OLYMPIA – A consumer protection bill expanding the Foreclosure Fairness Act (FFA) passed the Senate Friday.
Senate Bill 5686, sponsored by Sen. Tina Orwall (D-Des Moines), expands the FFA to include homeowners facing foreclosure due to unpaid homeowner association (HOA) assessments. Currently, homeowners facing HOA-related foreclosure have no access to state-supported mediation, leaving them at increased risk of losing their homes over relatively small debts.
Nearly one-third of Washington homes are part of an HOA, and these homeowners pay an average of $4,500 annually in fees. When homeowners fall behind on these assessments, they can quickly face foreclosure with limited options to negotiate repayment. The bill would extend the resolution process under the FFA to HOA homeowners to help avoid foreclosure.
Since 2012, more than 78,000 homeowners in Washington have been able to remain in their homes through counseling and mediation under the FFA, according to the Washington Homeownership Resource Center.
“Losing a home is an emotionally and financially devastating experience,” Orwall said. “Mediation is a lifeline, and people deserve the chance to stay in their homes by reaching a resolution with their HOAs.”
To support these expanded services, the bill establishes an $80 foreclosure-prevention fee that would be collected on all residential mortgage loans originated except for reverse mortgage loans issued to people over 61 years old. The fee would generate about $7 million annually for the Foreclosure Fairness Account, which funds housing counseling services, the foreclosure prevention hotline, homeowner outreach and education, and administration of the FFA.
The bill now moves to the House for consideration. Follow the bill’s progress here.
