consumer protection « Washington Policy Watch

July 22, 2011 • 8:44 am 1

A win for homeowners despite difficult year for Washington families, economy

It’s no secret this year was a difficult one for Washington. Persistent unemployment, the continuing budget gap, skyrocketing tuition, high gas prices, plummeting home values and cuts to essential services – at a time when they’re needed most – have damaged our state economy and left middle class families struggling to stay in their homes.

But in spite of all this bad news, this year’s bright spot came when the state legislature passed a positive bill for Washington families: the Foreclosure Fairness Bill. The bill provides funding for mortgage counselors, who will advise homeowners struggling to make payments, and requires banks to be involved in a mediation process – a system designed to prevent cases like this one.

And with the Foreclosure Fairness Act set to take effect this month, analysts expect more homeowners will be able to work out a plan to afford payments, have lower monthly payments and, most importantly, more will be able to stay in their homes. From the Washington News Service:

These types of recourse have always been available, says Jordan Foster, a consumer law attorney with the Tacoma firm Smith Alling – it’s just that panicked homeowners often get the run-around from lenders and do not know how to proceed.

“A lot of people are so unfamiliar with the process that they don’t realize there are a lot of options out there for them. A lot of people end up either just walking away or moving out, without even contacting the bank and seeing what options they might have.”

Making sure people know their rights and options as homeowners is simply a matter of respect and responsibility – and now it is law in Washington State.

Filed under: consumer protection, state economy, Foreclosure, home ownership, middle class, mortgage reform

April 13, 2011 • 7:04 am 1

In difficult year WA legislature passes bills to protect homeowners, encourage savings

Gary Burris, Senior Policy Associate

By Gary Burris, Senior Policy Associate

With the current state budget shortfall, federal budget deficits and looming cuts in vital services, it’s easy to miss a few of the good things that are happening in our state legislature. Specifically, several bills currently on their way to the Governor’s desk will increase consumer protection for homeowners and promote personal savings.

The first bill, which we’ve written about before, is the Foreclosure Fairness Bill (HB 1362), sponsored by Representative Orwall. The legislature has seen the wisdom in this important homeowner protection bill, which was passed by the state House and Senate in early April. The bill is set to provide more funding for housing counselors, who will advise homeowners struggling to make their mortgage payments.

The counselors are funded by banks or other mortgage-holders, with a fee added to each foreclosure that is filed. The housing counselors will help homeowners asses their finances and determine whether a modification to their mortgage is feasible. It also provides for a mandatory mediation process after the borrower is referred to mediation by a housing counselor. Through mediation, the borrower and mortgage holder sit down, face to face, with a neutral and trained third party to discuss a mortgage modification.

By working with a housing counselor prior to the mediation, it is expected that most homeowners entering into mediation will be able to work out a plan to afford payments under a modified mortgage. Homeowners will have lower monthly payments and, most importantly, will be able to stay in their homes.

The second piece of consumer protection legislation is SB 5115, which will ban the practice of private transfer fees on home sales. Banks began a practice of adding a 1% fee to the contract of home sales that was to be assessed each time the home was sold. The fee would then be given to the bank that originated this first loan. Read the rest of this entry »

Filed under: consumer protection, state economy, Foreclosure, home ownership, homeowner, mortgage

March 9, 2011 • 10:56 am 2

Foreclosure fairness bill would require bank mediation, keep more people in their homes

Rep. Tina Orwall

By Gary Burris, Senior Policy Associate

The mortgage crisis has hit millions of Americans. Most recent estimates show that 23% of home owners nationwide owe more than their homes are worth – including tens of thousands of Washingtonians.

Banks used unethical tactics to get people into loans that weren’t in their best interest, inflated the prices of homes by flooding the market with money that was easy to obtain, and then sold securities based on those overvalued homes. All of which, in combination, brought the US economy to its knees. We also know the banks got bailed out because they were “too big to fail.” And since the bailout, the banks have tightened up lending, further damaging the economy, while looking for new ways to increase fees on customers to pad their bottom line.

The big banks have been no friend to consumers. So it should be no surprise that homeowners have experienced incredible frustration in trying to refinance mortgages. Many homeowners simply want to adjust their payments so they can stay in their home, without being forced into foreclosure. Read the rest of this entry »

Filed under: consumer protection, Foreclosure, mortgage, mortgage reform

January 20, 2011 • 12:33 pm 0

New legislation seeks to improve consumer finance protections for homeowners

Over 30,000 Washington homeowners lost their homes in 2009, 37,000 in 2010, and the Associated Press reports that 2011 is projected to be even worse, with 41,100 home foreclosures forecast.

Many people could keep their homes if they could get their lender to work with them to come up with a modified loan. Doing so would not only help keep home values up – it would also reduce social costs, and protect the economy as it recovers from recession. Unfortunately, very few banks and mortgage holders have systems in place to work with homeowners in that manner.

Recognizing that borrowers deserve a chance to work out a solution that benefits both parties before losing their home, state Representative Tina Orwall and Senator Adam Kline have recently introduced legislation requiring mortgage lenders to participate in mediation at the request of the homeowner. That process is designed to determine whether the mortgage can be modified so payments are more affordable to the homeowner. The bill is similar to recent successful legislation in Nevada.

There’s more. Read the rest of this entry »

Filed under: consumer protection, state economy, borrower, economic security, Foreclosure, homeowner, mortgage, Mortgage loan, real estate

Washington Policy Watch

A win for homeowners despite difficult year for Washington families, economy

In difficult year WA legislature passes bills to protect homeowners, encourage savings

Foreclosure fairness bill would require bank mediation, keep more people in their homes

New legislation seeks to improve consumer finance protections for homeowners

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