Mortgage Foreclosure Fairness Act

The 2011 Legislature passed the Mortgage Foreclosure Fairness Act.  This law is to be effective July 22nd.  Those homeowners in the Woodinville area having trouble making house payments (distressed borrowers) now have the right to a meeting with the lender to negotiate possible solutions to the borrower's default, including: loan modification, short sale terms, deed in lieu of foreclosure and other solutions negotiated between the parties.

The new law applies to lenders who foreclosed at least 250 owner-occupied deeds of trust in the prior year.  Many lenders, but not all, will be mandated to participate in the "Fairness" program.

Under the program the borrower has the right to demand a face-to-face meeting with or without the assistance of a lawyer or housing counselor.   With a lawyer or counselor the borrower has the added right to demand a mediation with the lender.  The State Department of Commerce appoints the mediator.  There's a $400 mediation fee to share.  Lenders must be careful not to engage in "bad faith" negotiations with the borrower. Consumer Protection Act claims are possible.

Owner-occupied residential borrowers residing in Washington State have access to free housing counselors by virtue of home ownership.  Call 1-877-894-HOME (4663).  Think you might qualify for a free lawyer? Then for help call the Washington State Bar Association (WSBA) Home Foreclosure Legal Aid Project through the number, above.  You can also visit the WSBA website www.wsba.org