Last Thursday Gov. Chris Gregoire signed into law a new bill giving homeowners the statutory right to sit down with their lenders and discuss modifying their loan.
In an effort to protect WA homeowners from foreclosure, under the new WA Foreclosure Fairness Act, lenders must now send to homeowners in default a letter explaining their right to a sit-down to discuss alternatives to foreclosure. If that letter goes unanswered, the bank must make three attempts by phone, and then send a certified letter before proceeding with the foreclosure process.
Lenders must conduct ï¿½a good faith reviewï¿½ of the homeownerï¿½s financial situation and offer loan modifications, if possible. The new law allows a mediator to handle a negotiated agreement between the lender and homeowner.
The problem, as I see it, is that many homeowners will simply ignore these communications. After all, homeowners behind on their payments are already overwhelmed with harassing collection calls and letters and may simply view these as just another collection attempt by their lender and not their statutory right to mediate.
Some parts of the law are effective immediately and the entire House Bill 1362, aka the Foreclosure Fairness Act can be found here.
Click here to find out more about the Second Substitute House Bill 1362