The Foreclosure Process in Washington
Understanding the foreclosure process in Washington is a crucial aspect of managing your own home foreclosure.
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Before we proceed…
Understanding the Foreclosure Process in Washington
What is foreclosure anyway?
Foreclosure refers to the legal procedure employed by lenders to reclaim property that serves as collateral for a loan, typically occurring when the borrower ceases to make payments. Experiencing foreclosure can be distressing.
However, it is important to understand that it does not signify the conclusion of your financial journey.
By familiarizing yourself with the foreclosure process in Washington, you equip yourself with the necessary knowledge to manage the situation effectively and emerge from it in the best possible condition.
The Basic Stages of A Foreclosure
There are several critical stages involved in the foreclosure process.
The procedure for foreclosure varies across different states in the United States.
The two primary methods employed by states to initiate foreclosure on a property are judicial sale and power of sale.
To understand the specific foreclosure process in your local area of Spokane, please reach out to us by calling 509-769-3439 or visiting our contact page.
In most cases, foreclosure proceedings do not enter the court system until three to six months of missed payments have occurred. Typically, although not universally, lenders will issue multiple notifications indicating that payments are overdue or in arrears.
The Process Under Judicial Foreclosure:
- Your mortgage lender is required to initiate legal proceedings within the court system.
- You will receive a notification from the court requesting payment.
- If the loan is deemed valid, you will have a period of 30 days to submit payment to the court in order to prevent foreclosure, which may occasionally be extended.
- Failure to make payment within this timeframe will result in a judgment being issued, allowing the lender to seek the sale of your property, typically via auction.
- After the property has been sold, the sheriff will issue an eviction notice, compelling you to vacate the premises immediately.
Under Power of Sale (or Non-Judicial Foreclosure):
- The mortgage lender issues documents requesting payment, and while the courts are not obligated to intervene, the process may still be open to judicial review.
- Once the designated waiting period has passed, a deed of trust is prepared, resulting in the transfer of control over your property to a trustee.
- Subsequently, the trustee is authorized to sell your property to the lender at a public auction, provided that proper notice is given.
All parties with an interest in the property must be informed during both types of foreclosure.
For instance, contractors or banks holding liens on a foreclosed property have the right to receive payment from the proceeds of the auction.
What Happens After A Foreclosure Auction?
Upon the completion of a foreclosure, the proceeds from the sale are utilized to settle the outstanding loan amount.
In instances where the auction sale of the property does not generate sufficient funds to cover the loan, a deficiency judgment may be sought against the borrower.
A deficiency judgment occurs when the lender obtains a legal ruling against the borrower for the remaining balance owed on the loan following the foreclosure sale.
Certain states impose restrictions on the amount that can be claimed in a deficiency judgment, capping it at the fair market value of the property at the time of sale, whereas other states permit the lender to pursue the entire loan amount from the borrower.
Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.
It is advisable to steer clear of a foreclosure auction. Rather, consider contacting the bank directly or collaborating with a reputable real estate firm such as REI Branded Home Buyer to assist you in negotiating reductions on the outstanding amount, thereby preventing the necessity of proceeding with a foreclosure.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.
If you need to sell a house near Spokane fast, we can help you.
We buy houses in Spokane Washington like yours from people who need to sell fast.
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Another Foreclosure Resource For Spokane Washington HomeOwners: