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The Non-Judicial Foreclosure Process - How Foreclosures Work in an NJF State

Reblogger
Real Estate Agent with SeattleHome.com -Coldwell Banker Danforth

This is a great overview of the non-judicial foreclosure process in Washington State.  Most of these rules would apply to other non-judicial foreclosure states as well.

Original content by Matt Sweet

We receive a lot of questions that relate to the non-judicial foreclosure process in Washington State. So our Senior Underwriter, Gregg Colbo has put together a brief explanation of the non-judicial foreclosure process in plain english. Enjoy!

Real estate loans (usually in the form of deeds of trusts) can be foreclosed through court proceedings (a judicial foreclosure) or outside of the court’s involvement (a non-judicial foreclosure) in the State of Washington.  If a deed of trust contains a clause which provides “power of sale” to the trustee (a designated party listed on the deed of trust) and a statement which confirms that the property is not being used principally for agricultural purposes it may be foreclosed non-judicially. Otherwise it must be foreclosed judicially. Here’s what happens in a non-judicial foreclosure:

  • Loan payments are not made and a default occurs.
  • Once a default has occurred the lender (or the trustee) sends a written notice of default to the borrower by first class mail and either registered or certified mail. The lender must also post a copy of the notice in a conspicuous place on the premises or personally serve a copy to the borrower.
  • If the borrower does not pay the outstanding amounts (i.e. cure the default) within 30 days of the issuance of the notice of default the lender may authorize the trustee to issue a notice of sale. The sale may not take place less than 120 days from the issuance of the notice of default.
  • If the borrower does not cure the default the trustee sends a written notice of sale to the borrower by first class mail and either registered or certified mail. The notice is also sent to parties with recorded/filed monetary encumbrances (i.e. deeds of trust, mechanics liens, judgments, etc…) and the plaintiff(s) in any filed court action and any party who has recorded a request for notice as specified by law. The trustee must also post a copy of the notice in a conspicuous place on the premises or personally serve a copy to any occupant. The notice is also recorded with the county auditor and must be recorded at least 90 days prior to the sale date.
  • The sale (i.e. trustee sale) may be halted up to 11 days before the sale date if the default is cured or the loan is fully paid. After that time the lender does not have to agree to accept payment.
  • If the sale is not postponed (by the borrower filing bankruptcy) the trustee will “cry” (i.e. conduct) the foreclosure sale in the public place at the time and location specified in the notice of sale. The sale is usually held on the front steps of the county courthouse but it could be held in any location. The sale must be held on a Friday between the hours of 9 a.m. and 4 p.m. If the Friday is a legal holiday the sale will take place on the following Monday.
  • Once the sale takes place the deed of trust is foreclosed. A Trustee’s Deed is recorded soon afterwards and the successful bidder becomes the owner.

Gregg Colbo, Ticor Title Gregg Colbo Sr. Underwriter Ticor Title

If you are unsure of your current title insurance company’s ability to pay claims, or have questions about your coverage, please contact us.


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This article was originally posted at http://www.ticorblog.com/blog/the-anatomy-of-a-non-judicial-foreclosure-in-washington-state/

 

Comments (2)

Matt Sweet
Ticor Title - Gig Harbor, WA

Thank you, Sam for the re-post! 

-Matt

Oct 19, 2010 09:21 AM
Paul Gapski
Berkshire Hathaway / Prudential Ca Realty - El Cajon, CA
619-504-8999,#1 Resource SD Relo

yes they look so nice but Foreclosures are such tough on to stomach.

Oct 30, 2011 04:18 AM