Holly Chisa

By Holly Chisa, HPC Advocacy, UTA Washington State Lobbyist

For many of us that work in Washington, I’m sure there was hope that we wouldn’t see the likes of the 2021 Washington legislative session again.  Major policy decisions were made without in-person access.  Only Zoom meetings with lawmakers to explain the complexity of foreclosure, landlord/tenant laws, and the federal and state actions prohibiting evictions.  This was in addition to significant tax and fee increases (including a $100 per document filing fee) which were policies implemented with limited to no input from Washington business owners or their representatives or associations.

But here we are, facing what could be another virtual session.  Lawmakers are trying to determine what will happen to homeowners and landlords once evictions and foreclosures begin again.  There is also a concern for families when the extension of unemployment benefits ends.   I regularly get calls from lawmakers asking about the potential wave of foreclosures and evictions.  They wonder if they should be “doing something” to prevent them but they also don’t know what steps to take to help homeowners, tenants, or landlords.  As we emerge from the state and federal orders, it’s unclear how a hot housing market and low vacancy rental market will impact foreclosures for both private and commercial housing.  In some ways, this is a benefit.  Lawmakers don’t know exactly how to move so they aren’t moving at all.  There are a lot of questions and calls, but no formal meetings among stakeholder groups to discuss policies.  Likely those will begin again in the Fall, but everyone seems to be waiting to see which shoes will drop before developing policy.

There are indications that there will be some reaction by the general public as forbearance ends.  In August, a reporter of a regional TV news network shared fears of homeowners receiving notices that mortgage payments were going to increase.  The story focused on a couple of larger lenders sending notices to borrowers of payments due twice or three times more than what they’d been paying previously.  It’s only near the end of the story that the reporter discusses deferrals, reinstatement of the loan, and negotiated payment plans as options for homeowners.  The article also does not mention the $50 million in federal stimulus dollars available to homeowners emerging from forbearance.   It is believed about 155,800 homeowners are behind payments as of March 2021, in Washington.  (Seattle Times March 15, 2021)

The Washington Department of Commerce (DOC) was allocated $173 million in federal dollars through the Washington Legislature for mortgage assistance, rental assistance, utility assistance, and other financial help.  Currently, Washington is working through its application process with the US Department of Treasury including submitting a spending plan as part of the American Rescue Plan Act Homeowner Assistance Fund (HAF).  DOC has received 10% of the allocated funding and submitted its plan to the US Treasury for the remaining dollars.  They’ll be using the first 10% (about $17 million) to expand the foreclosure hotline, hire mediators and housing counselors, expand civil aid, continue the mediation program of the FFA, and create a new Homeowner Mortgage Relief Program.  While the expanded program may support all homeowners requesting assistance with foreclosure, only those that qualify under HAF will receive future dollars.

As DOC moves forward with its plan for federal dollars into 2022, UTA will provide comments and input into their proposal.  Additionally, we’ll engage advocates and lawmakers as homeowners emerge from forbearance and alert lawmakers to any concerns or frustrations they may have with the foreclosure process.  Fortunately (or maybe, unfortunately) the Foreclosure Fairness Act remains in place and is now well funded.  It’s an effective tool for lawmakers to direct constituents to as foreclosures restart.

In the lull and uncertainty, we are taking the opportunity to work on the surplus funds legislation.  During the 2021 session, lawmakers passed the wage lien bill (SB 5355).  This legislation allows workers to file a lien against a property for unpaid wages, including personal property.  This will add to the existing confusion that already exists within the surplus funds process.  UTA has already approached the advocates to talk about the legislation and will begin negotiations in September.  Additionally, Washington Labor and Industries (L&I) intends to introduce legislation in 2022 to award workers for overdraft fees charged when a worker overdraws their checking account due to an unpaid or late paid paycheck.  While the bill isn’t finalized, it would add to the amount that could be placed as a lien against a property.

UTA will be coordinating meetings over the next several weeks with both allies and detractors to find agreement on the bill.  With the potential of another online session looming, it would be best to find common ground BEFORE the bill is introduced.

I’d like to say that we are reemerging into a new housing environment we haven’t seen yet in Washington.  But, honestly, nothing we’ve seen in the last 18 months is familiar.  UTA and its Washington members will continue to provide input to legislators and state agencies to enforce the real challenges trustees are facing in our state as you navigate whatever the latest “new” challenge is in the housing market.