Housing counselors will explain new federal protections for homeowners that start Aug. 31
OLYMPIA — After the federal foreclosure moratorium ended on July 31, Attorney General Bob Ferguson is offering guidance and resources to Washington homeowners about the availability of housing counseling services. Ferguson is encouraging homeowners need to act now to learn what post-forbearance options they may have based on the type of loan they have. Housing counselors can assist homeowners to navigate new federal rules and assistance programs that take effect at the end of August to help people keep their homes.
Homeowners may need help understanding their mortgage documents or what options they have before talking to their mortgage servicer. The Washington Homeownership Resource Center offers free or low-cost resources, including housing counseling, at https://www.homeownership-wa.org/ or by calling 1-877-894-HOME (4663).
New Consumer Financial Protection Bureau (CFPB) rules that take effect Aug. 31 will require servicers to offer more post-forbearance options to homeowners. For some homeowners, these options could include:
- Apply to have their loan interest rate reduced
- Extend the term of their loan
- Reduce their monthly payments
Servicers that fail to comply could be in violation of Washington’s Consumer Protection Act, which the Attorney General’s Office enforces.
“There are now many options available to homeowners in need of assistance so they don’t lose their homes,” Ferguson said. “Homeowners experiencing financial difficulties should contact a home counselor for free today. People have expanded options to get the assistance they need.”
A Harvard University study showed that 2.3 million homeowners remained in active forbearance in early 2021 and 1.9 million of them were 90 days or more behind on their payments. Around 7 million homeowners, 14 percent of all mortgage holders nationwide, entered into a forbearance during the pandemic but 4.8 million people had left those programs by March.
Know your rights and avoid potential scams
The new CFPB rules apply to mortgages on a homeowner’s primary residence. Certain protections for homeowners offered by the CFPB will expire on Dec. 31. Modifications and payment programs will differ based on the types of mortgages people have. A housing counselor can help a homeowner determine what type of loan they have and explain options.
State law requires lenders to notify borrowers prior to foreclosure of the availability of foreclosure counseling and potential mediation. A housing counselor or attorney must refer any homeowners who wish to participate in a mediation program.
With new rules and confusion, scammers may try to take advantage of the situation. Companies may claim they can help homeowners get mortgage relief, stop foreclosure or obtain equity from their homes. Beware of anyone who charges upfront fees, guarantees results, asks you to sign over title to the home or make direct mortgage payments to them.
If you believe you have already been a victim of a “foreclosure rescue scam,” please call the Washington State Attorney General’s office at 1-800-551-4636 or file a complaint with the office online or in writing by going to http://www.atg.wa.gov/FileAComplaint.aspx.
DFI has more information about its programs and general advice for homeowners here: https://dfi.wa.gov/homeownership/
Homeowners can also visit the Department of Commerce’s Homeowner Assistance Fund to see if they qualify for assistance: https://www.commerce.wa.gov/homeowner-assistance-fund/