SEATTLE -- For many homeowners, mortgage modification and foreclosure can be confusing. Some compare the process to "speaking in Martian."
Fortunately, Washington State has the "Fair Foreclosure Act" which requires lenders to sit face-to-face with homeowners to discuss modifying mortgages to prevent foreclosure. The Act established the WHRC (Washington Homeownership Resource Center), which provides professionals who can help negotiate a modification to prevent foreclosure at no charge to the homeowner. The toll-free phone number for the Center is 1-877-894-4663.
On Thursday, the Feds announced a $25 billion settlement between 49 states (including Washington) and the nation's five biggest mortgage lenders. Nearly $650 Million of that will be headed to our state to help homeowners. You could qualify for benefits if:
-- your mortgage is with one of the five lenders (Bank of America, JP Morgan Chase, Wells Fargo, Ally Financial and CitiGroup)
-- you need a loan modification now
-- you owe more on your mortgage than your house is worth
-- you have already foreclosed on your home
Randy Lowell, a mortgage counselor with Parkview Services in Shoreline, says the settlement will help consumers. "They're going to have an opportunity to learn more and participate at a higher level than they've ever been given before," Lowell said. "Washington State's been very proactive with this Fair Foreclosure Act, now complemented with this settlement I think we're going to see more people save their homes."
"The settlement allows some homeowners who are not yet in default to make a modification request and potentially have some of their underwater mortgage forgiven, " Lowell said. "It also allows the homeowner who's already lost their home to make a claim and participate in the settlement agreement. Now that agreement, while it says it's about $2000 per homeowner, it still is a first-come, first-served basis and it's spread across all states participating. So it's really important that the homeowner act quickly to go in, find out and empower themselves."
Lowell also had some other tips:
-- open and read all letters from your lender as soon as you get them
-- save the envelopes as well as the letters. If the date on the envelope is significantly later than the one on the letter, it may reduce the homeowner's time to adequately respond. This could compel the lender to negotiate a better deal.
-- check the Washington State Attorney General's website to see what programs you qualify for. Are you current on your payments? Are you behind on them? If so, by how many days? Do you have an FHA loan? All these variables can affect your application.
Lowell says the most important thing mortgage counselors do is give people hope. "There's no doubt we save lives," he says. "Some people get so despondent over foreclosure, they want to give up. We help people see their options and move on."
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