Washington State Legislation Would Put a One Year Hold on
Foreclosures for Borrowers Receiving Unemployment

The legislative session in Washington State began on Monday, January 11th, and a bill introduced on the first day of the session, HB 2623, by Rep. Orwall, would put a one year hold on any foreclosure of a residential property where the borrower is receiving unemployment compensation. This is a permanent change. In addition, the qualifier placed in last year’s legislation restricting its application to deeds of trust made from 2003 through 2007 would be stricken, making that section (now RCW 61.24.031) apply to foreclosures.

In summary, the legislation would:

1. Prohibit foreclosures on owner-occupied homes for one year following commencement
   of a borrower's unemployment benefits.
   
   
2. Amend SB 5810 to delete the four-year time window of applicability (deleting application to owner-occupied loans commenced between January 1, 2003 and December 31, 2007) so that it applies to all owner occupied loans regardless of whether the loans were made during the "toxic" refi boom.
   
   
3. Add a revenue generating $25 fee to the recording of notices of trustee's sale. The money goes to the DFI "to be used under RCW 43.320.150 for homeownership prepurchase outreach and education and postpurchase counseling and support".
   
   
4. Repeal the December 31, 2012 sunset date for the pre-foreclosure referral notice requirements.

A hearing is expected in the House Judiciary Committee this month.

UTA will oppose this legislation.