What is a Non-Judicial Foreclosure?
Most foreclosures in Washington are non-judicial, which means that a clause in the mortgage agreement (called a power of sale clause) gives the mortgage lender the power to sell the property to pay off a loan in default, without requiring permission from the courts. Nevertheless, non-judicial foreclosures are regulated by laws that give the debtor certain rights. Understanding your rights may mean the difference between keeping your home and losing it.
Non-judicial foreclosures in Washington are regulated by Title 61 RCW, the state law that governs mortgages, deeds of trust, and real estate contracts. The law requires that the foreclosure sale must be scheduled not less than 190 days after the date of default on the loan. Within this time period, there are several intermediate milestones that must be met.
In 2009, the Legislature passed a new law affecting foreclosures on home sales completed between 2003 and 2007. In these cases, a creditor is required to serve a debtor with a notice of default at least 30 days before recording a notice of sale (explained below). Moreover, this notice of default may not be issued until 30 days after the creditor: (i) attempts to assess the borrower’s financial ability to pay the debt; and (ii) explores options for the borrower to avoid foreclosure. This new law should help bring some relief to homeowners who bought during the worst excesses of the housing bubble and are having trouble staying current on their mortgage.
How to Notify Creditors of Foreclosure?
In all cases, the creditor must notify the debtor at least 30 days prior to the sale, by sending the debtor a notice of sale via both regular mail and certified mail with return receipt requested. After the creditor informs the court that the required notice has been sent, the sheriff is required to give public notice about the sale, detailing the time and place of the foreclosure sale, the names of the plaintiff (creditor) and defendant (debtor), the address of the property, and the amount the debtor must pay to make good on the loan and cancel the sale. The sheriff must give public notice in two ways:
- By posting the notice for a period of not less than four weeks prior to the date of sale in two public places in the county, one of which is the courthouse door, and also at the front door of the property being sold.
- By publishing the notice once a week for the four consecutive weeks prior to the sale in a daily or weekly legal newspaper of general circulation in the county.
If your property is being foreclosed, you have until 11 days before the date of the sale to stop it by making the required payment to become current on the loan, plus expenses including trustee and attorney fees.