Washington Homeowners – Save Your Home From Foreclosure!

The Washington Foreclosure Fairness Act allows homeowners in Washington State to sit down with lenders and explore options outside of foreclosure.  The Act is designed to stop the endless loan modification process and lost paperwork.  It also gives homeowners more time to sell their home if a loan modification is not possible.   The Act requires lenders to communicate with homeowners about their right to an in-person meeting and mediation before they can issue a Notice of Default.  But, it only applies to a primary residence and to financial institutions that have conducted 250 or more foreclosure sales annually.

So, if you get a notice of your pre-foreclosure options, do not miss out on the opportunity to take advantage of this new law.  Lenders will typically give you 30 days to notify them in writing of your intent to take advantage of the in-person meeting, but ONLY YOUR ATTORNEY OR HUD COUNSELOR can submit your case to mediation so seek out professional advice before your 30 day window expires!

The Foreclosure Fairness Act Timeline:

• Lender must notify the homeowner by phone or letter of their right to an in-person meeting during a 60-day window before they issue a Notice of Default
• The notice must inform the homeowner of their right to request mediation through an attorney or HUD housing counselor up until the Notice of Trustee Sale is issued (which cannot happen in Washington until 30 after a Notice of Default has been issued).
• Once mediation is requested, the foreclosure process stops until mediation is completed.
• The mediation will take place approximately 55 days after the request is submitted.
• 10 days before the mediation, the homeowner must submit a financial statement and last two years of tax returns.  The lender must submit the loan balance, an itemized list of fees and charges, payment history, net present value and loan modification inputs, and other required documents.
• At the mediation, both the lender and homeowner must participate in good faith.
• The mediator will encourage both parties to examine all options, including loan modification, where the goal is to avoid foreclosure.
• If an agreement is not reached, the foreclosure process will proceed.
• If the lender does not participate in good faith, the homeowner can commence legal action to stop the foreclosure sale in court.

Michele  McNeill is a real estate lawyer in Washington State. She works with Sellers, Real Estate Agents and Negotiators on Short Sale and Foreclosure issues.  This blog is intended to cover general topics for informational purposes only and is not intended to be taken as legal advice or to create an attorney-client relationship.  For more information about  your legal rights and options, please call (425) 455-4307.