Times have gotten tougher for millions of Americans in recent years due to rising prices and an ailing job market. Sadly, economic depression is always accompanied by increasing foreclosure rates.

Foreclosure is the process by which a lender can repossess your home if you fall too far behind on your mortgage payments. If you’re in danger of finding yourself in this situation, it’s important that you look at all the available information regarding Washington foreclosure laws, as this will give you the best possible shot at keeping your property.

In this blog post, we look at the most important rules and procedures for you to be aware of.

Judicial vs Nonjudicial Foreclosures

The Revised Code of Washington provides for two different types of foreclosures: nonjudicial and judicial foreclosures. In some states, only judicial foreclosures are possible.

Nonjudicial Foreclosure

Nonjudicial foreclosures (the more common of the two) are governed by Sections 61.24.020 through 61.24.140 of the Revised Code. These foreclosures do not require the supervision of the courts; lenders can simply activate a “power of sale” clause in their loan agreements and use a third party known as a “trustee” to repossess your property, before selling it to recoup some or all of the money you owe them.

Judicial Foreclosure

Judicial foreclosures (as established in Sections 61.12.040 to 61.12.170 of the Revised Code), on the other hand, do take place under the supervision of the civil court system. To foreclose on your property in this way, your lender will need to file a lawsuit against you and explain to the court why the action is justified, based on the circumstances of your case. You’ll also get the opportunity to tell your side of the story in court.

A foreclosure that involves the courts is more expensive and time-consuming for a lender than a foreclosure that does not. Judicial foreclosures typically take months to complete, and the process may even go on for years in some cases.

Most residential foreclosures in the state of Washington take place without the involvement of the court system. However, if your property contains agricultural land, this cannot be repossessed other than through a judicial foreclosure.

Notice Requirements

For a nonjudicial foreclosure to be valid, the mortgage lender must provide you with a number of notices. The rules here are as follows:

• Notice of Pre-Foreclosure Options: The first notice must occur prior to the beginning of a foreclosure process, notifying the borrower that they have the opportunity to discuss other alternative options that may help them become current on their mortgage and avoid foreclosure. You can request that this meeting take place in person, if you wish.
• Notice of Default: If you request the opportunity to discuss your options with your lender, the bank cannot issue a Notice of Default until 90 days after it issues the initial notice. If you choose not to take up this opportunity, the lender can issue the Notice of Default after just 30 days. Once the relevant period has elapsed, it can then provide a notice that you’ve defaulted on the property, signaling the beginning of the foreclosure. Lenders generally send these second notices either by registered or certified mail, as well as serving a copy of the notice to you by hand or placing it on a visible part of your property. Upon receipt of this notice, you may have the right to request mediation as a potential means of dispute resolution; this is discussed in more detail in the next section.
• Notice of Trustee Sale: If mediation goes ahead but does not lead to a resolution, the lender can record a Notice of Trustee Sale, which notifies you about the sale of your property and indicates how long you have until you need to leave. Your lender must mail you a copy of this document, as well as sending one to the county auditor, parties affected by any liens on your property, and the plaintiffs in any ongoing court actions against you that are relevant to your property. The notice must be recorded at least 90 days prior to the sale date, and the sale cannot be scheduled any sooner than 120 days after the date of issuance of the Notice of Default.

Under the law, you have the right to reinstate the mortgage loan before the sale takes place or to redeem the property within a certain time frame after the sale happens. If this does not occur, you must vacate the premises within 20 days of the sale.

Foreclosure Mediation

Mediation is a process by which a neutral third party (known as a mediator) helps you and your lender to reach a compromise regarding your mortgage arrears that, ideally, will result in your being allowed to retain possession of your property. Foreclosure mediators are appointed by the state Department of Commerce; your attorney will be able to refer you to a mediator upon request.

As noted above, you can only initiate the mediation process once you’ve received a Notice of Default. If you choose to pursue mediation, the process must generally begin no later than 70 days after a mediator is selected.

While mediation isn’t a magic bullet, it can buy you valuable time in your fight to stay in your home. It can also unearth potential solutions to your payment problems that have not yet occurred to you or your lender. To learn more about whether mediation might be the right option for you, you should consult with a lawyer.

Consult With a Seattle Mortgage Attorney

If you’re facing the prospect of losing your home or your business property through foreclosure, it’s natural to feel lost and confused. Mortgage and foreclosure laws in Washington State are complicated, and the threat of losing your property is incredibly daunting.

At Dickson Frohlich Phillips Burgess, our Seattle mortgage attorneys are here to help you through every step of your foreclosure case. We will do everything we can to find a way for you to stay in your home. Call today at 206-621-1110 (if you’re in Seattle) or (253) 572-1000 (if you’re in Tacoma) to learn more about how our legal team can help you. You can also reach us via the contact form on our website.