"NEW SECTION.  Sec. 1   A new section is added to chapter 64.04 RCW to read as follows:
     (1) If the beneficiary or mortgagee, and its assignees, of debt secured by owner-occupied real property releases its deed of trust or mortgage in the real property for less than full payment of the secured debt and if the beneficiary or mortgagee, and its assignees, reserves the right to pursue collection of the remaining debt, the beneficiary or mortgagee, and its assignees, shall provide written notice to the debtor the first time that the beneficiary or mortgagee, and its assignees, provides notice to the debtor that the beneficiary or mortgagee, and its assignees, intends to release its security in the real property for less than full payment. The written notice to the debtor must be substantially in the following form:

     "To: [Name of debtor]          DATE:

     Please take note that [name of beneficiary or mortgagee, and its assignees], in releasing its security interest in this owner-occupied real property, reserves the right to collect that amount that constitutes less than full payment of the secured debt. The amount of debt outstanding as of the date of this letter is $. . . . . .. However, nothing in this letter precludes the debtor from negotiating with the [name of beneficiary or mortgagee, and its assignees] for a full release of this outstanding debt.
     If [name of beneficiary or mortgagee, and its assignees] does not initiate a court action to collect the outstanding debt within three years on the date which it released its security interest, the right to collect the outstanding debt is forfeited."

     (2)(a) If the beneficiary or mortgagee, and its assignees, of debt secured by owner-occupied real property reserves the right to pursue collection of the outstanding debt, in accordance with subsection (1) of this section, it must initiate a court action to collect the remaining debt within three years from the date on which it released its deed of trust or mortgage in the owner-occupied real property or else it forfeits any right to collect the remaining debt.
     (b) If the beneficiary or mortgagee, and its assignees, of debt secured by owner-occupied real property fails to provide the notice in accordance with subsection (1) of this section, the beneficiary or mortgagee, and its assignees, of debt secured by owner-occupied real property must initiate a court action to collect the remaining debt within three years of the date on which it released its security interest in the real property for less than full payment or else it forfeits any right to collect the remaining debt.
     (3) This section applies only to debts incurred by individuals primarily for personal, family, or household purposes. This section does not apply to debts for business, commercial, or agricultural purposes.
     (4) For the purposes of this section, "owner-occupied real property" means real property consisting solely of a single-family residence, a residential condominium unit, or a residential cooperative unit that is the principle residence of the debtor."