New Washington Law Requires Your Homeloan Lender To Meet With You In Person to Discuss Your Options

Foreclosure Fairness Act: Good News for Washington Homeowners who are Struggling to Make Payments on their Homes

If you are falling behind on your mortgage payments and afraid of losing your home, you may be eligible for a new consumer-friendly program created by a new law recently passed in Washington state. The new law, known was the Foreclosure Fairness Act, goes into effect July 23, 2011. The Act will give homeowners who have defaulted on payments more time and more opportunities to work with their lenders to find an alternative to foreclosure. Specifically, the new law will allow 60 extra days for negotiation as well as a third-party mediation program in which you may meet face to face with your lender to attempt negotiation on your loan. The legislature passed this law with consumers in mind and is an attempt to significantly reduce the number of foreclosures occurring in Washington state.

The Foreclosure Fairness Act is going to substantially change the foreclosure process in order to benefit struggling homeowners. Currently, many homeowners are foreclosed upon because their lenders avoid negotiating with them. Under the new law, lenders will no longer be allowed to avoid you.

First, lenders will be required to attend an initial face-to-face meeting with you after you default on your payment. If nothing is resolved at this meeting and the lender wants to continue the foreclosure process, you may request a mediation session with your lender. Your lender must also attend the mediation session. The mediation session will be conducted by a neutral third party and will essentially put the foreclosure process on hold. At the meeting, your lender is required to consider both your current and future economic circumstances and your possible eligibility for any federal mortgage relief program. Requiring face to face negotiations between lenders and borrowers will give borrowers far more opportunities to modify their loans or to seek other avenues in order to avoid foreclosure.

You may qualify for the new mediation program if: 

• you are the borrower under a deed of trust for residential real property;
• you are in default on payments or in danger of defaulting on payments;
• a Notice of Sale has NOT been recorded on the property; AND
• you hire an attorney or housing counselor BEFORE the Notice of Sale is issued.

Important: even if you are already in the foreclosure process, you may still be eligible for mediation. The law generously provides for borrowers who have already received a Notice of Default to still be eligible for mediation.

You may NOT qualify for the new mediation program if: 

• a Notice of Sale has already been issued;
• the deed of trust is for a commercial loan;
• the deed of trust is securing obligations of a grantor who is not the borrower or a guarantor; OR
• the deed of trust is securing a purchaser’s obligations under a seller-financed sale.

Important: this means that if you are in the foreclosure process but Notice of Sale has not yet been issued, you need to hire an attorney or housing counselor AS SOON AS POSSIBLE to request mediation. If you do not request mediation before the Notice of Sale is issued, you will no longer be eligible.

Also very important: In order to partake in the new mediation program, YOU MUST BE REPRESENTED BY EITHER A HOUSING COUNSELOR OR ATTORNEY. Only a housing counselor or attorney representing a borrower can refer a foreclosure case to mediation. Therefore, if you want to take advantage of the new opportunities granted by the Act, you MUST hire an attorney or housing counselor as soon as possible.

Don’t miss out on taking advantage of this new program; it could mean the difference between keeping or losing your home. Contact The Law Offices of Christopher A. Benson today to schedule a consultation for a special rate of $150 so that we may help you benefit from this great new opportunity.