What’s up with the legislators supporting banks instead of homeowners?

Several weeks ago the bill SB 6648 was turned down by the Washington State House. This bill would have given homeowners a second chance to avoid foreclosure. Lenders would have been required to participate in a mediation to evaluate if there is an affordable and sustainable means to keeping the home, as opposed to selling the home at an auction sale. Reasonable criteria would have been established and lenders would have been required to implement modifications under the current FDIC programs. Moreover, banks would have been mandated to create a fair and open process that would have benefited both, the lenders and homeowners.

Bank balancing on the rotunda of the Capitol in OlympiaIn other words, homeowners currently in foreclosure and heading into foreclosure sale would have been given a second chance to keep their homes. The lenders, on the other hand, would have been able to get an expedited process to help mitigate their losses in addition to mitigating expenses related to foreclosure which can amount up to $70,000 in fees per foreclosure sale. Banks end up buying these properties and selling them at a discounted price, which translates into more losses for the investor and a trickle down effect on the value of properties around neighborhoods. Continue reading

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