Foreclosure is not a topic any homeowner really wants to talk about. However, unforeseen circumstances, the loss of a job, an unexpected health crisis, or the death of a spouse, for example, can quickly land anyone in that position. Having at least a working knowledge of the foreclosure process can help you avoid losing your home to foreclosure.
What is Foreclosure
Foreclosure, as defined on Investopedia, is the legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of the mortgaged property and selling it. Typically, default is triggered when a borrower misses a specific number of monthly payments, but it can also happen when the borrower fails to meet other terms in the mortgage document.
Foreclosure Process in Washington State
In Arlington, Washington, all of Washington State actually, missing one mortgage payment is not cause for lenders to start foreclosure proceedings. If you default on your mortgage loan and don’t take the proper steps to correct it, the lender will eventually begin the foreclosure process, but it doesn’t happen after just one missed payment.
There are certain steps that must be taken leading up to a foreclosure sale of a home. And with each step of the process, there are also specific actions that homeowners can take that can slow, or even stop, foreclosure.
Promissory Note & Deed of Trust
In Washington, when you arrange for a mortgage loan, included among the paperwork are two very important documents: a promissory note and a deed of trust.
The promissory note is the document that says you will pay back the loan. It also details what your payments will be, how many years it will take to pay off the mortgage in full, and other very specific details related to the mortgage itself.
The deed of trust is the document that gives the lender legal authority to start foreclosure proceedings if you default on the mortgage. It usually includes a “power of sale” section that gives the lender a security interest in the property and the authority to sell the property to recover that “interest” – the money loaned to you in the terms of the mortgage.
What If I Miss A Payment? Or Two?
Included in your mortgage agreement there is usually a specified grace period, usually 10 – 15 days. If you still haven’t made the payment within that grace period, your lender will usually add on a late charge. If you miss another payment, you will likely begin to receive collection letters and phone calls.
In the deed of trust that you sign when you secure your mortgage funding in Washinton State, there is often a section included about a “breach letter.” This section requires the lender to send you a notice, called a breach letter, if you miss payments. This letter explains that the loan is in default and if you don’t correct it – cure the default – the lender can call the entire remainder of the loan due and start foreclosure proceedings.
Generally, federal law states that a lender has to wait until you are 120 days late on your mortgage payments before they can officially start a foreclosure. There are exceptions to that, though.
Washington State Preforeclosure
Most foreclosures in Washington are non-judicial – meaning a lender doesn’t have to take it to a judge to proceed. They do, however, have to follow some specific requirements.
One of those requirements is the sending of a “meet and confer” notice. This notice is required before the lender can even start the foreclosure process. This notice informs you that you have the right to talk with the lender about alternative options to foreclosure. If you ask to meet with them, the earliest date they can issue a notice of default on your mortgage is 90 days from the date of the letter. If you don’t request to meet with them, however, they can start foreclosure just 30 days after they first tried to contact you by phone or mail.
What Happens Next?
Before recording or serving a notice of sale, the lender has to mail a notice of default to the property owner. They also have to either post the notice somewhere obvious and visible on the property or personally serve the property owner with the notice.
In addition, 90 – 120 days prior to the posted foreclosure sale of the property, the lender/trustee is required to record a notice of the sale with the county recorder’s office, mail a copy to the property owner, and post the notice of sale on the property. It also has to be printed in the newspaper at this time.
Alternatives to Foreclosure in Washington
Many lenders would rather work with the borrower to correct the situation – catch up on payments – than foreclose on the property. Foreclosure mediation is one option but per Washington State Law, it requires a referral from a housing counselor or attorney.
Another option that is much simpler and more straightforward, is to work with a company like American Made Home Solutions to sell the property ad pay off the remainder of the mortgage. This keeps a foreclosure from impacting your credit and future opportunities. A huge advantage to this option is that you will receive a fair offer quickly and can close quickly with money to take care of the defaulted mortgage.
If the property is placed for sale on the traditional market, or even sold at a foreclosure auction, you can’t guarantee how much it will sell for, and may not have enough to pay the mortgage in full. And, you will still be responsible for somehow paying whatever balance remains.
Why American Made Home Solutions?
American Made Home Solutions is a no-nonsense home buying company based at multiple locations that offers cash for houses in Your Terms. If you need to sell your house fast for cash, we’re your local home buyers serious about buying your home. No repairs, no open houses, no agents, no fees, no commissions.
Our process does not involve getting pre-qualified by a bank in order to obtain a mortgage loan to purchase your property or wasting your time listing the property on the MLS, Zillow, Realtor.com, or any other listing platforms. The reason we are able to move so quickly on the purchase of your house is because we use CASH to buy the property, which means the sale is more secure and we can close faster.
Once we provide a FAIR CASH OFFER for your home, the ball is in your court. You then possess the decision power to move forward with your life by accepting our FAIR CASH OFFER or taking your chances with the traditional home selling process.
Contact us today to see how we can help you avoid foreclosure.
