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Help is available for
homeowners caught in the mortgage crisis
By Rep. Norma Smith
Many families in
Washington are struggling. Property taxes are rising and the costs for
fuel and food are skyrocketing. These added costs, along with some
unscrupulous subprime mortgage lenders, have undermined the American
dream for too many families in our state and around the nation.
I am happy to report the Legislature took some bold action this year to
help homeowners facing foreclosure and protect consumers applying for
home loans.
I was pleased to support a measure this year that provides more
certainty for new homebuyers. House Bill 2770 was the product of the
Homeowner Security Task Force formed to evaluate the instability in the
national subprime mortgage market and make recommendations that would
minimize the impact of this national trend in Washington. The task force
was comprised of 17 individuals from consumer groups, the financial
industry, construction and real estate industries, non-profit
organizations and government.
The bill tackles the confusion of home loans by requiring mortgage
brokers to disclose more clearly the many facets of the loan, including
alerting the consumer of the best available interest rate for which he
or she qualifies. It also limits prepayment penalties that may apply to
an adjustable-rate mortgage. The most significant part of House Bill
2770 is that it builds sideboards in the mortgage lending industry. For
example, a framework for penalties is established for crimes related to
mortgage fraud. Negative amortization of a home loan and “steering”
consumers to a less advantageous home loan are also prohibited under the
new law.
Another measure I supported, Senate Bill 6381, mandates mortgage brokers
to have a fiduciary responsibility to borrowers. This will make sure
mortgage brokers are acting in good faith and requires full disclosure
to the borrower with regard to fees and expenses paid as part of the
loan.
In addition, the Legislature allocated funding this year for the
Washington State Department of Financial Institutions to set up
counseling services for consumers caught in the subprime lending crisis
and possibly facing foreclosure.
I encourage families who need assistance with their home loan to contact
the Washington State Homeownership Information Hotline at 1-877-894-4663
or visit
www.homeownership.wa.gov for a list of counselors in their area.
Families deserve to be treated fairly, particularly when purchasing
their most valuable asset – a home. As part of your legislative team, I
will continue working on fixes to the lending crisis and fight to ensure
families can afford the American dream.
# # #
Rep. Norma Smith, 10th
Legislative District, serves on the House Insurance Financial Services and
Consumer Protection Committee.
For more information, contact:
Bobbi Cussins, Public Information Officer:
(360) 786-7252
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