In response to a request from NRMLA, the Department of Housing and Urban Development issued a waiver allowing mortgagees servicing HECMs in Washington State to proceed with judicial foreclosure actions in accordance with new state law requirements.
Why it matters: Earlier this year, the Washington State Supreme Court issued a ruling in Vargas v. RRA CP Opportunity Trust 1 that effectively ended servicers’ ability to foreclose on HECMs through the state’s non-judicial foreclosure process.
Go deeper: HUD Handbook 4000.1 identifies Washington as a non-judicial foreclosure state. The waiver provides much-needed flexibility for servicers to comply with Washington law while continuing to meet HUD’s foreclosure timelines and requirements.
- Non-judicial foreclosure allows a lender to foreclose on a property without court involvement. The transition to judicial foreclosure in Washington introduces additional legal proceedings, court appearances, and extended timelines for mortgagees.
In its request to HUD, NRMLA noted that these changes would significantly increase the legal and administrative burden on servicers. In response, HUD established an allowable attorney fee of $5,950 for judicial foreclosures in Washington State, an amount consistent with other judicial foreclosure jurisdictions such as New York, Florida, and New Jersey.
