To create the foreclosure fairness act, which is intended to protects and assists homeowners in foreclosure procedures. The bill addresses foreclosure mediation programs, which have proven to be the best practice in preventing foreclosures and allowing the parties to agree upon a modification that is sustainable for the homeowner and nets the lender greater value than the lender can expect from proceeding with foreclosure. (Companion: SB 5275).   Official Text and Analysis.

Amends the "meet and confer" requirement to, among other things, repeal the expiration date, make it applicable to all deeds of trust for owner-occupied residential real property, and expand the time period in which the borrower can meet with the beneficiary. The substitute stablishes foreclosure mediation for borrowers referred to mediation by housing counselors or attorneys. The substitute requires certain beneficiaries to remit to the Department of Commerce quarterly payments based on the number of owner-occupied residential real properties that have been issued notices of default. The substitute makes certain actions Consumer Protection Act violations.

Modifies how funds paid into the Foreclosure Fairness Account will be allocated for implementation of the bill. The Department of Commerce (COM) is now allowed to receive up to 9 percent or $451,000 per biennium, whichever is greater. The Office of the Attorney General (AGO) is now allowed to receive up to 6 percent or $655,000, whichever is greater. The amount for housing counselors is now allowed to be less than 80 percent if necessary to meet the specified funding level for the COM and the AGO. The second substitute bill adds failure to exercise due diligence required by the meet and confer process as a violation of the Consumer Protection Act. It requires housing counselors to provide certain information to the COM. Language identifying which entities are exempted from the mediation provisions and the provisions to remit payments to the COM is clarified. The second substitute bill clarifies that the COM will develop model language for specific documents required by the bill and makes some changes to what will be required in those documents. The second substitute bill makes other technical corrections.

To amend the "meet and confer" requirement to, among other things, repeal the expiration date, make it applicable to all deeds of trust for owner-occupied residential real property, and expand the time period in which the borrower can meet with the beneficiary. Establishes foreclosure mediation for borrowers referred to mediation by housing counselors or attorneys.

To require the department to include additional information in its annual report regarding the mediation program. Community association beneficiaries are not subject to the mediation requirements or the $250 Notice of Default fee under this act. Financial institutions who are not subject to the mediation requirements are to report their exemption to the department by January 31 (vs. January 10) annually. Housing counselors are to be approved by HUD or the Washington State Housing Finance Commission.

Amends the "meet and confer" requirement to, among other things, repeal the expiration date, make it applicable to all deeds of trust for owner-occupied residential real property, and expand the time period in which the borrower can meet with the beneficiary. Establishes foreclosure mediation for borrowers referred to mediation by housing counselors or attorneys. Require the department to include additional information in its annual report regarding the mediation program. Community association beneficiaries are not subject to the mediation requirements or the $250 Notice of Default fee under this act. Financial institutions who are not subject to the mediation requirements are to report their exemption to the department by January 31 (vs. January 10) annually. Housing counselors are to be approved by HUD or the Washington State Housing Finance Commission.

Amends the "meet and confer" requirement to, among other things, repeal the expiration date, make it applicable to all deeds of trust for owner-occupied residential real property, and expand the time period in which the borrower can meet with the beneficiary. Establishes foreclosure mediation for borrowers referred to mediation by housing counselors or attorneys. Require the department to include additional information in its annual report regarding the mediation program. Community association beneficiaries are not subject to the mediation requirements or the $250 Notice of Default fee under this act. Financial institutions who are not subject to the mediation requirements are to report their exemption to the department by January 31 (vs. January 10) annually. Housing counselors are to be approved by HUD or the Washington State Housing Finance Commission.