What's the Foreclosure Process in Washington State?
A non-judicial foreclosure is basically a series of notices given to a borrower and all parties with an interest in a property. These notices are delivered by a trustee and are followed by a public auction, known as a trustee’s sale. The trustee is appointed by the lender and is used instead of a court hearing and a judge ordering a sheriff’s sale. At the auction, the highest bidder is entitled to a trustee’s deed to the property and to possession of the property 20 days after the sale.
The entire process will take a minimum of 120 days but often takes longer due to delays and because some steps must happen on particular days of the week (auctions are often on Fridays only). Typically the entire process will take 7 months or more.
The first step in the process is to appoint a trustee. Most deeds of trust name a title insurance company as trustee and in Washington State title companies do not do foreclosures. Therefore, a new trustee is appointed. This trustee may be a corporation or an attorney but cannot be the same entity or person as the beneficiary under the deed of trust (usually, the this is the lender). The procedures set out in the deed of trust act must be followed by the trustee. The steps are outlined as follows:
- Notice of Default
At least 30 days before a Notice of Trustee’s Sale can be sent out, a Notice of Default must be mailed via first class and certified mail to the borrower and must also be served on the borrower in person or posted on the property. The Notice of Default must tell the borrower what the default is and how much is owed in delinquent payment, fees and other costs to bring the loan current. The Notice of Default also must tell the borrower that if the default is not paid in 30 days, the property will be scheduled for sale at an auction.
- Notice of Trustee’s Sale
If the default is not cured, the trustee schedules the property to be sold at a public auction. The Trustee must order a title report from an insurance company to find out who all the parties are that have a recorded interest in the property. The borrower and anyone who holds an interest in the property along with any occupants of the property must be notified of the Trustee’s Sale at least 90 days before the date of the sale. All partied must be notified by first class mail and the notice must be published in the newspaper twice.
- Notice of Foreclosure
Along with the Notice of Trustee’s Sale, a Notice of Foreclosure is sent to the borrower at the same time. This Notice tells the borrower how money will be needed to reinstate the loan and also an estimate of the amount that will be owed 11 days before the sale. The 11th day before the sale is the borrower’s last chance to reinstate the loan by making up back payments and any additional costs. After 11 days, the lender does not have to accept anything less than full payment of the entire loan plus costs.
- Trustee’s Sale
The Trustee’s Sale is an auction to the highest bidder. It is open to the public and is held at the courthouse. The winner of the auction must pay in cash, cashier’s check or a combination of the two. Usually, this sale is to the lender for the amount owed at the time of sale.
- Trustee’s Deed and Possession
After the sale, the trustee issues a Trustee’s Deed to the winner of the auction. The new owner must wait 20 days from the date of the sale before they can take possession of the property. If the borrower does not move out in that period of time, the new owner must go through the same eviction process a landlord would use to evict a tenant.
- 30 days between Notice of Default and Notice of Trustee’s Sale.
- 90 days between Notice of Trustee’s Sale and the Auction.
- 20 days between the Auction and actual possession.
The proceeding steps are set forth in Washington’s Deed of Trust Act (RCW Chapter 61.24).
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