Washington Foreclosure Laws



How are trust deeds or mortgage liens treated in Washington?

Washington primarily operates as a title theory state where the property title remains in trust until payment in full occurs for the underlying loan. Foreclosure is a non-judicial remedy under this theory. The document that secures the title is usually called a deed of trust. Washington law also permits mortgages to serve as liens upon real property and for judicial foreclosures to occur through the courts. Because the power of sale provisions in deeds of trust is a faster mechanism to effectuate foreclosure, this is the primary vehicle to foreclose.


How are Washington mortgages/trust deeds foreclosed?

The primary method of foreclosure in Washington involves what is known as non-judicial foreclosure. This type of foreclosure does not involve court action but requires notice commonly called notice of sale. When the deed of trust is initially signed it will usually contain a provision called a power of sale clause, which upon default allows a trustee to sell the property in order to satisfy the underlying defaulted loan. The trustee acts as a representative of the lender to effectuate the sale which typically occurs in the form of an auction. Because this is a non-judicial remedy, there are very stringent notice requirements and the legal documents are required to contain the power of sale language in order to use this type of foreclosure method.

Power of Sale Notice Requirements:

  1. Prior to initiating a foreclosure sale the lender must serve a notice of default to the borrower at least 30 days before the proposed sale moves forward. This must be sent by certified or registered mail, and be sent to the attorney for the borrower, if any, and either posted on the subject property or personally served on borrower.
  2. Notice of default as described above must contain certain information, including a description of the default, the lenders identification of the deed of trust and a breakdown of foreclosure costs and fees. At any time up until 11 days before the trustee's sale the loan may be reinstated. The loan may be fully paid off at any time prior to the sale. The lender has discretion to reinstate any loan later than 11 days before any sale.
  3. In the event the loan default is not cured during the initial 30-day period referenced in the notice of default, at least 90 days prior to the trustee's sale, the trustee must mail a notice of trustee's sale to the borrower, and all lien holders and any other parties of interest. This notice must also be recorded with the auditor of the county in which the property is located and otherwise be posted and served in the same manner as the notice of default. The notice must also be published in an approved newspaper for legal notices at two specified time periods for the preceding month before the sale.
  4. Foreclosure sales must take place between 9AM and 4PM on a Friday, unless the Friday is a legal holiday, then the sale will occur the following Monday. Sales must occur within 190 days after the date of first default but may be extended up to 120 days at the trustee's discretion. In the event of a bankruptcy, a sale may be reinstated no more than 45 days from the dismissal of the bankruptcy or lifting of the automatic stay.

In Washington, the lenders can also go to court in what is known as a judicial foreclosure proceeding where the court must issue a final judgment of foreclosure. If the deed of trust does not contain the power of sale language, the lender must seek judicial foreclosure. The property is then sold as part of a publicly noticed sale. A complaint is filed in court along with what is known a lis pendens. A lis pendens is a recorded document that provides public notice that the property is being foreclosed upon.


What are the legal instruments that establish a Washington mortgage?

The documents are known as the deed of trust, and in a commercial transaction, a security agreement. Sometimes the mortgage document is combined with the security agreement. Alternatively, a mortgage is filed to evidence the underlying debt and terms of repayment, which is set forth in the note.


How long does it take to foreclose a property in Washington?

Depending on the timing of the various required notices, it usually takes approximately 120 days to effectuate an uncontested non-judicial foreclosure. This process may be delayed if the borrower contests the action in court, seeks delays and postponements of sales, or files for bankruptcy. Much of the ongoing delays in a foreclosure sales relate to the proper service of parties in interest, governmental agencies and junior lienholders. Difficulty is finding or serving these parties delays the process.


Is there a right of redemption in Washington?

Washington has a no post-sale statutory right of redemption for non-judicial foreclosures. For judicial foreclosures, there is a one-year right of redemption and a residential owner may remain in possession of the property during the redemption period.


Are deficiency judgments permitted in Washington?

Generally, a deficiency judgment may be not obtained using the non-judicial foreclosure process when a property in foreclosure is sold at a public sale for less than the loan amount that the underlying mortgage or deed of trust secures. A deficiency judgment can be obtained in judicial foreclosure sale, unless the property had been abandoned for the preceding six (6) months prior to the foreclosure judgment or decree that would preclude any deficiency.


What statutes govern Washington foreclosures?

The laws that govern Washington foreclosures are found in Title 61 Revised Code Washington (Mortgages, Deeds of Trust and Real Estate Contracts).


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