State homeowners facing foreclosure to get help

Homeowners facing foreclosure will soon have access to housing counselors to assist them in the process when the Foreclosure Fairness Act of 2011 takes effect on July 22.

The act encourages homeowners to use the skills and professional judgment of housing counselors as early as possible in the foreclosure process. According to NWREporter, other key provisions of the new rules include:

1. Creating a framework for homeowners and beneficiaries to communicate with each other to reach a resolution and avoid foreclosure whenever possible;
2. Providing a process for foreclosure mediation when a housing counselor or attorney determines that mediation is appropriate;
3. Creating a foreclosure fairness account.

Washington currently holds the 11th highest foreclosure rate in the nation. Seventy-seven thousand families lost their homes to foreclosure over a period of two years. Nearly 4,400 new foreclosures were reported in February 2011, according to figures released by the bill’s supporters.

“Having the opportunity to sit down face-to-face with the bank will give struggling homeowners a real chance to work out the best possible outcome for their specific situation,” said Rep. Tina Orwall, D-Des Moines, who sponsored the bill.

The measure will make it possible for homeowners to salvage their homes whenever feasible and help reach a resolution faster than the current process, which can take up to 18 months, she explained.

Under the new law, banks will pay $250 into the foreclosure fairness account every time they issue a new Notice of Default. That money will be used to train housing counselors and pay mediators, according to a statement by House Democrats.

Homeowners will be notified that housing advisers are available to help them, and that they can request a meeting with the lender and a mediator to explore all options and reach an agreement regarding the future of their homes, proponents explained.