
In the end he received what he thought was a loan. But it turns out Jametsky had signed over the deed to his house for $100,000 even though it was estimated to be worth $230,000. After paying his obligations and inflated fees, Jametsky ultimately received $4,697.
His loan payments were in fact considered rental payments under the agreement he signed. When he realized his mistake he stopped paying and was evicted.
He sued to reverse the sale, under a recent law that protects homeowners from fraud. The lawsuit was thrown out at every level until it came to the Washington Supreme Court. In a unanimous decision earlier this month, the court said Jametsky’s case should be re-examined.
David Leen, Jametsky’s lawyer, said the case is one of several “amazing” decisions in the past year or so where the Washington Supreme Court has bolstered the rights of homeowners.
“They attack a lot of federal court decisions that have been adverse to the homeowners’ position, and they protect homeowners that are in foreclosure or have had a foreclosure without proper notice,” Leen said. “So I think the climate has been very good for the protection of rights of homeowners.”
Rodney Olsen bought Jametsky’s house. Olsen’s lawyer, Aaron Okrent, declined to be interviewed because the case is still ongoing and is headed back to trial. There, Okrent said new evidence will be considered, including what he said is Jametsky’s “conflicting testimony.”
Wrongful Foreclosure Suits
The Washington Supreme Court is scheduled to hear oral arguments in another homeowners’ rights case, that of Florence Frias.
Attorneys for the lenders in the Frias case also declined to be interviewed, but the Washington Bankers Association filed a brief in which it said allowing homeowners to sue for wrongful foreclosure before the sale has taken place would add costs and delays for everyone involved.
Washington Attorney General Bob Ferguson and his predecessor, Rob McKenna, have been involved in the Jametsky and Frias cases and many more. Ferguson said foreclosure prevention has been a priority during both of their terms. Legal settlements have provided funding to help homeowners.
Shannon Smith of the Attorney General’s Office said one role of the office is to press the rights of homeowners in court. “It’s very important to us to remind the court there are very valuable protections for consumers in our state law,” Smith said, “and the court should uphold those laws and make sure that consumers get the legal benefits that our laws entitle them to.”
Smith said they are prevailing in these lawsuits, but it took some time. “My sense is because the mortgage foreclosure crisis really started in 2008 and 2009, and now those cases are working their way through the court, that’s why we’re seeing them now,” she said.
A Question Of Inventory
But are these victories too late to benefit most homeowners affected by the housing crisis?
Foreclosures have declined 55 percent in King County over the last year, according to the website Seattle Bubble.
Real estate investor Stewart McCullum said it’s unclear how many distressed or bank-owned houses are still out there. He said the number of houses he sees being sold at foreclosure auctions has gone way down.
“I guess the big question is, how much inventory is the bank really holding onto and when are they going to let it go?” McCullum said. “As long as they continue to trickle it out, it will have the illusion that there’s not that much inventory, and it actually has helped house values.”
McCullum said after years of turmoil, the housing market seems to be stabilizing. But people are still living the effects of the crash – McCullum bought his own home at a foreclosure auction last year. He said the seller of his home now rents a mother-in-law unit from him in the basement.
As for Jametsky, his case will return to King County Superior Court. If he prevails, he hopes to move back in to the blue house with his girlfriend and their young son. "I would like my home back," he said.