Back in 2011, as families hit by the recession were struggling to make their mortgage payments and hundreds of homes were being foreclosed in every part of the state, the Legislature passed a bipartisan measure, sponsored by Rep. Tina Orwall, aimed at alleviating some of the pain. Aptly named the Foreclosure Fairness Act, this new law made Washington the third non-judicial foreclosure process state to establish a program to help homeowners find a resolution to foreclosure proceedings with their lenders.
The Foreclosure Fairness Program, managed by the Department of Commerce, provides homeowners foreclosure assistance by offering free housing counseling, civil legal aid, education and outreach, and the opportunity for mediation. By improving communication between lenders and homeowners, the program helps both parties reach a resolution.
The law has been in effect for two and a half years. How well it is working so far? Has it really helped Washington homeowners? Here are the outcomes as of today:
It’s important to note that “Borrower stayed in home” is not the only positive outcome. The intent of the Foreclosure Mediation Program is to ensure that, even when foreclosure cannot be avoided, the process is fair and transparent, and gives both the homeowner and the lender the opportunity to meet and make well-informed decisions. Mediation gives homeowners the chance to understand their options and requires lenders to explain why some options may not be available, so even when the borrower doesn’t stay in the home, if the parties reach some other agreement (e.g., a short-sale) it’s still a positive outcome.