Understanding the foreclosure process in WA is an important part of navigating your own home foreclosure.
Before we dive in…
Understanding the Foreclosure Process in WA
What is foreclosure anyway?
Foreclosure is the legal process that lenders use to take back property securing a loan, generally after the borrower stops making payments.
Foreclosure is no fun. But just know that it’s not the end of the world.
When you know how foreclosure in WA works… it arms you with the knowledge to make sure you navigate it well and come out the other end as well as possible.
The Basic Stages of A Foreclosure
There are a few stages that are important to any foreclosure process.
Foreclosure works differently in different states around the country.
The two ways different states use to foreclose upon a property are: judicial sale or power of sale.
Connect with us by calling (253) 226-1614 or through our contact page to have us walk you through the specific foreclosure process here locally in Tacoma.
In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.
Under Judicial Foreclosure:
- Your mortgage lender must file suit in the court system.
- You’ll get a letter from the court demanding payment.
- Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended).
- If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property – usually through an auction.
- Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.
Under Power of Sale (or Non-Judicial Foreclosure):
- The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review.
- After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trustee can then sell your property to the lender at a public auction (notice must be given).
Anyone who has an interest in the property must be notified during either type of foreclosure.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
What Happens After A Foreclosure Auction?
The proceeds from the auction are used to pay off your outstanding loan balance. However, if the sale price isn’t enough to cover the full amount you owe, you might face a deficiency judgment. A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale. Washington law limits the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.
Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.
The Smart Move: Avoid the Auction!
The best strategy is to avoid the foreclosure auction altogether. How? By working with your lender or contact a reputable real estate firm like us at Go to Joe! Real Estate to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
We can help you:
- Negotiate with your lender: We have extensive experience working with banks and can help you explore options like loan modifications, short sales, or even a deed-in-lieu of foreclosure.
- Sell your house quickly: We can help you find a buyer fast, even if your home needs repairs or you owe more than it’s worth.
- Protect your credit: A short sale or other negotiated solution can often have a less damaging impact on your credit score than a full foreclosure.
If you need to sell a property near Tacoma, we can help you. Time is of the essence. The sooner you act, the more options you’ll have. Don’t wait until the auction date is looming. Contact us today for a free, no-obligation consultation.
We buy houses in Tacoma WA like yours from people who need to sell fast.
At Go To Joe! Real Estate, we’re more than just real estate professionals. We’re your neighbors, and we’re committed to helping you navigate the complexities of foreclosure and find the best possible solution for your situation. Don’t face this alone. Go To Joe! Call us at (253) 226-1614 or fill out the form on our website. Let’s work together to protect your future. The foreclosure will not go away just because you ignore it.
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Another Foreclosure Resource For Tacoma WA HomeOwners: