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 it’s also not the end of the world. When you understand how foreclosure in Washington DC works, it arms you with the knowledge to make sure you navigate it effectively and come out on the other end as well as possible.
The Basic Stages of A ForeclosureThere are a few stages to the foreclosure process that are important for you to understand. There are two ways different states can foreclose upon a property – judicial sale or power of sale. However, Washington DC only implements power of sale, which is also referred to as non-judicial. Under Power of Sale (or Non-Judicial Foreclosure):
- The mortgage lender serves you with papers demanding payment without involving the court system, although the process can 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 for the lender at a public auction, but you must be given prior notice.