Warning: "continue" targeting switch is equivalent to "break". Did you mean to use "continue 2"? in /nfs/c05/h01/mnt/76410/domains/wahomeowners.com/html/wp-content/plugins/jetpack/jetpack.php on line 705
Avoiding Foreclosure · WAHomeowners.com

Warning: Illegal string offset 'output_key' in /nfs/c05/h01/mnt/76410/domains/wahomeowners.com/html/wp-includes/nav-menu.php on line 604

Warning: Illegal string offset 'output_key' in /nfs/c05/h01/mnt/76410/domains/wahomeowners.com/html/wp-includes/nav-menu.php on line 604

Warning: Illegal string offset 'output_key' in /nfs/c05/h01/mnt/76410/domains/wahomeowners.com/html/wp-includes/nav-menu.php on line 604

Warning: Illegal string offset 'output_key' in /nfs/c05/h01/mnt/76410/domains/wahomeowners.com/html/wp-includes/nav-menu.php on line 604

Warning: Illegal string offset 'output_key' in /nfs/c05/h01/mnt/76410/domains/wahomeowners.com/html/wp-includes/nav-menu.php on line 604

Warning: Illegal string offset 'output_key' in /nfs/c05/h01/mnt/76410/domains/wahomeowners.com/html/wp-includes/nav-menu.php on line 604

Warning: Illegal string offset 'output_key' in /nfs/c05/h01/mnt/76410/domains/wahomeowners.com/html/wp-includes/nav-menu.php on line 604

Warning: Illegal string offset 'output_key' in /nfs/c05/h01/mnt/76410/domains/wahomeowners.com/html/wp-includes/nav-menu.php on line 604

Warning: Illegal string offset 'output_key' in /nfs/c05/h01/mnt/76410/domains/wahomeowners.com/html/wp-includes/nav-menu.php on line 604

Warning: Illegal string offset 'output_key' in /nfs/c05/h01/mnt/76410/domains/wahomeowners.com/html/wp-includes/nav-menu.php on line 604

Warning: Illegal string offset 'output_key' in /nfs/c05/h01/mnt/76410/domains/wahomeowners.com/html/wp-includes/nav-menu.php on line 604

Warning: Illegal string offset 'output_key' in /nfs/c05/h01/mnt/76410/domains/wahomeowners.com/html/wp-includes/nav-menu.php on line 604

Avoiding Foreclosure


Foreclosure Fairness Law

There’s a new law in Town… to help you stay in your home.

Under a new Foreclosure Fairness Law beginning July 22, 2011, if you are in trouble with your mortgage on the home you occupy and you are facing a possible foreclosure, you may have the right to meet with your lender and even demand mediation to attempt a modification of your loan terms. Here is what you can expect:

  1. If the foreclosure of your home started after July 22, you will receive a letter from your bank/lender. Before certain banks* can foreclosure on your property, they will send you a letter inviting you to talk with them to discuss possible solutions. If you don’t get back with them, they must also try to reach you by phone.
  2. The bank letter or phone call will advise you to call a housing counselor or attorney. You should consult your lawyer. If you do not have a lawyer or prefer to a consult a housing counselor, you may do so at no cost. You can reach a housing counselor by calling: 1-800-894-HOME (4663) If you choose not to consult a housing counselor or lawyer, you can still meet with your lender, but you cannot demand mediation. Whatever you choose, you must act quickly after you receive the letter and/or phone call from your lender. Your time to demand a meeting or mediation is very short.
  3. A housing counselor or attorney can demand mediation.* Mediation forces your lender to discuss your options for staying in the home. You may bring your lawyer or housing counselor to the mediation. A third-party, the mediator, insures a fair discussion. You will have to share a $400 mediation fee with your bank/lender.
  4. If a foreclosure of your property has already begun by July 22, 2011, you will not receive a letter or phone call from your bank or lender. However, you may still have a right to demand a meeting with your lender and if you contact a housing counselor or lawyer, they may still be able to demand mediation. Time is short to make the necessary demands so you should contact your lawyer or housing counselor immediately if you have already received foreclosure paperwork from your lawyer.

*This only applies to banks or lenders that have filed at least 250 notices of default in the prior year. A list of those banks/lenders that are exempt from the law is available on the Department of Commerce website.

Find out more at the Department of Commerce website.

The new WA State Foreclosure Fairness Act gives new rights to distressed homeowners. Attorney Annie Fitzsimmons walks you through the new law with guests in the following video.

Rob McKenna, WA State Attorney General

Marc Cote, Certified HUD Housing Counselor

Rob Dickson, Lawyer and Short Sale Negotiator



Foreclosure Resources

There are dozens of agencies and governmental programs available to assist the hundreds of thousands of Americans facing a home foreclosure. You will find information about counseling, grants, refinancing, and short sales.


What To Do

Your first step is to call your lender. If you are having difficulty paying your mortgage on time, it’s important to act now before things get so bad that you are facing foreclosure. Your biggest ally if you encounter difficulty paying your mortgage on time is often your lender. Call them as soon as you know you are having problems.

Your lender – also known as a servicer — has a number of options to help you stay in or sell your home. These options include forbearance, repayment plans and loan modifications.

