Over 30,000 Washington homeowners lost their homes in 2009, 37,000 in 2010, and the Associated Press reports that 2011 is projected to be even worse, with 41,100 home foreclosures forecast.

Many people could keep their homes if they could get their lender to work with them to come up with a modified loan. Doing so would not only help keep home values up – it would also reduce social costs, and protect the economy as it recovers from recession. Unfortunately, very few banks and mortgage holders have systems in place to work with homeowners in that manner.

Recognizing that borrowers deserve a chance to work out a solution that benefits both parties before losing their home, state Representative Tina Orwall and Senator Adam Kline have recently introduced legislation requiring mortgage lenders to participate in mediation at the request of the homeowner. That process is designed to determine whether the mortgage can be modified so payments are more affordable to the homeowner. The bill is similar to recent successful legislation in Nevada.

There’s more. Under existing state law, a lender or mortgage holder is required to offer to meet with the home owner face-to-face to discuss options prior to going forward with a foreclosure. This can result in a mortgage modification even before mediation begins. Since banks have almost universally ignored this law and proceeded to foreclosure without a face-to-face meeting with the homeowner, the proposed legislation will beef up Washington’s existing“meet and confer” requirement.

The bill also funds additional housing counselors, who are available to assist home owners in the complex process of fighting foreclosure and working toward an equitable solution. And it provides for remedy under the Consumer Protection Act if a lender or mortgage holder doesn’t follow the proper procedures in foreclosing on a person’s home.

So far, the bill looks popular: since its introduction, Rep. Orwall’s bill has picked up 47 co-sponsors in the House, and Sen. Kline’s has attracted 18.