Attorney General Expands Funding for Program to Help Distressed Homeowners

It’s the flip side of the American dream of homeownership, and a nightmare thousands of Washington residents have experienced in recent years – the threat of losing a home to foreclosure. Thanks to the efforts of the State Attorney General’s office, many of them will now be able to receive free housing counseling that may help them keep their homes.

State Attorney General Rob McKenna announced that his office will provide $550,000 to make free housing counseling available to distressed homeowners. The money comes from an October 2010 agreement with Wells Fargo concerning Wachovia loans. The Attorney General’s Office previously granted $600,000 from the Countrywide/Bank of America settlement to the program.

The current grant, combined with other funding sources, will pay for one-on-one counseling to an estimated 2,770 homeowners in danger of losing their homes. It will also allow for training of housing counselors, and educational seminars targeted to both potential homebuyers and those seeking to avoid foreclosures.

The money will be given to Washington State Housing Finance Commission to fund services available through the Washington State Homeownership Hotline. Homeowners can reach the Hotline by phone at 1-877-894-HOME, x4663, or online at www.homeownership.wa.gov. 

“Housing counselors are lifelines for borrowers on the brink of losing their homes,” says McKenna. “The work of these counselors is important because preventing foreclosures – and stabilizing home values – is key to helping kick-start our economy.”

McKenna spoke from the offices of the Homeownership Resource Center in Shoreline (which serves Woodinville), which receives thousands of calls every month from borrowers struggling to keep their homes. According to the Attorney General’s Office, studies show that homeowners are 60 percent more likely to avoid foreclosure when they receive counseling; they are also more likely to secure loan modifications that lower their monthly payments.

“Housing counselors are providing hope and opportunities all across the state for people who feel hopeless and abandoned and believe they have nowhere to turn for help,” says Karen Miller, Chair of Washington State Housing Finance Commission. “These grant funds make a significant difference in the ability of housing counseling agencies to cover the costs of helping people avoid losing their homes.”

The state’s new Foreclosure Fairness Act provides distressed borrowers with the opportunity to be referred by a housing counselor or attorney to mediation with their lender.

The Attorney General’s Office has also provided grants to the Washington State Bar Association’s Home Foreclosure Legal Aid Project, which provides free legal services to homeowners facing foreclosure. Those included more than $1 million from the Wells Fargo/Wachovia settlement and $320,000 from the Countrywide/Bank of America settlement.

The Attorney General’s Office has earmarked the remaining $60,000 from the Wells Fargo/Wachovia settlement for law school clinics to assist low-income consumers.

Additional resources for homeowners can be found at www.atg.wa.gov/foreclosure.aspx.