Please use the self-assessment tools provided on MakingHomeAffordable.gov to see if you are among the 7 to 9 million homeowners who may be able to benefit from Making Home Affordable.

There is also the REO Rental Initiative, a temporary rental initiative under which qualified, former owner-occupants and tenants will be offered an option to lease properties in which they reside that have been acquired by Freddie Mac as a result of foreclosure. Check to see if you qualify.

While refinancing is not necessarily a good option when facing foreclosure and can sometimes even be a predatory practice, there are instances where it may help. Talk to your lender to see if refinancing is an option for you.


Talking To Your Lender

Your Mortgage Lender: Your mortgage servicer may have options to help you avoid foreclosure. Look for the telephone number of your mortgage servicer on your mortgage statement or coupon book and call right away.

When you call your lender, be sure to have your account information handy and be ready to give a summary of the financial problems you are having. You should also have recent income statements and your household budget with you.

Be prepared for more than one conversation. Your lender may require that you complete a “loan work-out” package — you may not be eligible for help without it, so complete it as soon as you receive it.

Questions to ask:

  • How much time is the lender willing to give you to complete a work-out?
  • What are your obligations under the work-out package?
  • What are the specifics? Be sure to ask what is due and when.
  • Will a foreclosure sale of your property be put on hold while your lender looks at the possibility of a work-out package?

Visit the Mortgage Bankers Association’s Foreclosure Prevention Resource Center for advice on calling your lender for assistance.

Be ready to provide a short explanation of why you are unable to make your mortgage payment.  Did someone lose a job? Is there a medical emergency? Are you current on your loan but have not been able to refinance into better terms?

You’ll also need to provide your service provider with important information about your property, income, and debt obligations.

Being prepared for this conversation will help your service provider understand your case and see if you qualify for a loan modification or other mortgage workout.

If you need assistance and cannot reach your service provider, you can contact one of the local HUD approved counseling agencies in your area


Housing Counselors

Call the Homeownership Preservation Foundation’s Homeowner’s HOPETM Hotline at 1-888-995-HOPE to reach trained housing counselors who can provide advice and help you develop a plan.

Call the U.S. Department of Housing & Urban Development (HUD) at 1 (800) 569-4287 or visit the website for a list of approved housing counselors in Washington.


Reputable Credit Counseling

Do your research; a disreputable counselor can actually do more harm than good.

Call 888-995-HOPE to get help. If you are researching agencies on your own, consider the following:

  • Most HUD-approved housing counseling services are free, so if an agency charges a fee, look very carefully at what type of services you are being charged for.
  • Is it accredited by a recognized accreditation organization?
  • How long has it been in business?
  • Does it have audited financial statements?
  • Does it have community presence? In other words, does it have branches that are open to the public?
  • Does it have the required licenses to do business in the state where you live?
  • Have complaints been filed with the Better Business Bureau in the community where it is located?
  • Does it provide a written “Action Plan” after each counseling session?

You can find a credit counseling agency in your local phone book or by contacting the U.S. Department of Housing and Urban Development (HUD) at (800) 569-4287 on weekdays between 9:00 a.m. and 5:00 p.m. Eastern time. You can find a list of HUD-approved agencies in Washington here.


Special Circumstances

Natural Disasters

If your property has been damaged or destroyed by a tropical storm, hurricane, tornado, flood, or other disaster, talk to your lender immediately. They often have special disaster relief options to help you.

Service Members

If you are a service member on or recently released from active duty, talk to your lender about special financial relief options through the Service Members Civil Relief Act (SCRA).


The Department of Veterans Affairs has produced a streaming video to provide information to vets facing foreclosure.


Foreclosure Terms

Your lender may agree to let you pay the total amount you are behind, in a lump sum payment and by a specific date. This is often combined with forbearance when you can show that funds from a bonus, tax refund, or other source will become available at a specific time in the future. Be aware that there may be late fees and other costs associated with a reinstatement plan.
Your lender may offer a temporary reduction or suspension of your mortgage payments while you get back on your feet. Forbearance is often combined with a reinstatement or a repayment plan to pay off the missed or reduced mortgage payments.
Repayment Plan:
This is an agreement that gives you a fixed amount of time to repay the amount you are behind by combining a portion of what is past due with your regular monthly payment. At the end of the repayment period you have gradually paid back the amount of your mortgage that was delinquent.
Loan modification:
This is a written agreement between you and your mortgage company that permanently changes one or more of the original terms of your note to make the payments more affordable.
Short Payoff:
If you can sell your house but the sale proceeds are less than the total amount you owe on your mortgage, your mortgage company may agree to a short payoff and write off the portion of your mortgage that exceeds the net proceeds from the sale.
Deed-in-lieu of foreclosure:
A Deed-in-lieu of foreclosure is a cancellation of your mortgage if you voluntarily transfer title of your property to your mortgage company. Usually you must try to sell your home for its fair market value for at least 90 days before a mortgage company will consider this option. A deed-in-lieu of foreclosure may not be an option if there are other liens on the property, such as second mortgages, judgments from creditors, or tax liens.
An assumption permits a qualified buyer to take over your mortgage debt and make the mortgage payments, even if the mortgage is non-assumable. As a result, you may be able to sell your property and avoid foreclosure.