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WashingtonSB 56862025-2026 Regular SessionSenateWALLET

Expanding and funding the foreclosure mediation program.

Sponsored By: Tina Orwall (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

8 provisions identified: 6 benefits, 2 costs, 0 mixed.

Homeowners gain mediation before association foreclosure

Owners facing association foreclosure through court or a trustee sale can receive mediation referrals from a housing counselor or attorney. Referral generally follows a written meeting request and the meeting, an association refusal, or 30 days without a response. Refusing a scheduled meeting usually blocks referral, except when a recorded sale notice or pending judgment leaves too little time. Referrals are generally due 90 days before a trustee sale, 25 days before a sale under an amended notice after a stay, or before a court foreclosure judgment. Some heirs and people awarded title in divorce or legal separation also qualify, but lenders need not accept loan assumptions. Associations must wait at least 60 days between first and second preforeclosure notices. For referred owners, associations cannot start foreclosure until mediation ends and certification is issued, or 10 days after certification was due if not received; mediation can address repayment but does not forgive the debt.

Counseling and fee protection for homeowners

Beginning January 1, 2026, owners who are late or risk falling behind on covered association assessments can seek housing counseling. Counselors must be approved by HUD or the Washington State Housing Finance Commission. They help owners prepare for association meetings, understand debt documents, and review alternatives to foreclosure. From a meeting request made by or for the owner until the meeting occurs, associations cannot charge collection attorney fees incurred during that period. These protections do not erase the assessment debt.

Earlier notices and capped homeowner collection fees

Covered associations must send a delinquency notice within 30 days after an assessment becomes past due. For homeowners’ associations, this applies when their governing documents allow assessment liens on lots. Notices must go by first-class mail to the property and other provided notice addresses, plus email when known. They must include foreclosure help contacts, in English and the owner’s preferred correspondence language. Until the 15th day after a valid notice, other collection action is barred; allowed charges are actual printing and mailing costs, one administrative fee up to $10, and one late fee capped at $50 or 5% of the unpaid assessment, whichever is less.

Free foreclosure information for association homeowners

Covered associations must keep required preforeclosure information and make it available to owners. Owners can get a free paper or electronic copy in English and their chosen correspondence language. Translation mistakes do not invalidate a good-faith translation effort. Commerce must post association foreclosure resources in the languages it uses for other programs and provide interpretation for spoken requests. These resources cover counseling, meetings, mediation, and delinquency notices.

Dedicated funding for homeowner foreclosure help

The law divides Foreclosure Fairness Account receipts, including the new closing fee, among foreclosure prevention services. Housing counseling receives 50%, the attorney general’s consumer protection division gets 8%, and civil legal aid receives 16.5%. The foreclosure prevention hotline gets 15%, outreach receives 0.5%, and Commerce gets 10% for program operations. Legal aid money must add to, not replace, other federal, state, and local funding. No total funding amount is stated.

Legal protection for homeowner housing counselors

Beginning January 1, 2026, housing counselors helping unit owners under the law receive protection from civil damages. The protection covers acts or omissions while providing that assistance. It does not cover gross negligence or willful or wanton misconduct. This protection applies to counselors, not homeowners.

Borrowers pay $80 at mortgage closing

Each residential mortgage closing on Washington property carries a one-time $80 foreclosure prevention fee, even for loans originated outside Washington. Reverse mortgages issued to seniors over age 61 are exempt. Borrowers can pay from loan proceeds or their cash contribution. Closing agents send the money to the Foreclosure Fairness Account and must explain the fee before or when it is charged. Commerce must create a notice form with statewide foreclosure hotline numbers.

Homeowners share association foreclosure mediation costs

Beginning January 1, 2026, owners and associations each pay half of the mediator’s fee for association foreclosure mediation. Fees can be waived or divided differently with approval from the parties or department. Mediator fees are capped at $400 for sessions lasting one to three hours, with proportional charges for longer sessions. Payment is due within 30 days of referral or as the mediator directs. Each side pays its own attorney fees, and neither side must hire a lawyer.

Sponsors & Cosponsors

Sponsor

  • Tina Orwall

    Democratic • Senate

Cosponsors

  • Bob Hasegawa

    Democratic • Senate

  • Noel Frame

    Democratic • Senate

  • T'wina Nobles

    Democratic • Senate

Roll Call Votes

All Roll Calls

Yes: 113 • No: 79

Senate vote • 4/24/2025

Final Passage as Amended by the House

Yes: 27 • No: 19 • Other: 2

House vote • 4/23/2025

Final Passage as Amended by the House

Yes: 56 • No: 41 • Other: 1

Senate vote • 3/7/2025

3rd Reading & Final Passage

Yes: 30 • No: 19

Actions Timeline

  1. Effective date 7/27/2025*.

    5/20/2025Senate

  2. Chapter 393, 2025 Laws.

    5/20/2025Senate

  3. Governor signed.

    5/20/2025legislature

  4. Delivered to Governor.

    4/27/2025legislature

  5. Speaker signed.

    4/26/2025legislature

  6. President signed.

    4/25/2025legislature

  7. Passed final passage; yeas, 27; nays, 19; absent, 0; excused, 2.

    4/24/2025Senate

  8. Senate concurred in House amendments.

    4/24/2025House

  9. Committee amendment not adopted.

    4/23/2025Senate

  10. Rules suspended. Placed on Third Reading.

    4/23/2025Senate

  11. Floor amendment(s) adopted.

    4/23/2025Senate

  12. Third reading, passed; yeas, 56; nays, 41; absent, 0; excused, 1.

    4/23/2025Senate

  13. Rules Committee relieved of further consideration. Placed on second reading.

    4/22/2025Senate

  14. Referred to Rules 2 Review.

    4/8/2025Senate

  15. Minority; without recommendation.

    4/7/2025Senate

  16. Minority; do not pass.

    4/7/2025Senate

  17. APP - Majority; do pass with amendment(s) by Housing.

    4/7/2025Senate

  18. APP - Executive action taken by committee.

    4/7/2025Senate

  19. Referred to Appropriations.

    3/31/2025Senate

  20. Minority; without recommendation.

    3/26/2025Senate

  21. Minority; do not pass.

    3/26/2025Senate

  22. HOUS - Majority; do pass with amendment(s).

    3/26/2025Senate

  23. HOUS - Executive action taken by committee.

    3/26/2025Senate

  24. First reading, referred to Housing.

    3/9/2025Senate

  25. Third reading, passed; yeas, 30; nays, 19; absent, 0; excused, 0.

    3/7/2025Senate

Bill Text

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