Another Sneaky Tax 
By Jim Palmer Jr.

Starting July 27, 2025, any buyer of a residential property, who uses a loan to purchase, must pay a new $80 fee that bureaucrats call the Foreclosure Prevention Fee.  The intent of this sly new tax is to expand and fund the Foreclosure Mediation Program which outlines specific rights borrowers have during foreclosure proceedings, including access to a statewide hotline for foreclosure and homeownership assistance, housing counseling services, civil legal aid, and mediation services.

Closing agents must collect the Foreclosure Prevention Fee on any loan originated for personal, family or household use, but a third party (lender, seller, etc) is allowed to pay the fee on behalf of the borrower.  The creditor must disclose the Foreclosure Prevention Fee during the normal disclosure process to the borrower that details all of the fees they have to pay, including the cost of the loan prior to closing.

The only exception to this fee is to borrowers over the age of 61 who are securing a reverse mortgage either as a refinance or a new purchase.
One fact that I find interesting is that the Washington Department of Revenue is currently reviewing the language of this legislation because it is unclear whether closers are obligated to collect a Washington State sales tax on that $80 fee.  Now isn’t that something?!  A tax on top of a tax! What a novel idea! 

This article isn’t really intended to be a rant about high taxes in this state, but I must point out that this type of a “fee” is really a sneaky way to increase revenue for pet programs.  I call it sneaky because it is not labeled as a tax and is only levied against borrowers who may only purchase a home once in their lifetime.  There typically is no general outrage from the public against these types of taxes because the general population doesn’t really feel it in their day to day lives, and yet the totality of these burdens are “grievous to be borne.”

Another example of a devious toll that impacts the real estate industry is the huge hike to recording fees that happened a couple years ago.  The recording fee for a one page document in a real estate transaction is $330.  The county clerk who spends a few seconds recording that document doesn’t make that much in wages!  Instead, those exorbitant fees covertly fund eviction prevention services, landlord mitigation programs and preservation and accessibility of historic documents (Home Security Fund Account and Affordable Housing for All Account).