DFI remains focused on preventing avoidable foreclosures to the maximum extent possible and expects mortgage servicers to do the same.  Funds from the Washington’s Homeowner Assistance Fund (HAF) are available to resolve delinquencies and to help prevent foreclosure for many homeowners. 

The Washington State Housing Finance Commission (WSHFC), in partnership with the non-profit organization HomeSight, has implemented a pilot program distributing HAF funds to eligible Washington borrowers.1 The HAF program was established through the American Rescue Plan of 2021 to provide assistance to borrowers who have experienced financial hardship during the COVID-19 pandemic.

Washington’s HAF pilot program is already distributing funds to prevent foreclosures.  The full HAF program with broader eligibility criteria is expected to open for applications from borrowers in May of 2022.  Under Washington’s HAF program, borrowers who became delinquent on their mortgage due to COVID-19 may be eligible for up to $60,000 to avoid foreclosure. 

While the funding available through HAF may be sufficient to cure the total delinquency for many borrowers, some may plan to reinstate their mortgage by combining their own funds with a HAF award to cure the total delinquency, or by combining a HAF award with other loss mitigation options.  In such cases, DFI asks that servicers be reasonable with accepting funds, as it may be difficult for borrowers to ensure that funds from two sources arrive on the same day.  

The Federal Housing Finance Agency (FHFA) recently announced that Fannie Mae and Freddie Mac will require servicers to suspend foreclosure activity for up to 60 days when a servicer receives notice that a borrower applied for HAF assistance.2 Freddie Mac published additional expectations about foreclosure actions and HAF under Bulletin 2022-8.3 Fannie Mae similarly updated Lender Letter (LL-2021-02) with additional expectations for servicers working with borrowers who have applied for HAF.4

Servicers are encouraged to provide training to customer service representatives regarding the HAF program.  DFI also reminds servicers they are responsible for providing accurate information about loss mitigation options available to a borrower, including information related to HAF, when applicable.  Servicers should review their existing policies and procedures to ensure that borrowers are not improperly referred to foreclosure while a servicer is waiting for payment of HAF funds.

DFI urges servicers to provide all borrowers with sufficient time to move through the HAF application process prior to proceeding with foreclosure.  DFI expects servicers to comply with all applicable current and future requirements about suspending foreclosure actions for borrowers who have applied for HAF.  DFI will be examining servicer’s efforts to work with borrowers experiencing COVID-19 hardships to ensure servicers comply with all applicable federal and state laws and regulations and are assisting borrowers to prevent avoidable foreclosures.

1 Washington State Housing Finance Commission

2 News Release, Federal Housing Finance Agency, Foreclosure Suspension for Borrowers Applying for Relief through the Homeowner Assistance Fund (Apr. 6, 2022).

Bulletin 2022-8, Temporary Guidance on Foreclosure Actions and Homeowner Assistance Fund

4 Fannie Mae, Lender Letter (LL-2021-02) (April 6, 2022).