SB 5938

CERTIFICATION OF ENROLLMENT
  SUBSTITUTE SENATE BILL 5938
  Chapter 156, Laws of 2026
  69th Legislature
  2026 Regular Session
  FORECLOSURE PREVENTION FEE—VARIOUS PROVISIONS
  EFFECTIVE DATE: June 11, 2026
Passed by the Senate March 9, 2026  CERTIFICATE
  Yeas 48 Nays 1
  I, Sarah Bannister, Secretary of
  the   Senate   of   the   State  of
  DENNY HECK  Washington, do hereby certify that
President of the Senate  the attached is SUBSTITUTE SENATE
  BILL 5938 as passed by the Senate
  and the House of Representatives on
  the dates hereon set forth.
Passed by the House March 3, 2026
  Yeas 59 Nays 35
  SARAH BANNISTER
  LAURIE JINKINS  Secretary
Speaker of the House of
Representatives
Approved March 23, 2026 3:29 PM  FILED
  March 24, 2026
  Secretary of State
  BOB FERGUSON  State of Washington
Governor of the State of Washington
  SUBSTITUTE SENATE BILL 5938
  AS AMENDED BY THE HOUSE
  Passed Legislature - 2026 Regular Session
State of Washington  69th Legislature        2026 Regular Session
By Senate Housing (originally sponsored by Senators Orwall, Nobles,
and Stanford)
READ FIRST TIME 01/19/26.
1     AN ACT Relating to the foreclosure prevention fee; and amending
2 RCW 61.24.157.
3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
4     Sec. 1.   RCW 61.24.157 and 2025 c 393 s 8 are each amended to
5 read as follows:
6     (1) For each residential mortgage loan, as defined in RCW
7 31.04.015(24), originated within or outside of the state of
8 Washington and related to property located within the state of
9 Washington, ((excepting only reverse mortgage loans issued to seniors
10 over the age of 61)) except as set forth in subsection (2) of this
11 section, a foreclosure prevention fee of $80 shall be assessed and
12 due and payable at the time of closing by the escrow agent or other
13 settlement or closing agent processing the loan closing into the
14 foreclosure   fairness  account   created  in  RCW   61.24.172.  This
15 foreclosure prevention fee may be financed in the loan and paid from
16 the loan proceeds ((or from any borrower cash contribution)) at the
17 time of closing. ((The department may make policies and procedures
18 related to the implementation, collection, remittance, and management
19 of the fee and may enter into individualized agreements governing the
20 efficient remittance of the fee.))
  p. 1  SSB 5938.SL
1     (2)(a) The following are exempt from the requirements of
2 subsection (1) of this section:
3     (i) Any reverse mortgage loan made to a person 60 years of age or
4 older; and
5     (ii) Chattel loans or retail installment contracts to purchase a
6 dwelling where the dwelling is secured as personal property.
7     (b) If a borrower is purchasing residential real property of up
8 to four units and the purchase transaction is financed in any part
9 through any program administered by the department under chapter
10 43.185A RCW, the covenant homeownership program established under
11 chapter 43.181 RCW, or any homeownership program administered by the
12 Washington state housing finance commission under chapter 43.180 RCW,
13 then the foreclosure prevention fee may only be collected on the
14 first lien residential mortgage loan.
15     (3) The foreclosure prevention fee required by subsection (1) of
16 this section must be disclosed in accordance with federal and state
17 law. However, the foreclosure prevention fee may be excluded from the
18 finance charge calculation.
19     (4) At or before the time that the foreclosure prevention fee is
20 assessed under subsection (1) of this section, the escrow agent or
21 other settlement or closing agent must provide the borrower with a
22 notice of the foreclosure prevention fee and its purpose. The
23 department must create a notice form that an escrow agent or other
24 settlement or closing agent may use to satisfy this notice
25 requirement. The notice form must include the toll-free numbers for
26 the statewide foreclosure hotline recommended by the housing finance
27 commission.
28      (5) The department has the power and broad administrative
29 discretion to administer and interpret this section and may:
30      (a) Make policies and procedures related to the implementation,
31 collection, remittance, and management of the foreclosure prevention
32 fee;
33      (b) Enter into individualized agreements governing the efficient
34 remittance of the foreclosure prevention fee; and
35      (c) Adopt rules as necessary to interpret, implement, and enforce
36 this section.
  Passed by the Senate March 9, 2026.
  Passed by the House March 3, 2026.
  Approved by the Governor March 23, 2026.
  p. 2  SSB 5938.SL
Filed in Office of Secretary of State March 24, 2026.
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  p. 3  SSB 5938.SL