Avoid Foreclosure | All About Distressed Properties

Am I a Distressed Property Owner?

What are my options?

Washington State Distressed Property Law | Pre Foreclosure

HB 2791, the Distressed Property Law, was enacted to help protect financially strapped homeowners from equity skimming and foreclosure rescue scams. The new law offers safeguards for homeowners trying to stop the loss of their home and requires disclosures and responsibilities for individuals or businesses claiming to help homeowners avoid foreclosure. The law took effect June 12, 2008.

A Distressed Property Owner Defined | Foreclosure Help & Advice

a homeowner at risk of losing their home to foreclosure.
a homeowner that is more than 30 days delinquent on their mortgage payment.
a homeowner that may default within the next four months and has reported this to an attorney, real estate agent, credit counselor, mortgage broker, or various other officials.

A Distressed Property is Defined | Pre Foreclosure

as a single, duplex, triplex, or four-unit residential building, occupied by the owner as the primary residence, that is in foreclosure or is danger of being foreclosed. Single units in larger condominium buildings are note specifically included.

Distressed Homeowner Protections | Help Avoid Foreclosure

The following distressed homeowner protections apply only when a purchase agreement includes an offer for the original homeowner to lease the home and buy it back or receive a portion of proceeds of any resale:

Distressed home purchasers must provide homeowners with a written contract completely describing the terms of the sale and giving the homeowner a right to cancel the sale for within five days.
Prior to the sale, the purchaser must verify that the homeowner has the ability to make rental payments and to buy the home back.
If the homeowner is unable to buy the home back, he or she must receive at least 82 percent of the fair market value of the home at the time the homeowner loses possession of the home.
A homeowner injured by a violation of the statute may collect up to three times the amount of actual damages, not to exceed $100,000.

Distressed Home Consultant Provisions | Short Sale Specialists

Distressed home consultants must provide homeowners with a written contract listing all services and charges.
The consultant has what is called a “fiduciary duty” to the homeowner, meaning the consultant must act at all times in the best interests of the homeowner.
Because the Legislature (unlike similar statutes in other states) did not exempt licensed real estate sales persons from the law, sellers who are behind on their loans or real property taxes may be asked to sign a revised listing agreement limiting the services offered by the real estate agent or broker. Without new agreements, brokers and agents risk unanticipated liability in such cases.

Tips for Distressed Homeowners | Avoid Foreclosure

Free foreclosure and homeownership counseling is available from the State of Washington. Contact the Washington State Homeownership Information Hotline at 1.877.894.HOME (1.877.894.4663) or visit www.homeownership.wa.gov for a list of counselors in your area.

HUD Approved Housing Counseling Agencies for Washington State real estate, visit the HUD official website.
Consider alternatives to foreclosure. Your lender may be able to temporarily reduce your mortgage payments or assist you with restructuring or refinancing your loan so that you can stay in your home. If you're unable to afford the house long-term, you may be able to sell before the foreclosure sale and save some of your equity.
Approach any unsolicited offer of assistance with caution. Seek professional assistance, but carefully select the professionals you choose to help you. Ask for references and check them. Check with state licensing authorities.
Ignore signs, fliers and hand-written notes offering foreclosure help. Scam artists typically advertise their “services” on posters pinned to telephone poles and fliers dropped on your porch. They also contact people whose homes are listed in public foreclosure notices.
Read everything and don’t sign any papers you don’t understand. Once you sign papers, insist on immediately receiving copies that you can keep of all the documents.
The Short Sale Option, click here. What is a Short Sale? Why would a lender accept less than what is owed? More on what you need to know about Short Sales.

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For more information about the Distressed Property Law or how to get advice on selling your distressed property, contact us.

I want to buy a Distressed Property, click here.

SHORT SALE PROPERTY SALE DISCLOSURE

The information provided above is general in nature and is prepared to alert the Short Sale Seller to potential issues, but is not specific advice to the Seller's specific situation. You should consult an Attorney for specific advice as to your situation.