Washington State Invalidates Common Mortgage Provision

SEATTLE (AP) — Consumer groups say a recent ruling from the Washington state Supreme Court could have a broad effect on how some mortgage companies respond when homeowners miss payments.

The court this month said that under state law, the companies can't change the locks on homes without going through foreclosure proceedings — despite standard terms in mortgage documents that might otherwise allow it. The ruling clears the way for a federal class-action lawsuit against Nationstar Mortgage LLC on behalf of at least 3,600 homeowners in the state.

Many of the homeowners say they were locked out without notice after vendors hired by Nationstar incorrectly determined the properties were abandoned.

John Rao, an attorney for the Boston-based National Consumer Law Center, says he expects Washington's ruling to inspire more class-action lawsuits around the country.