The bill amends RCW 61.24.157 to establish a foreclosure prevention fee of $80 for each residential mortgage loan related to property in Washington, with certain exemptions. Specifically, reverse mortgage loans for individuals aged 60 and older, as well as chattel loans or retail installment contracts for purchasing dwellings secured as personal property, are exempt from this fee. Additionally, if a borrower is financing a purchase transaction through specific state-administered programs, the fee will only apply to the first lien residential mortgage loan. The bill also mandates that the foreclosure prevention fee be disclosed in accordance with federal and state law, although it may be excluded from the finance charge calculation.

Furthermore, the bill requires that borrowers receive a notice regarding the foreclosure prevention fee and its purpose at or before the time it is assessed. The Department of Commerce is granted the authority to create policies and procedures for the fee's implementation and management. A new section is created to evaluate the feasibility of using a portion of the fee collections to establish a state homeowner assistance fund, which would provide financial assistance to homeowners who have exhausted options under the foreclosure fairness act. This evaluation must be submitted by July 1, 2027, and the section will expire on August 1, 2028.

Statutes affected:
Original bill: 61.24.157
Substitute bill: 61.24.157