Foreclosure Prevention

I’m sure, by now, you are all aware about the news regarding foreclosure increase causing the home prices to decrease on a daily basis. Washington State legislators responded to the foreclosure crisis by changing the way banks foreclose.

Washington State passed the Foreclosure Fairness Act, which went into effect on July 22, 2011. After the original effective date of July, 2011-a couple of slight revisions have and/or will be commenced effective March, 2012 and June, 2012. Since the law will allow borrowers more time and a better chance at seeking an all around work-out solution with lenders to avoid foreclosure. Particularly, the new law requires banks to physically sit down and talk to borrowers before foreclosing. Without this new law, lenders often neglect, and simply refuse to slow down the foreclosure process even if there was a possible way to avoid it. Keep in mind that foreclosure in Washington can occur within 6-7 months from a default (missed payment). Now, lenders will be required to slow down the process by a month or two and earnestly review alternative options.