Housing (Mortgages)

This bill clarifies that Washington's Housing Finance Commission cannot make mortgage loans for owner-occupied single-family homes, except for down payment assistance programs. It ensures the Commission focuses on financing multifamily and nonowner-occupied housing while preserving private lenders' role in residential mortgage markets. The bill updates eligibility standards to consider income, family size, housing conditions, and energy efficiency for housing assistance programs. It also requires annual audits to verify bond funds support affordable housing and energy-efficient improvements as intended.

This bill imposes an $80 fee on most residential mortgage loans in Washington at closing, paid by settlement agents and added to the loan if financed. It exempts reverse mortgages for borrowers aged 60 or older, chattel loans for dwellings, and certain homeownership programs (like those under chapter 43.185A RCW). Borrowers must receive a notice about the fee and the statewide foreclosure hotline number. The state must also study using a portion of the fee to create a homeowner assistance fund by July 2027, with the bill expiring August 1, 2028.

SB 5929 exempts assignments or substitutions of previously recorded deeds of trust from two fees: the $100 covenant homeownership program assessment and the $183 document recording surcharge. This change applies directly to mortgage lenders, title companies, and property owners involved in transferring existing mortgage interests. The bill amends RCW 36.22.185 (adding subsection (2)(f)) and RCW 36.22.250 (adding exemption (e)), removing these fees for such transactions while maintaining other fee exemptions. It does not affect new deeds of trust or other fee structures.

SB 5831, the Uniform Mortgage Modification Act, standardizes rules for modifying home mortgages in Washington State. It applies to changes like interest rate reductions, maturity date extensions, payment schedule adjustments, or forgiveness of unpaid amounts, directly affecting homeowners and lenders. The law ensures these modifications don’t change a mortgage’s legal priority or require recording, preserving the mortgage’s original standing. It covers specific modifications listed in the bill but excludes changes to property encumbrances, obligors, or mortgage assignments. The act aligns Washington with a nationally recognized model to streamline mortgage relief processes.

SB 5686 expands and funds the existing foreclosure mediation program, directly affecting homeowners facing foreclosure and unit owners (like those in condominiums or HOAs) facing delinquency for past-due assessments. It broadens the definition of residential real property to include properties with up to four units, bringing more individuals under the program's scope. The bill outlines housing counselors' duties to assist both borrowers and unit owners in good faith to reach resolutions with lenders or associations. It also clarifies that referrals to mediation can occur up to 90 days before a trustee's sale, or 25 days before an amended sale date.