Document Updates: Washington Foreclosure Prevention Fee Disclosure (Cx28412)

Washington Senate Bill 5938, signed into law on March 23, 2026, amends RCW 61.24.157 and expands the applicability of the Washington Foreclosure Prevention Fee for residential mortgage loans secured by property located in Washington.

Under the amended statute, an $80 Foreclosure Prevention Fee continues to be assessed at closing for covered residential mortgage loans. However, the law narrows and clarifies the exemptions from the fee. Effective with the legislation, the fee exemption applies only to:

• Reverse mortgage loans made to borrowers age 60 or older; and
• Chattel loans or retail installment contracts used to purchase dwellings secured as personal property.

The legislation provides that when a purchase transaction involving one-to-four unit residential property is financed through certain Washington state housing assistance programs, the fee may be collected only on the first lien residential mortgage loan.

In addition, the law requires borrowers to receive notice of the Foreclosure Prevention Fee and its purpose at or before the time the fee is assessed. The Washington Department of Commerce is authorized to create a model notice form and continues to have authority to administer, interpret, collect, and manage the fee program.

We are updating Cx28412 to match the new version of the model form published by the Washington State Department of Commerce.

These changes are available for testing on Stage & Stage 2 servers and will take effect on June 11, 2026. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.

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The preceding is for informational purposes only and is not and may not be construed as legal advice. No third-party entity may rely upon anything contained herein when making legal and/or other determinations regarding its practices, and such third-party should consult with an attorney prior to embarking upon any specific course of action.