OLYMPIA — The state Senate on Friday unanimously passed the first of several measures aimed at curtailing effects of the nationwide mortgage crisis, approving $1.5 million for financial counseling for homeowners facing foreclosure.
Housing security has surged to the forefront of this legislative session amid worries that the subprime loan crisis will hit the state hard next year. The governor’s office expects the number of foreclosures to increase.
“We don’t want Washington to join the rest of the nation, facing the difficulties people are having in keeping their homes,” said the bill’s sponsor, Sen. Jean Berkey, D-Everett.
The Legislature’s overall package of housing bills targets mortgage brokers, calls for more financial literacy and clearer language in foreclosure notices, seeks full financial disclosure from lenders and provides protection against foreclosure scams.
Gov. Chris Gregoire and Democratic leaders also want to expand the state’s Housing Trust Fund by $50 million.
Overall, Washington ranks at the bottom of foreclosures, according to Gregoire’s Task Force for Homeowner Security. But Senate Democrats said the state still faces danger from the rocky mortgage market, with the number of foreclosures spiking 72 percent from November 2006 to November 2007.
The mortgage loan crisis spread throughout the country after the once-booming housing market declined. Particularly hard hit were borrowers of subprime loans, which were given to people who don’t meet the credit standards for a conventional loan. Loan defaults and foreclosures have increased, especially as some of those subprime loans reset to higher interest rates.
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