Foreclosure prevention fee

AN ACT Relating to the foreclosure prevention fee; amending RCW 1
61.24.157; creating a new section; and providing an expiration date.2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:3
Sec. 1. RCW 61.24.157 and 2025 c 393 s 8 are each amended to 4
read as follows: 5
(1) For each residential mortgage loan, as defined in RCW 6
31.04.015(24), originated within or outside of the state of 7
Washington and related to property located within the state of 8
Washington, ((excepting only reverse mortgage loans issued to seniors 9
over the age of 61 )) except as set forth in subsection (2) of this 10
section, a foreclosure prevention fee of $80 shall be assessed and 11
due and payable at the time of closing by the escrow agent or other 12
settlement or closing agent processing the loan closing into the 13
foreclosure fairness account created in RCW 61.24.172. This 14
foreclosure prevention fee may be financed in the loan and paid from 15
the loan proceeds ((or from any borrower cash contribution )) at the 16
time of closing. ((The department may make policies and procedures 17
related to the implementation, collection, remittance, and management 18
of the fee and may enter into individualized agreements governing the 19
efficient remittance of the fee.))20
S-3611.1
SENATE BILL 5938
State of Washington 69th Legislature 2026 Regular Session
By Senators Orwall, Nobles, and Stanford
Prefiled 12/23/25. Read first time 01/12/26. Referred to Committee
on Housing.
p. 1 SB 5938
(2)(a) The following are exempt from the requirements of 1
subsection (1) of this section:2
(i) Any reverse mortgage loan made to a person 60 years of age or 3
older; and4
(ii) Chattel loans or retail installment contracts to purchase a 5
dwelling where the dwelling is secured as personal property.6
(b) If a borrower is purchasing residential real property of up 7
to four units and the purchase transaction is financed in any part 8
through any program administered by the department under chapter 9
43.185A RCW, the covenant homeownership program established under 10
chapter 43.181 RCW, or any homeownership program administered by the 11
Washington state housing finance commission under chapter 43.180 RCW, 12
then the foreclosure prevention fee may only be collected on the 13
first lien residential mortgage loan.14
(3) The foreclosure prevention fee required by subsection (1) of 15
this section must be disclosed in accordance with federal and state 16
law. However, the foreclosure prevention fee may be excluded from the 17
finance charge calculation.18
(4) At or before the time that the foreclosure prevention fee is 19
assessed under subsection (1) of this section, the escrow agent or 20
other settlement or closing agent must provide the borrower with a 21
notice of the foreclosure prevention fee and its purpose. The 22
department must create a notice form that an escrow agent or other 23
settlement or closing agent may use to satisfy this notice 24
requirement. The notice form must include the toll-free numbers for 25
the statewide foreclosure hotline recommended by the housing finance 26
commission. 27
(5) The department has the power and broad administrative 28
discretion to administer and interpret this section and may:29
(a) Make policies and procedures related to the implementation, 30
collection, remittance, and management of the foreclosure prevention 31
fee;32
(b) Enter into individualized agreements governing the efficient 33
remittance of the foreclosure prevention fee; and34
(c) Adopt rules as necessary to interpret, implement, and enforce 35
this section.36
NEW SECTION. Sec. 2. (1) The department of commerce, in 37
consultation with the Washington state housing finance commission, 38
shall evaluate the feasibility of directing a portion of collections 39
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from the foreclosure prevention fee under RCW 61.24.157 to establish 1
a state homeowner assistance fund to provide direct financial 2
assistance to homeowners who have exhausted all options under the 3
foreclosure fairness act to remain in their home. The department of 4
commerce shall submit the results of the study and proposed 5
legislation establishing a state homeownership assistance fund to the 6
governor and the appropriate committees of the legislature by October 7
1, 2026, and in compliance with RCW 43.01.036. 8
(2) This section expires August 1, 2027. 9
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