Direct answers to what Washington homeowners ask when they’re behind on payments. Each is general information; your loan and your dates will shape the specifics.
Under federal servicing rules, a servicer generally can’t start the foreclosure process until you’re more than 120 days behind.
In Washington, for most home loans, the lender must also contact you about alternatives before a notice of default can be issued. Late fees and credit reporting can start much sooner, so the time to act is the first missed payment, when every option is still open.
It varies a great deal. The law sets minimums, and real files usually take longer.
The notice of default has to be sent at least 30 days before a notice of trustee’s sale is recorded, and for most home loans the notice of trustee’s sale has to be recorded at least 120 days before the sale. Mediation, modification reviews, and postponements can all add time. Your own notices show your actual dates, and an attorney or housing counselor can help you read them. The process timeline walks through each step.
Yes, in most cases, right up until the trustee’s sale, as long as the sale closes in time.
The sale has to pay off the loan in full, or the lender has to approve a short sale. At closing, escrow pays the lender and the trustee’s sale is cancelled. The earlier you start, the more room there is for an ordinary sale at a fair price. More on this is on the page about selling before a trustee’s sale.
The sale proceeds pay the debt and costs first. Anything left over is surplus, and you may be able to claim it.
In Washington, surplus funds are deposited with the superior court clerk, and junior lienholders and then the former owner can claim them through the court. Auction bidders usually buy without going inside, and they price that risk into their bids, which is why owners with equity often sell before the sale date.
A Washington law passed in 2011 that, among other things, created a foreclosure mediation program for homeowners.
A HUD-approved housing counselor or a Washington attorney can refer you once a notice of default has been issued, within a deadline the law sets. You and the lender then exchange financial information and meet with a neutral mediator to look for an alternative to foreclosure. The lender has to take part in good faith, though it isn’t required to accept any particular proposal.
For many owners who can’t keep the home, a short sale is the more orderly exit, because the closing date is set in the purchase agreement and the lender’s terms are in writing before you close.
Whether it’s better for you depends on how the lender handles the remaining balance and how forgiven debt is treated for taxes. Ask an attorney and a tax professional to review the lender’s approval before you sign it.
Not from the early letters, which come to you by mail. The notice of trustee’s sale is different: it’s recorded with the county, which makes it public.
That notice is also posted on the property or delivered to the occupants, and it’s usually when the mailers from investors begin. If you sell with me, the marketing won’t mention foreclosure, and I don’t discuss a client’s situation with anyone without permission.
Not the same day. As against the former owner, the buyer at the sale is generally entitled to possession on the twentieth day after the sale.
If the home isn’t vacated by then, the buyer has to go through the court with an unlawful detainer action. Tenants have separate notice protections. An attorney can tell you exactly how the rules apply to your household, and planning a move well before the sale date is far easier than making one after it.
Be careful with them. Washington regulates transactions with homeowners in distress because of schemes that take the deed or an upfront fee and leave the owner worse off.
HUD-approved housing counselors help at little or no cost, and you can find one through HUD at 800-569-4287. Don’t sign over title, pay in advance, or stop talking to your servicer because someone told you to, and have an attorney read anything before you sign it.
Nothing. A conversation is free and private.
If you decide to sell and list with me, my brokerage is paid a commission from the sale proceeds at closing, under a listing agreement you read first. If selling isn’t right for you, I’ll say so and suggest who to call instead. The number is 206.940.0942.
Call with the letters you have, and we’ll go through them together, privately and at no cost.
206.940.0942Austin Hellickson, Managing Broker, LPT Realty. If a call feels like too much today, leave your number and a good time, and I’ll call you.