DELINQUENCY CYCLE OF A MORTGAGE LOAN
In Washington, virtually all home loans made by banks are secured by deeds of trust. Although a mortgage differs from a deed of trust, deeds of trust are commonly referred to as mortgages. An important difference in Washington between deeds of trust and mortgages is that deeds of trust can be foreclosed without the bank having to start a lawsuit and take the homeowner to court. In other words, deeds of trust can be foreclosed nonjudicially. The nonjudicial foreclosure process takes at least 190 days after the date of the borrower’s first default until the day of the foreclosure. Washington has several opt-in provisions that are designed to help homeowners fighting foreclosure. If a homeowner chooses to opt-in to these programs, the foreclosure process is elongated beyond the 190 day minimum. A general foreclosure timeline appears below.
DEED OF TRUST FORECLOSURE TIMELINE.
(1) Deed of Trust must be executed and acknowledged. Deeds of Trust are subject to all laws relating to mortgages on real property. RCW 61.12.010 and .020, 61.24.020, 64.04.010 and .020.
(2) Default. The borrower is in default the first day after the payment was due. The foreclosure of a deed of trust cannot occur less than 190 days after the date of default. See Subsection (8) of the form for the Notice of Foreclosure as set forth in RCW 61.24.040(2).
30 day waiting period
90 day waiting period
30 day waiting period
Foreclosure is postponed until after mediation
90 day waiting period
20 day waiting period
Eviction or Cash for Keys Negotiation with Bank
Notice of Trustee Sale
If mediation is requested
Purchaser can request that previous owner vacate the property
If meet and confer is requested
If mediation is not requested
If meet and confer is not requested
Notice of Default: Homeowner can also request
Notice of Right to Meet and Confer
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(3) Notice of Preforeclosure Options. If a payment is missed, a bank may send a number of letters. The first notice that they are required to send by law is a notice that informs you of your right to “meet and confer,” which means that you can request an in-person meeting with your lender. RCW 61.24.031
If you do not request a meeting with the bank, the bank must wait 30 days before it can continue on to the next step and send you a notice of default.
If you do request a meeting with the bank, then the bank must wait 90 days before it can send you a notice of default.
(4) Notice of Default. A Notice of Default must be given at least 30 days before the Notice of Trustee’s Sale can be recorded or served. RCW 61.24.030(7).
(5) Mediation. Any time after the homeowner has received the preforeclosure notice, but before the homeowner has received the notice of trustee sale, the homeowner can have a housing counselor or attorney request mediation. Mediation provides a neutral setting where both the homeowner and the bank are obligated to act in good faith, exchange paperwork, and discuss alternatives to foreclosure. A homeowner cannot independently request mediation and MUST be referred to mediation by an attorney or a housing counselor. RCW 61.24 For more information, see the Mediation section below at p 34.
If mediation is not requested, the bank must wait 30 days from sending the notice of default before it can publish the notice of trustee sale.
If mediation is requested, the bank may not publish the notice of trustee sale until after mediation has taken place.
(6) Recording of Notice of Trustee’s Sale. At least 90 days before the foreclosure sale, the trustee (not the beneficiary) must record, mail, and serve or post the Notice of Trustee’s Sale. RCW 61.24.040(1). (This is the first notice related to the foreclosure that is a public record.) The trustee must provide the borrower and the grantor with a Notice of Sale. The grantor must also be provided a Notice of Foreclosure. RCW 61.24.040. The trustee doing the foreclosure is often a successor trustee. Accordingly, before the Notice of Trustee’s Sale is recorded, a Resignation and Appointment of Successor Trustee should be recorded.
(7) First Publication. The Notice of Trustee’s Sale must be published twice. The first publication must be on or between the 35th and 28th day before the date of sale. RCW 61.24.040(3).
(8) Opportunity to Cure Default. On any day prior to the 11th day before the sale, the borrower may cure the defaults and cause a discontinuance of the sale. RCW 61.24.090(1). (Within 11 days before the sale date, the beneficiary has the right to demand payment in full.)
(9) Second Publication. The second publication of the Notice of Trustee’s Sale must be published on or between the 14th and 7th day before the date of sale. RCW 61.24.040(3).
(10) Deadline for Motion to Restrain Sale. RCW 61.24.130(2) provides that no court may grant a restraining order or injunction of the sale unless the person seeking the restraint gives 5 days’ notice. RCW 61.24.130(2). Also, if the property owner files a bankruptcy petition at any time prior to the sale, the sale is automatically stayed pursuant to 11 U.S.C. § 362.
(11) Foreclosure Sale. The sale must occur on a Friday. If Friday is a legal holiday, it may occur on the following Monday. RCW 61.24.040(5).
(12) Repossession of the Property from Former Owner. The purchaser at the Trustee’s Sale is entitled to take possession of the property on the 20th day after the sale. RCW 61.24.060.
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(13) Repossession of Property from Tenant. For a renter whose home is sold at a foreclosure sale after May
20, 2009, a new federal law, The Protecting Tenants at Foreclosure Act of 2009, requires the new owner to
notify the tenant at least 90 days before eviction. Additionally, the law requires the foreclosing party (the bank
or trustee that is foreclosing on the home) to send a written notice to the tenant before the home is sold at
foreclosure. This written notice warns the tenant that the home might be sold 90 days or more after the date
of the notice. It must also tell the tenant that the new owner who buys the home at foreclosure is required to
provide the tenant with at least 60 days’ notice before evicting the tenant. These are two distinct notice
periods: the 90 day foreclosure notice tells the tenant when the home may be sold at foreclosure while the 60
day eviction notice period may not begin until after the home is sold. After a tenant receives notification of his
or her right to a 60-day notice to vacate under the law, new owners are still required to provide the tenant
with a 90-day notice prior to eviction, because of the federal law. For more information, see the Tenants’
Rights section (p. 65).
(14) Continuance of Sale. At any time prior to the foreclosure sale, the sale can be continued by the trustee
for up to 120 days. RCW 61.24.040(6).
Information is from "Washington Foreclosure Prevention Resource Guide"