Proposed bill from Sen. Frockt would protect residents selling their home | Home & Garden

If you’re under water in your mortgage and thinking about selling your home for a loss, a new bill from 46th District Sen. David Frockt aims to give you some extra protection.

The bill would require banks to choose between two options, either selling off the debt they didn’t recover from the home sale or taking it as a tax write-off, rather than the common practice of doing both.

“What we do in this bill is essentially provide the same type of protection to homeowners who are not yet in foreclosure but are at risk for foreclosure,” Frockt said. “I think in doing so, what we’re going to do is clear out and make some of these sales go quicker, and that’s better for the overall health of the real-estate market.”

Some may say the bill is essentially forcing banks and lenders to take a loss, but Frockt disagrees.

“If a homeowner in distress is in a short-sell situation anyway, the  bank is taking a loss anyway because realistically they are not going to collect the full amount of the debt,” he said.

Short sales make up about 40 percent of homes for sale around Puget Sound,” said Frockt, who represents North Seattle, Greenwood, Phinney Ridge, Lake City, View Ridge and parts of Green Lake and the University District.

Frockt has support from the state realtors association, which argues that helping right the real-estate market will be a boost to the overall well-being of our economy.