Washington State’s New Foreclosure Process
The vast majority of foreclosures in Washington take place outside the judicial system at a trustee sale. Because this process does not occur under the scrutiny of the court, trustees administering foreclosures must follow the Washington Deeds of Trust Act by the letter.
Foreclosure Fairness Act
Under the new Foreclosure Fairness Act, once a borrower misses a payment, the lender must send her a ‘meet and confer’ notice. This notice must advise the borrower that she has the right to request an in person meeting with the lender. If she requests a meeting, the lender must wait 90 days before it can move to the next step in the foreclosure process, sending the notice of default. If the borrower does not request a meeting, the lender can proceed to the notice of default after 30 days.
Notice of Default
By law, the lender must mail a notice of default to the borrower which must also be posted at the property, or deliver it to the borrower in person. The borrower or his attorney can request foreclosure mediation at this point. The purpose of the mediation is to give the borrower a chance to sit face to face with the lender and have a good faith exchange in regard to foreclosure alternatives and loss mitigation options, such as repayment plans, special forbearances, loan modifications, etc. If the borrower requests a mediation, the lender cannot move to the next step in the foreclosure process (scheduling and sending the notice of trustee sale) until the mediation has taken place. If a borrower who receives a notice of default does not request mediation, he has 30 days to “cure” the default, either through payment of the default amount in full, or through the lender’s acquiescence to some other arrangement before the lender can move to the next step, which is to send a notice of trustee sale and set a sale date for the property.
Notice of Trustee Sale
Once the trustee sale is scheduled, the borrower will receive a notice of trustee sale, which will notify the borrower of the sale date. The sale date must not be less than 90 days from the date of the notice. The borrower will have up until 11 days before the sale to reinstate the mortgage and stop the foreclosure by paying the past due payments, plus applicable expenses.
Foreclosure sales in Washington generally take place on Friday mornings at 10am. They are by public auction with the property going to the highest bidder, who must pay in cash. For out-of-court foreclosures, the trustee transfers ownership to the winning bidder, who can take possession of the property 20 days after the foreclosure sale. The foreclosure sale is final, thus the borrower has no right to” redeem” the property.
The process moves quickly, but under the new Foreclosure Fairness Act, borrowers who have fallen behind on their payments have a better chance than ever of coming to a solution with their lender. It is important to call an attorney or housing counselor immediately if you think you have missed a payment, though. Don’t let your mediation opportunity slip by.
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