How does the Washington D.C. Foreclosures Process work? What specifically do you need to know, and when does everything happen during a foreclosure? This is a walkthrough of how the Washington D.C. Foreclosure Process works from start to finish. This will help clarify the pitfalls of the foreclosure system for homeowners.
In Washington D.C., banks need to wait 60 days prior to filing a foreclosure action against the property. Washington D.C. is a non-judicial state, which means the foreclosure action does not need to be filed in court, as long as the lender has a Power of Sales clause in their mortgage agreement. This document allows the lender to pursue the property with legal action.
During this time the bank contacts the buyer to peacefully resolve the situation. They will contact the buyer over the phone, and send them notices in the mail informing them of different options available to them.
Due to the Saving D.C. Homes from Foreclosure Act, foreclosure proceedings in Washington D.C. have ballooned. The legislation was designed to help homeowners keep their home in the face of foreclosure and banks are now forced to ask for mediation to fix the mortgage for the homeowner.
The Washington Times reported that, “On average, it takes more than 1,000 days to foreclose on a home in the District and 531 days in Maryland, according to RealtyTrac. The national average is 414 days.” The act slowed the foreclosure process for banks to over 3 years for the average property, because of the arduous rules put in place to help the homeowner keep their property.
Finally Washington D.C. statutes allow for buyers to catch up on all of their outstanding payments, and then resume their normal payment schedule if they simply pay their late bills up to 5 days before the foreclosure sale.
This entire process can happen within the first 30 days of the initial mortgage delinquency.
After 30 days, the bank can then send a Notice of Default letter to the borrower notifying them of a potential foreclosure auction on the property after 30 days.
The foreclosure must follow the procedure set forth in the mortgage agreement. If the mortgage does not specify a place, then the lender must obtain a court order dictating where the sale will take place.
Additionally, the bank is required to send a Notice of Sale letter by certified mail to the property owner and mayor of Washington D.C.
After Foreclosure Auction
Once the foreclosure auction happens, the process is finished. Washington D.C. does not have right of redemption rules for foreclosed homeowners.
Additionally, they will require buyers pay any Deficiency judgment on the property. A Deficiency judgment is a judgment level by the lender to recover their lost monies from a property that lost money.
If you have any questions about the Washington DC foreclosure process, please call Express Homebuyers at (877) 804-5252.