SENATE BILL REPORT
2SHB 2623
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent. |
As of February 22, 2010
Title: An act relating to the foreclosure of residential real property.
Brief Description: Reviewing the foreclosure of residential real property.
Sponsors: House Committee on General Government Appropriations (originally sponsored by Representatives Orwall, Miloscia, Darneille, Kirby, Sullivan, Pettigrew, Simpson, Rolfes and Hasegawa).
Brief History: Passed House: 2/12/10, 97-0.
Committee Activity: Financial Institutions, Housing & Insurance: 2/23/10.
SENATE COMMITTEE ON FINANCIAL INSTITUTIONS, HOUSING & INSURANCE |
Staff: Alison Mendiola (786-7483)
Background: Deeds of trust, which are essentially a type of mortgage, may be foreclosed nonjudicially if the borrower defaults on the loan obligation. A notice of default must be provided to the borrower at least 30 days before the Notice of Sale is recorded in the county auditor’s office. A borrower must receive notice of the foreclosure sale 90 days before the date of the sale. The foreclosure sale may not take place less than 190 days from the date of default.
Last year, the Legislature enacted ESB 5810, which added a requirement for deeds of trust made from January 1, 2003, to December 31, 2007, on owner-occupied residential property. A beneficiary cannot issue a notice of default until 30 days after the beneficiary contacts the borrower to explore options for the borrower to avoid foreclosure. During this initial contact, the beneficiary must, among other things, give the borrower contact information for a U.S. Department of Housing and Urban Development (HUD)-certified counseling agency and other places that might be able to assist the borrower. This initial contact requirement expires on December 31, 2012.
Summary of Bill: Washington State Housing Finance Commission (Commission) must conduct a review of the effectiveness of the meet and confer requirement and examine whether it has resulted in an increase in the number of loan modifications and whether additional statutory provisions, such as mandatory mediation, are necessary to produce effective communication between lenders and borrowers.
The Commission must report its findings and recommendations to the Legislature by November 30, 2010.
Appropriation: None.
Fiscal Note: Available.
Committee/Commission/Task Force Created: No.
Effective Date: Ninety days after adjournment of session in which bill is passed.