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MEDIATION

A Washington law (the Foreclosure Fairness Act, RCW 61.24.163) gives homeowners in
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foreclosure the right to request mediation. Mediation provides a neutral setting where both
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the homeowner (the “borrower”) and the “beneficiary” are obligated to act in good faith,
exchange paperwork, and discuss alternatives to foreclosure. If the homeowner timely requests
mediation through a housing counselor or an attorney, the beneficiary cannot continue with a
foreclosure action until mediation is completed.

What is mediation?
Mediation is the process where homeowners sit down with their beneficiary representative(s)
and a trained neutral mediator to discuss alternatives to foreclosure. A mediator does not have
the authority to order a resolution, as a judge in a court case would, but the mediator may be
able to help the beneficiary and the homeowner reach an agreement if possible. Mediation does
not guarantee a loan modification or other resolution. The law requires that both the
homeowner and the beneficiary participate in mediation in good faith.

What do you mean the homeowner and the beneficiary must participate
in good faith?
The law requires that both the homeowner and the beneficiary participate in mediation in good
faith. In order for the beneficiary to satisfy this good faith requirement, it must, at a minimum:
• Timely participate in mediation;
• Provide the mediator and the borrower with a set of documents as required by law prior
to the mediation session (see RCW 61.24.163 for specific timelines and documents);
• Send a representative to mediation who has the authority to modify the homeowner’s
loan (the representative can appear by phone) or agree to another loss mitigation
option;
• Pay their portion of the mediation fee(s). The borrower and the beneficiary each pay
$300 to the mediator for preparing, scheduling, and conducting a mediation session. If
more sessions are necessary, additional fees will apply;
• Analyze the loan for modification, if applicable; and
• Not require waiver by homeowner of any future claims.

In order for the homeowner to satisfy this good faith requirement you must, at a minimum:
• Timely participate in mediation;
• Provide the beneficiary and the mediator with the necessary documents in a timely
manner (see RCW 61.24.163 for specific timelines and documents);

1 Mediation is not available in all cases. Mediation is only available for owner-occupied residential
property consisting of a single-family residence, a residential condominium unit, or a residential
cooperative property of up to four units. Mediation may not be available if your beneficiary is a small
bank or a credit union or other financial institutions that claimed an exemption from this law (see RCW
61.24.166). The Washington State Department of Commerce keeps an annual list of beneficiaries that are
exempt from foreclosure mediation on its website at
http://www.commerce.wa.gov/Programs/housing/Foreclosure/Pages/default.aspx.
2 According to Washington State law at RCW 61.24, the “beneficiary” is the entity required to participate
in mediation.
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