Washington has passed Senate Bill 5686 (“S.B. 5686”) to expand the state’s foreclosure mediation program. The bill includes several key provisions that are intended to help homeowners facing potential foreclosure. It introduces a new process for condominium owners to receive assistance when they are at risk of foreclosure due to unpaid homeowner association (“HOA”) assessments. S.B. 5686 also includes a new definition for assessment as “all sums chargeable by the association against a unit, including any assessments levied for common expenses, fines or fees levied or imposed by the association pursuant to chapters 64.32, 64.34, 64.38, and 64.90 RCW or the governing documents, interest and late charges on any delinquent account, all costs of collection incurred by the association in connection with the collection of a delinquent owner’s account, including reasonable attorneys’ fees.”
Condominium owners that are past due on HOA assessments will have access to housing counselors, civil legal aid, and foreclosure mediation through the state’s Foreclosure Fairness Program. The bill requires that an owner and an HOA representative must “meet and confer” to try to resolve assessment delinquencies before a foreclosure proceeding can begin. If a condominium owner has been referred to mediation before the filing of a judicial foreclosure, the HOA may not file a complaint for judicial foreclosure until the association receives the mediator’s certification stating that the mediation has been completed.
In addition, S.B. 5686 adds a new section to chapter 61.24 RCW that requires all residential mortgage loans closed on or after July 27, 2025, to include a “foreclosure prevention fee” of $80. The fee is required to be assessed on any residential mortgage loan taken on a property located within Washington state, except for reverse mortgage loans issued to seniors over the age of 61. The foreclosure prevention fee may be financed in the loan and paid from loan proceeds or paid from a borrower’s cash contribution at closing. An escrow agent, or other settlement or closing agent processing a residential mortgage loan, shall deposit the $80 fee into the state’s new Foreclosure Fairness Account, which supports the state’s Foreclosure Fairness Program.
The escrow agent, or other settlement or closing agent, is required to provide borrowers with a notice of the foreclosure prevention fee and description of its purpose, at or before the time the foreclosure prevention fee is assessed. The Washington Department of Commerce has published a model form that may be used to comply with this requirement.
As of the July 27, 2025, effective date, DocMagic will make the new form, “Foreclosure Fairness Act (FFA) Disclosure – Foreclosure Prevention Fee” (Form ID: WAFFAD.MSC), available on the Forms List for use. However, since the requirement for disclosure is on an escrow agent, DocMagic will not automatically include the disclosure in the closing package. If users wish to have the form automatically included in Washington closing packages, please contact DocMagic’s Customer Service.