BILL REQ. #:  S-1753.1 

Read first time 02/16/09.   Referred to Committee on Financial Institutions, Housing & Insurance.

     AN ACT Relating to creating the prevent or reduce owner-occupied foreclosure program; and amending RCW 43.320.160, 43.320.165, and 43.320.170.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 43.320.160 and 2008 c 322 s 1 are each amended to read as follows:
     (1) The ((smart homeownership choices)) prevent or reduce owner-occupied foreclosure program is created in the department to assist ((low-income and moderate-income households, as defined in RCW 84.14.010,)) borrowers facing foreclosure in achieving work-outs. The borrowers are households, families, and individuals with incomes up to and including the county median income level.
     (2) The department shall enter into an interagency agreement with the Washington state housing finance commission to implement and administer this program with moneys from the account created in RCW 43.320.165. The Washington state housing finance commission will request funds from the department as needed to implement and operate the program.
     (3) The commission shall, under terms and conditions to be determined by the commission, in consultation with the department, assist homeowners who are ((delinquent on their mortgage payments to bring their mortgage payments current in order to refinance into a different loan product)) facing foreclosure in achieving work-outs. ((Financial assistance received by homeowners under this chapter shall be repaid at the time of refinancing into a different loan product. Homeowners receiving financial assistance shall also agree to partake in a residential mortgage counseling program.)) Moneys may also be used for outreach activities to raise awareness of this program; creating and maintaining a pool of volunteers from the professions of attorneys, certified public accountants, banking professionals, and other relevant professions who participate in the program as needed and without compensation to provide advice to the homeowner during discussions having as their objective, achieving a work-out; qualifying the volunteers as third parties from whom declarations may be obtained, regarding requirements of chapter 61.24 RCW, deeds of trust; and administering assignments of volunteers to borrowers in the most productive manner. Not more than four percent of the total appropriation for this program may be used for administrative expenses of the department and the commission.
     (4) The commission must provide an annual report to the legislature at the end of each fiscal year of program operation. The report must include information ((including the total number of households seeking help to resolve mortgage delinquency, the number of program participants that successfully avoided foreclosure, and the number of program participants who refinanced a home, including information on the terms of both the new loan product and the product out of which the homeowner refinanced)) determined by the housing finance commission to be useful in assessing the success of the program. The commission shall establish and report upon performance measures, including measures to gauge program efficiency and effectiveness and customer satisfaction.
     (5) For the purposes of this section, "work-out" means an agreement made between the borrower and the mortgagee or beneficiary under a deed of trust, or with the authorized agent of the mortgagee or beneficiary, that results in the borrower's continued residence in the mortgaged residential property.

Sec. 2   RCW 43.320.165 and 2008 c 322 s 2 are each amended to read as follows:
     The ((smart homeownership choices)) prevent or reduce owner-occupied foreclosure program account is created in the custody of the state treasurer. All receipts from the appropriation in section 4, chapter 322, Laws of 2008 as well as receipts from private contributions and all other sources that are specifically designated for the ((smart homeownership choices)) prevent or reduce owner-occupied foreclosure program must be deposited into the account. Expenditures from the account may be used solely for the purpose of preventing or reducing owner-occupied foreclosures through the ((smart homeownership choices)) prevent or reduce owner-occupied foreclosure program as described in RCW 43.320.160. Only the director of the department or the director's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

Sec. 3   RCW 43.320.170 and 2008 c 322 s 3 are each amended to read as follows:
     The Washington state housing finance commission shall ((only)) serve ((low-income)) households, ((as defined in RCW 84.14.010,)) families, and individuals with incomes up to and including the county median income level through the ((smart homeownership choices)) prevent or reduce owner-occupied foreclosure program described in RCW 43.320.160 using state appropriated general funds in the ((smart homeownership choices)) prevent or reduce owner-occupied foreclosure program account created in RCW 43.320.165((.)) and contributions from private and other sources ((to the account may be used to serve both low-income and moderate-income households, as defined in RCW 84.14.010, through the smart homeownership choices program)).