Washington Discrimination Laws
WASHINGTON'S DISCRIMINATION LAW - Washington State has taken far greater steps than the Federal Government in protecting minority groups. These laws extend beyond just the real estate industry and are a part of our daily lives in Washington. Minority and handicapped individuals are protected in the areas of insurance, employment, business, etc.
Protected Categories- Washington Discrimination Laws forbid discrimination based on race, color, sex, marital status, creed, national origin, handicap (mental, or physical), or use of guide dogs. They apply in all facets of our lives whether it is having a retail business open to the public or the hiring of individuals for employment.
Broader than the Federal Government - The Real Estate Laws in Washington are broader and more strict than Federal Fair Housing laws. This is true in all facets of real estate including hiring of licensees, renting residential or commercial real estate, representing clients, etc. There are very few exceptions in regard to protected minority categories.
Prosecution - Washington State police powers are extensive as well. Action can be taken by the Department of Licensing, the Attorney General's Office, the Office of Insurance Commissioner, the Washington State Human Rights Commission, etc. Pretty much all departments of the State of Washington can take action in some capacity, but the main power of prosecution is the Washington State Human Rights Commission.
Civil Penalties - Besides action taken by the State, injured parties can take civil action against the wrongful party. There is no limitation on litigation awards to injured parties.
Real Estate Laws
The Washington State Human Rights Commission handles any discrimination claim by an aggrieved party.
Written Complaint - An aggrieved person must file a written complaint within 6 months of the act under Washington State Law. The statute of limitation under State law is 6 months.
State Action - The State laws give a vast amount of discretion to the Human Rights Commission. When a written complaint is lodged, the Commission can:
The evidence of a debt. Washington State has specific requirements regarding the use of promissory notes in financing the purchase of real property.
Payee (EE) - The person who is the lender and will receive the debt payments.
Payor (OR) - The person who has borrowed the money from the payee. The payor makes the promissory note and is to make payment to the payee.
Promissory Note - The payee is allowed to sell the promissory note as a negotiable instrument. The person who buys the note is called the Holder-In-Due-Course. The original payee would sell the note at a discount to obtain owed interest from the debtor. The discount amount would depend on the quality of the promissory note. The lien on the property does not change. Only the ownership of the note would change.
Discounted Note - Later after the note is issued, if the lender wants to sell the note to another lender it will be sold at a discount. This is especially true if interest rates in the market have increased.
Usury is the charging of interest rates that are greater than those allowed by law. The State of Washington has maximum rates of interest that can be charged by various loan contracts. If a lender exceeds these limits it is considered usury.
Maximum Rate - The maximum rate of interest permissible for real estate loans by law is either:
12% Interest - The maximum interest rate allowed is 12 percent Annual Percentage Rate (APR)
4% Higher - Four percentage points over the average "T" bill rate for twenty-six week treasury bills. The T-Bill sales will be based on the previous calendar month sales. You can call any lender and ask for the previous month's T-Bill auction rate and they will tell you.
Limit Exemptions - The following are exempt from protective legislation under the usury laws of the State of Washington:
Businesses - Loans to commercial businesses (regardless of purpose or amount) are not protected under the usury laws of the State of Washington. This includes:
Business - Any person doing business as a sole proprietor (one owner) business.
Farmers - Agricultural loans are not protected under the usury laws of Washington.
Commercial Investments - Any real estate purchased by a commercial business is not protected under the usury laws of the State of Washington.
The following loans would be covered under the Usury Laws of the State of Washington:
Example: A buyer purchases a house for $200,000 and puts $20,000 down on the purchase and finances the remaining $180,000. If the interest rate charged by the lender exceeds the usury regulation, the contract and $180,000 loan is still in effect.
Penalties - The penalties are very severe for those lenders who exceed the usury laws of the State of Washington.
Usurious Contracts - Those that exceed the usury laws.
Debtor Rights - In an action, the lender/holder of a contract is entitled to only
Penalty - The principal LESS the amount of interest accruing at the rate contracted for,
Penalty - The principal minus twice the interest paid by the borrower less the amount of all accrued and unpaid interest.
Legal Costs - The debtor is entitled to any and all costs as well as reasonable attorneys fees plus the amount paid under the contract that exceeds the amount which the creditor is entitled.
In short, the lender/holder would receive less than the original loan. As you can see, the usury laws are very stiff against those who lend above the legal interest rates.
A broker would be guilty of discrimination in Washington if they:
A) refused to hire a salesperson because of his or her sex
B) refused to show a property to a person because of their race
C) refused to accept an offer on a rental property because the person was blind
D) any of the above
Under the Washington State Housing Financing Commission loan program, which of the following is not a requirement?
A) applicants must not have owned a principal residence anytime within the past 5 years
B) applicants income is limited to certain levels by the commission
C) the purchase price cannot exceed certain levels
D) applicant can choose between low-interest loans and income tax credit
Whether a lender uses a mortgage or trust deed, the lender has the option to:
A) receive a deficiency judgment
B) waive their foreclosure rights in the security device and sue for breach on the accompanying Promissory Note and thereby receive a general judgment.
C) foreclosure by advertisement and sale
D) sue for strict foreclosure
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