Washington Foreclosure Fairness Act Reaches 2,300 Mark

residential homeNote: Washington state Representative Tina Orwall (D-33), a member of EOI’s Board of Directors, was the prime sponsor of the Foreclosure Fairness Act. Story from the Public News Service.

SEATTLE – Progress is being reported in the second year of Washington State’s Foreclosure Fairness Act (HB 1362), but local attorneys say there is still room for improvement. Bruce Neas, staff attorney with Columbia Legal Services, says the law got off to a slow start, but after 14 months it seems to be gaining traction in helping local homeowners get out from under problem mortgages that have debt greater than their homes are worth – so-called “underwater” mortgages.

“We’ve had 2,300 homeowners request foreclosure mediation. We’re just getting off the ground, though. Those numbers will probably go up, because the numbers of foreclosures are going up in Washington, as well.”

Neas says he has been surprised at how aggressive law firms for some mortgage service companies have been, since the law was crafted in part to help cut lenders’ losses.

Seattle attorney Sheila O’Sullivan with Leen & O’Sullivan, PLLC, says homeowners get a first shot at averting foreclosure that few take advantage of. It happens when they receive their notice of pre-foreclosure options.

“That notice allows them to request a ‘meet and confer,’ which most people don’t understand and don’t take advantage of. Sometimes, they can meet with the lenders and resolve everything, get a modification and stop the process in its tracks.”

O’Sullivan says homeowners get one more chance to modify terms of their mortgage, and this one has a firm deadline. Unfortunately, many are missing it, she adds.

“From the time of the notice of default until 20 days after the notice of trustee’s sale is recorded, they can request mediation. However, we’re getting a lot of people coming in well after that, and we can’t request mediation.”

O’Sullivan credits the recent attorney general’s settlement with the big five mortgage service companies as a major factor in providing more incentive for those companies to modify local “underwater” mortgages.

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  1. billcblack says:

    As one of Washingtons few Certified Distressed Property Experts, Washington State Licensed Loan Officer, Washington State Licenesed Real Estate Broker Educator and Independent Business Consultant for law firms and local Real Estate offices- I give this program one of the highest recommendations for anyone in need and fully endorse this program. There is not a Federal program that touches this and I commend our state reps to make this happen- federal programs do not have accountability to the big banks.

    With this program a bank/servicer is held accountable…yes you heard me right! The Department of Commerce expects accountability from the servicer and the mediator expects the homeowner to come with their financials BUT they also require the servicer to have a competent decision making person attend the meeting that is “authorized” to make a decision..do they even exist?

    The MOST important factor is the timelines- do not bury your head in the sand until it’s too late. One thing that I learned is that typical distressed homeowner is buried in junk mail and crooks trying to take advantage of the situation …(side note-always keep it local) the letter before the notice of default must be in Spanish and English- so when you see this…. you must respond! Your local housing resource center can assist or a local law firm that understands how the system works. Even if you will be doing a short sale mediation can even the playing field.

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