Recently I attended a CLE which addressed the changes to the Foreclosure Fairness Act to take place in June 2012.
One of the trends that housing advocates see is the unfortunate realization that delinquencies will continue to increase. As a result, there will be more mediations between homeowners and lenders.
In addition, there will be an increase in short sales, loan modifications and deed in lieu of foreclosure. Also, there will be an increase in litigation resulting out of trustee misconduct and loan modification scams.
Washington is the third non-judicial foreclosure state with a Foreclosure Fairness Act. The state patterns its FFA after Nevada.
Housing advocates are seeing rate reduction and even reductions in principals at mediation. The most active areas of foreclosure are in Everett and Pierce County.
The following are changes that will occur this June 2012 to the Foreclosure Fairness Act:
– Lawyers and Judges are immune from civil liability when acting as mediators with the exception of “willful and wanton misconduct.”
– The housing counselor and lawyer can request mediation from Notice of Pre-Foreclosure Options (NOPFO) to Notice of Trustee Sale. Currently, NOPFO is only form that notifies of “right to mediation”.
– No mediation after June 8th, from letter regarding Notice of Pre-Foreclosure Options to Notice of Default. But, mediation is ok 20 days after Notice of Trustee Sale is recorded.
– Mediation 120 days b/w Notice of Trustee Sale and Foreclosure Sale ONLY for those entitled to get NOPFO.
– 23 days after the Department of Commerce (DOC) letter advising of mediation the Homeowner must provide documents including HAMP application to give to beneficiary (lender) and mediator. 20 days after that, the Lender/Financial servicer must give docs to mediator. At that point, there is 70 days from DOC letter to mediation.
For more information on Foreclosure Mediation click here.