The state of Washington has implemented a foreclosure mediation program for homeowners that are struggling. The program will be officially known as the Foreclosure Fairness Act of 2011, and is the result of House Bill 1362. While more details of how it works are noted below, in general what mediation will do is ensure that lenders and banks notify borrowers prior to foreclosure that mediation is one solution that can be pursued. This is made available during the process in order to help find a solution.
Foreclosure counseling and mediation is currently offered in several states and even local counties across the United States. Washington is a little newer in the process. The mediation services and programs will in effect help homeowners across the state both understand all of their options to stopping the foreclosure and getting help. In addition to that, the result of the mediation session(s) can ensure people are able to determine the best course of action to take during the process.
Mortgage servicers and lenders will now be required to provide a notice with detailed information to the borrower of how much money is needed, including fees, to get back on track with their payments and to reinstate the deed of trust before recording the notice of foreclosure sale. In addition, and very importantly, the lender will also be required to give the borrower notice of his or her option to pursue the mediation process by using a neutral third party.
The Washington Foreclosure Fairness Act of 2011 will be providing homeowners with a process for foreclosure mediation when a housing counselor or attorney determines that mediation is appropriate action to take in an effort to find a solution. According to the law that is now in place across the state, parties that are involved in the process can attend the meeting either in person, telephone, through an agent or some other method.
The new mediation process/program will in effect give indebted and struggling homeowners more time, more free foreclosure prevention counseling and access to extensive third-party mediation with their lenders or banks before they lose their homes. Many third party HUD approved counselors will be aware of the process and of this new options, and they can support and guide state residents through it. Find a listing of Washington HUD counseling agencies.
Going forward, homeowners in Washington who fall behind on making their mortgage payments will have 30 days from the time that they get an initial letter from their bank or lender trying to foreclose on their home to respond and ask for a period of time called mediation. They need to formally request this mediation session, and when they do this they will receive 60 days to talk directly with their mortgage servicer or lender before a formal foreclosure can occur. This mediation session will involve a neutral third party representative.
After the letter is received, at any time, a homeowner can contact a housing counselor for free advice or counseling. The non-profit agencies can also help arrange for the mediation to occur. Or the homeowner can decide to contact an attorney for the same mediation process.
Once the process has started, borrowers across Washington will then be able to have in-person or phone negotiations and mediation sessions with their banks or lenders. Always involved in the process will be a third-party mediator who will make sure both the homeowner and the lender act in good faith. This mean many things, including being prepared and open to find a solution. It also means the lender and the homeowner both need to ensure they bring the right documents and attend when they’re supposed to.
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