New legislation seen as boost for those facing foreclosure
On March 28, Gov. Jay Inslee signed a comprehensive bill that arrived on his desk with unanimous approval from both the House and the Senate. HB 2057 – endorsed by SNAP and other fair housing entities – is expected to strengthen existing safeguards for low-income residents who are facing foreclosure as well as create new protections.
In a letter dated March 26, SNAP and other nonprofit providers of foreclosure prevention counseling, urged the governor to sign the bill in its entirety, referring to the funding created by the state’s Foreclosure Fairness Act (FFA) which HB 2057 amends. Funds from the FFA support the “education, counseling and mediation that are the key components of the state’s foreclosure prevention strategy,” the letter states.
Revenue from the FFA has decreased over the years, leading to a reduction in the number of foreclosure prevention counselors statewide. In July 2017, the number of counselors stood at 44. Today, it has decreased to 28. SNAP is currently the only nonprofit in Eastern Washington that offers foreclosure prevention counseling with mediation. In 2017, SNAP housing counselors saved 159 homes from foreclosure.
The new legislation includes an increase in the fee paid by financial institutions at the notice of Trustee Sale from $250 to $325. The bill will also create a new method to better track foreclosure filings to ensure accurate accounting of those fees.
“Each year, we haven’t really known what’s going to happen,” said SNAP Housing Counselor Program Manager Jennifer Hentges. “This bill is going to keep us from losing more counselors.”
That will mean more critical support for homeowners in crisis, says Denise Rodriguez, deputy director of the Washington Homeownership Resource Center.
“Having a counselor who knows the system is far better for homeowners than trying to negotiate on their own,” Rodriguez said. “These people are in a really tough position. It’s great when you can refer them to an agency like SNAP that works with them through the whole process.”
Provisions in the bill are expected to bring support for more SNAP clients like Tom and Jackie Milroy who never thought they would face the prospect of losing their home. Like many who experience the prospect of foreclosure, the Spokane couple never anticipated the health challenges, medical bills and job losses that would put their hard-earned home in jeopardy.
In May 2010, Jackie was hospitalized with an infection in her right foot. The condition, along with her diabetes, resulted in the amputation of her right leg, just below the knee. She had to stop working, which cut the family’s income by 60 percent.
In March of 2011, Tom was diagnosed with cancer. The U.S. Army veteran served in Vietnam and had heard stories of how he and other soldiers exposed to Agent Orange might incur a higher risk of certain types of cancer. After six surgeries, Tom ended up having his right ear amputated. During that time, he was forced to cut back on his schedule as a construction worker. In April of 2012, he received a layoff notice.
“We were making our monthly mortgage payments while my wife was not working but when I became ill, we found ourselves getting further behind,” Tom said. “With our normal monthly expenses, in addition to mounting medical bills, it made it difficult to meet our obligation. Needless to say, we were overwhelmed financially and emotionally.”
Jackie remembers running into roadblocks as she and Tom scrambled to save their home.
“We tried to talk to the mortgage company and they just wouldn’t even talk to us,” she said.
One day, Jackie heard on the news that the local HUD housing authority could help. The Milroys reached out to SNAP and were connected with a housing counselor who intervened on their behalf. While the odds seemed daunting, the mediation was successful and Tom and Jackie were able to breathe again. Their home was safe.
“We were able to halt any immediate actions until our economic situation stabilized,” Tom said. “We love our home and wish nothing more than to stay with it. Our home means everything to us. To leave it would be devastating.”
The approved bill will also mean new protections related to reverse mortgages, often used by seniors to convert equity in their home into cash. Lenders must now notify homeowners in writing about their rights and available resources for free assistance prior to filing a reverse mortgage foreclosure lawsuit.
The legislation also guarantees that lenders are only allowed to enter a property in foreclosure when that property is considered a nuisance or is abandoned. There will also be a stricter process for defining abandonment as well as for repairing and maintaining those properties and returning possession of the home if the owner reappears.
While the frequency of foreclosures in Washington has decreased since the days of the Great Recession, Rodriguez points out that the problem is still real for many homeowners.
“Foreclosure continues to happen,” she said. “It’s still a crisis for that family, that community. It’s not a non-issue. Whether it’s 500 foreclosures or 5,000, these people still deserve to have the protections provided by the Foreclosure Prevention Act.”