How foreclosure works in Washington
Most Washington foreclosures happen outside of court, in an order set by state law. Here is that order, with what each notice means for you.
Judicial or nonjudicial: which applies to you
Most home loans in Washington are secured by a deed of trust. A deed of trust names a trustee, a third party with the power to sell the property if the loan goes unpaid, without a lawsuit. That’s nonjudicial foreclosure. It’s governed by the Deeds of Trust Act, chapter 61.24 of the Revised Code of Washington, and it’s what the timeline below describes.
A smaller number of loans are foreclosed through the courts, called judicial foreclosure. That route runs through a lawsuit in superior court, and afterward the owner may have a period to redeem the property. If you’ve been served with a summons and complaint, speak with an attorney right away, because the rest of this page won’t match your case.
One note before the steps. The waiting periods below are minimums. In practice, files move at very different speeds depending on the servicer, the trustee, the loan type, and any mediation or modification review under way. Read this as a map, and confirm your own dates with an attorney or a housing counselor.
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The early months
Missed payments
Late notices, then calls and letters about assistance.
After a missed payment, the servicer charges a late fee and begins contacting you. Federal servicing rules generally require early outreach about loss mitigation, and generally bar a servicer from starting the foreclosure itself until you are more than 120 days behind.
Those first months are the most valuable time you have. Every option on the options page is still open. Open every letter, call the servicer, ask what programs apply to your loan, and contact a HUD-approved housing counselor.
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Before any notice of default
Required outreach about your options
A letter describing alternatives to foreclosure, and an offer to meet.
For most home loans on a house, condo, or property of up to four units, Washington requires the lender, or someone acting for it, to contact you by letter and by phone before a notice of default can be issued, to discuss alternatives to foreclosure. The letter has to list phone numbers for finding a housing counselor and legal help, and it warns that waiting too long can cost you the chance at mediation. You can ask for a meeting. If you respond within 30 days of the letter, the law gives you more time to meet before a notice of default can go out.
Respond, and ask for the meeting. A housing counselor can help you put your financial picture together first, so you walk in with numbers.
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The formal start
The notice of default
A formal letter stating what is owed and what it would take to cure.
The notice of default lists the payments past due, the fees and costs added so far, and the amount needed to bring the loan current. It has to be sent at least 30 days before a notice of trustee’s sale can be recorded.
Read the numbers carefully and ask the servicer to explain anything you don’t recognize. If you might want mediation, this is the time to talk with a housing counselor or an attorney about a referral. If you’re considering a sale, this is a good point to start one, with time for an ordinary listing.
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Alongside, if you qualify
Mediation under the Foreclosure Fairness Act
A structured meeting with the lender and a neutral mediator, by referral.
Washington’s Foreclosure Fairness Act, passed in 2011, created a mediation program for homeowners, and it now covers most home loans on residential property of up to four units. A HUD-approved housing counselor or a Washington attorney can refer you after a notice of default has been issued. The referral has to be made no later than 90 days before the sale date listed in the notice of trustee’s sale, so ask about it early. The program runs through the Washington State Department of Commerce.
In mediation, you and the lender exchange financial information and meet with the mediator to see whether a modification or another alternative can work. The lender is required to take part in good faith. The law also limits how the foreclosure can move forward while mediation is under way; your counselor can tell you how that applies to your dates. The lender isn’t required to accept any particular proposal, so the outcome depends on what the two sides can work out.
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At least 120 days before the sale
The notice of trustee’s sale
A recorded notice giving the date, time, and place of the sale.
The trustee records the notice of trustee’s sale with the county, which makes it public: in Pierce County with the Auditor, in King County with the Recorder’s Office. It’s also mailed to you and posted on the property or delivered to the occupants. For most home loans, the notice has to be recorded at least 120 days before the sale date (for some other loans, such as commercial or seller-financed ones, the minimum is 90 days), and the notice states what it would take to reinstate.
If you haven’t yet had an attorney look at your file, this is the point to do it. It’s also the point where a sale, if you’re considering one, needs to begin in earnest. Trustees can and sometimes do postpone a sale, including when a closing is near, but that decision is theirs to make.
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Eleven days before the sale
The reinstatement window closes
The last point at which catching up alone ends the foreclosure.
Your right to reinstate generally ends eleven days before the scheduled sale. Until the sale itself, the loan can still be paid off in full. That payoff is how a sale to a regular buyer ends a foreclosure: escrow pays the lender at closing, and the trustee’s sale is cancelled.
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Sale day
The trustee’s sale
A public auction, conducted by the trustee.
The trustee sells the property at a public auction to the highest bidder. The lender often bids up to the amount it’s owed. After a nonjudicial trustee’s sale in Washington, there is generally no right to redeem the property.
If the sale brings more than the debt and costs, the surplus is deposited with the superior court clerk, and junior lienholders and then the former owner can claim it through the court. In most nonjudicial foreclosures of a home loan, the lender can’t pursue the borrower for a shortfall, though there are exceptions an attorney can explain.
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After the sale
Possession passes to the buyer
A deadline to leave, and a court process if it’s missed.
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, the buyer has to go through the court with an unlawful detainer action. Tenants living in a foreclosed home have separate notice rights.
What the timeline doesn’t show
Real files rarely run on the minimum schedule. A notice of trustee’s sale can be recorded, the sale postponed, and a new date set, more than once. A modification review can run alongside the foreclosure. A bankruptcy filing pauses a sale while the case is open, which is a question for a bankruptcy attorney.
The pattern that matters is simpler. At the default stage, nearly every option is open. By the time a sale date is recorded, some have closed and the rest are harder to arrange. That holds for keeping the home and for selling it.
Where a sale fits in the process
A sale to a regular buyer can close at almost any point before the trustee’s sale, as long as a buyer is found and escrow can finish in time. Starting around the notice of default leaves a listing room for ordinary delays. Starting after the notice of trustee’s sale can still work, with much less margin for the delays that come with a buyer’s inspection and loan. The page on selling before a trustee’s sale covers how that timing is managed.
If you’re somewhere on this timeline and aren’t sure where, call me. I’ll help you read the notices you have and work out what the dates mean, and I’ll tell you when the next call should be to an attorney.