In 2011, the Washington Department of Commerce established the Washington State Foreclosure Fairness Program created by the Foreclosure Fairness Act. This program was designed to give borrowers the necessary counsel they might require to navigate the complicated foreclosure process. The act empowers borrowers to seek counsel early and negotiate with lenders so that lenders are less likely to have to follow through with the lengthy task of foreclosing on a defaulted property.
Because of these protections for borrowers, lenders in Washington state are encouraged to understand the rights given to borrowers under the act and to behave in compliance.
Related Article: Four Things Lenders Should Pay Attention to in the Nevada Homeowners’ Bill of Rights
Three Things Lenders Should Pay Attention to in the Washington State Foreclosure Fairness Program
Necessary Foreclosure Notices
The Washington State Foreclosure Fairness Act alerts borrowers to the sequence of notices that they can expect to receive if they go into default. Lenders are required to send the borrower a notice before beginning the foreclosure process, known as the Notice of Pre-foreclosure Options.
This document outlines the mediation options available to borrowers, including foreclosure counseling and the possibility of mediation. For many homeowners of single unit residencies, this service can be free, which lenders are required to tell their borrowers before issuing the notice of default.
Foreclosure Mediation
Borrowers must be referred by either their housing counselor or an attorney to participate in foreclosure mediation. If the lender receives a request for mediation before they issue the notice of sale, the notice cannot be recorded until mediation is completed. Once a mediator is assigned to the case, the lender must then send the necessary documents to both the homeowner and the mediator.
During mediation, the lender must behave in good faith and have someone readily available, either in person or by phone, who has the authority to modify the loan. Both parties will either come to an agreement, and move forward with those modifications, or they will not, and the lender can proceed with the foreclosure. It is crucial, however, that the lender behaves in good faith. Failure to do so is grounds for the homeowner to bring the lender to court and pause the foreclosure sale.
The Washington State Homeowner Assistance Fund
In 2021, the Homeowner’s Assistance Fund was established by the American Rescue Plan Act, in which Washington state received over $173 million. This act was signed to help borrowers who struggled to make payments due to the COVID-19 pandemic. Funds are still available for the state of Washington. Lenders beginning the foreclosure process should be aware that borrowers requesting aid from the assistance fund may pause a foreclosure sale.
Foreclosure Support for Commercial Lenders
Small to medium lenders should rely on a firm that specializes in Washington foreclosure services to help them navigate the complicated foreclosure laws of the state. Total Lender Solutions has a team of highly experienced real estate professionals and legal experts that can turn the complicated foreclosure process into a simple action plan. We work alongside your team to provide comprehensive solutions through every stage of foreclosure. Contact us today.
