Understanding the foreclosure process in Washington is an important part of navigating your own home foreclosure.
Before we dive in…
Understanding the Foreclosure Process in Washington
What is foreclosure anyway?
Foreclosure is the legal process that lenders use to take back property securing a loan when the borrower defaults on payments.
Facing foreclosure can be challenging, but it’s important to remember that there are ways to address this situation.
Understanding the process of foreclosure in Washington is crucial as it equips you with the necessary knowledge to navigate through it successfully and emerge in the best possible outcome.
The Basic Stages of A Foreclosure
There are a few stages that are important to any foreclosure process.
Foreclosure works differently in different states around the country.
The two ways different states use to foreclose upon a property are: judicial sale or power of sale.
Connect with us by calling (253) 799-1210 or through our contact page to have us walk you through the specific foreclosure process here locally in Puyallup, Washington.
In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.
Once the lender has sent sufficient notices and there has been no resolution, the formal foreclosure process begins. This involves either filing a lawsuit for judicial foreclosure or proceeding with the power of sale, depending on the state’s laws. During this time, the homeowner still has opportunities to rectify the situation by paying the overdue amount or negotiating a loan modification. However, if these efforts fail, the property will eventually be sold at a foreclosure auction. This process can be stressful and confusing, which is why it’s essential to understand your rights and options at every stage. We are here to help you navigate this difficult time.
Under Judicial Foreclosure:
- Under Judicial Foreclosure: Your mortgage lender must file suit in the court system.
- You’ll get a letter from the court demanding payment.
- Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended).
- If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property – usually through an auction.
- Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.
- After the sale, the proceeds are used to pay off the mortgage and any associated costs. If there is any remaining balance, it may go to other creditors or be returned to you, depending on the jurisdiction’s laws. Additionally, a deficiency judgment may be sought by the lender if the sale does not cover the full amount owed on the mortgage. This means you could still owe money even after losing your home. It is crucial to consult with a legal professional to understand your rights and options throughout the foreclosure process.
Under Power of Sale (or Non-Judicial Foreclosure):
- The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review.
- After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trustee can then sell your property to the lender at a public auction (notice must be given).
Anyone who has an interest in the property must be notified during either type of foreclosure.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
What Happens After A Foreclosure Auction?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.
A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.
Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.
Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.
Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at Sell My House Now LLC to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.
If you need to sell a property near Puyallup, we can help you.
We buy houses in Puyallup Washington like yours from people who need to sell fast.
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Another Foreclosure Resource For Puyallup Washington HomeOwners: