If you fall behind on your mortgage payments in Washington, the bank (or the servicer on the bank's behalf) will most likely start a nonjudicial foreclosure. Nonjudicial foreclosures happen without court supervision. Washington law sets out the specifics of what steps the bank needs to complete.
At the end of the process, assuming you don’t successfully fight the foreclosure or work out a way to avoid it, your home is sold to a new owner at a foreclosure sale. The sale proceeds go towards repaying the money you borrowed.
While that explanation probably sounds pretty straightforward, Washington’s foreclosure process is complicated, and you have rights throughout the process. Here’s a detailed description of what usually happens in a Washington foreclosure so that you know what’s supposed to happen and what you can do if you want to try to save your home.
When Does Foreclosure Start in Washington?
If the property is your principal residence, in most cases, federal law requires the servicer to wait until the loan is more than 120 days overdue before officially starting the foreclosure. This preforeclosure period gives you some breathing room before a foreclosure starts.
During this time, you can get current on the loan or try to work out another option to avoid foreclosure, like a loan modification. In some limited situations, however, the foreclosure can start earlier, like if you violated a due-on-sale clause or if the servicer is joining the foreclosure action of a superior or subordinate lienholder. (12 C.F.R. § 1024.41).
What Are My Rights in a Washington Foreclosure?
Before a foreclosure starts, the borrower generally gets the right to participate in a meeting with the bank (usually called the borrower’s right to “meet and confer”) to try to work out a loss mitigation option. This option applies to residential properties of up to four units.
The foreclosing bank has to contact you about this meeting, or meet the requirements for attempting to contact you, at least 30 days before issuing a notice of default (see below). You'll get a notice that informs you of your right to meet with the servicer of your loan. If you request a meeting within 30 days of the date of the letter, the bank can’t issue a notice of default for another 60 days (90 days total). (Wash. Rev. Code § 61.24.031).
You also get the opportunity to participate in mediation to try to avoid a foreclosure. A referral to mediation by a housing counselor or attorney may be made between the time the notice of default is issued and no later than 90 calendar days before the date of sale listed in the notice of trustee sale. If an amended notice of trustee sale is recorded providing a 45-day notice of the sale, mediation must be requested no later than 25 calendar days before the date of sale listed in the amended notice of trustee sale. (Wash. Rev. Code § 61.24.030).
If you fail to elect mediation within this time frame, you and the lender may (but are not obligated to) agree in writing to enter the mediation program. (Wash. Rev. Code § § 61.24.163). To participate in mediation, you must get a referral from a housing counselor or attorney. (Wash. Rev. Code § 61.24.163, § 61.24.030).
How Does the Washington Nonjudicial Foreclosure Process Work?
A third party, called a "trustee," handles the nonjudicial foreclosure process in Washington. At least 30 days before recording or serving a notice of sale, the trustee mails a notice of default to you and posts it on the property (or personally serves it to you). (Wash. Rev. Code § 61.24.030).
Then, in most cases, at least 120 days prior to the sale (90 days in some circ*mstances), the trustee:
- records a notice of sale with the county recorder's office
- mails a copy of the notice of sale to you, and
- posts the notice on the property or serves it to an occupant. (Wash. Rev. Code § 61.24.040).
The trustee also has to publish the notice of sale in a newspaper. The bank can’t hold the sale less than 190 days after the date of default. (Wash. Rev. Code § 61.24.040).
After the sale, the purchaser is entitled to possession of the home on the 20th day following the foreclosure sale. If you don't leave the property, the purchaser may file a lawsuit to evict you. The purchaser has a right to summary proceedings to get possession of the property. (Wash. Rev. Code § 61.24.060).
Options Available for Washington Borrowers During Foreclosure
Washington law gives you the right to stop a nonjudicial foreclosure sale by reinstating the loan at any time prior to the 11th day before the sale. (Wash. Rev. Code §§ 61.24.040, 61.24.090).
Or you might qualify for an alternative to foreclosure after applying for a loss mitigation option.
Does Washington Have a Redemption Period After a Foreclosure?
In some states, the borrower can redeem the home within a specific amount of time after the foreclosure.
In Washington, however, the borrower doesn’t get a redemption period following a nonjudicial foreclosure. (Wash. Rev. Code § 61.24.050).
Does Washington Allow Deficiency Judgments After Nonjudicial Foreclosures?
When a foreclosure sale fails to bring in enough to repay the mortgage debt, including fees and costs, the difference between the sale price and the total debt amount is called a “deficiency balance.” Many states allow the foreclosing bank to get a “deficiency judgment” for this sum against the borrower.
In Washington, deficiency judgments aren’t allowed after nonjudicial foreclosures. (Wash. Rev. Code § 61.24.100). (But if the bank uses a judicial foreclosure process, a deficiency judgment is generally allowed.)
Talk to a Local Washington Foreclosure Lawyer
This article provides details on foreclosure laws in Washington and federal mortgage servicing laws, with citations to statutes so you can learn more. Statutes change, so checking them is always a good idea. How courts and agencies interpret and apply the law can also change. And some rules can even vary within a state. These are just some reasons to consult an attorney if you’re facing a foreclosure.
While this article provides an overview of a typical foreclosure in Washington, remember that state and federal foreclosure laws are complicated, and cases can proceed differently depending on the circ*mstances. Also, servicers and banks sometimes make mistakes or skip steps, but most foreclosure errors go uncontested. In cases where the servicer or foreclosing bank omitted a required step, made an error, or violated state or federal foreclosure laws, you could have a defense that could force it to start the foreclosure over, or you might have leverage to work out an alternative.
If you believe your rights were violated, talk to a local foreclosure attorney or legal aid office immediately. A lawyer can give you information about different ways to fight the foreclosure in court, as well as information about different ways to potentially avoid foreclosure.
A HUD-approved housing counselor can also provide helpful information (at no cost) about ways to prevent a foreclosure.
