What Is Foreclosure?
Foreclosure is the legal process used to seize your property if you fail to keep up your payments. In some states, foreclosure involves a court proceeding ("judicial foreclosure"), while in others, foreclosure occurs by creditor action alone ("non-judicial foreclosure"). In Washington, creditors have the option of using either the judicial foreclosure process (for mortgages or deeds of trust) or the non-judicial foreclosure process (for deeds of trust only).
What to Do If You're Late on Payments
Stay in Your Home and Gather Your Financial
Stay in your home to make sure you qualify for assistance.
Before contacting your lender or a housing counseling agency, gather your financial documents.
Checklist (PDF) of documents to gather.
Contact Your Lender
Washington homeowners who are having trouble making their monthly mortgage payment should try to work with their lender to assess their ability to repay debt, and consider other options. Lookup your lender's contact information through the Hope Now Alliance website.
Lenders don't have to accept all proposals and are not obligated to do so. So donít wait till the last minute to contact your lender.
If the lender refuses to take partial payments, you should put this money aside to help negotiate with the lender later.
Take Advantage of Free Counseling and Assistance
Free counseling and assistance is also available to Washington residents. To be connected to a counselor, call the Washington Homeownership Information Hotline at 1-877-894-HOME (4663). They will be able talk to you about your situation, evaluate options, and explain assistance programs that may be available to you. You may also contact a Washington HUD approved counselor or a Washington Housing Finance Commission approved counselor.
Review Programs Available to Assist You
A number of federal and local assistance programs are available to
help keep you in your home. Review
foreclosure assistance programs.
Protect Yourself and Your Home
Don't sign anything you don't understand and remember to use registered or certified mail in all your correspondence on legal matters.
Protect yourself from fraud by learning about
Assistance, Refinancing, and Modification Programs
Refinancing, mortgage modification, and foreclosure
assistance programs are available to Washington
residents to help them stay in their home.
Possible Alternatives to Foreclosure
Your lender may be able to temporarily reduce or suspend your payments for a fixed period of time. At the end of that time, you must make a lump sum payment or enter into a long term repayment plan to pay back the reduced or suspended amount. Forbearance may be a good option when the cause of your default is specific and temporary and it is reasonable to assume you will be able to resume making payments at the end of the forbearance period.
Your lender may be able to arrange a simple repayment plan whereby you make your mortgage payment plus an amount of the total in default. The plan could be a few months long, or may extend to a year. At the end of the time period, you would have paid off the past due amount and your payments go back to the original payment amount.
A repayment plan may be a good option when the situation
that caused your default is resolved.
You may be able to refinance the debt and extend the term of your mortgage loan. This will help you catch up by possibly reducing the monthly payments to a more affordable level. You may qualify if you've recovered from a financial problem but your net income is less than it was before the default.
Your lender may be able to work with you to obtain an interest-free loan from HUD to bring your mortgage current, if you qualify.
This will allow you to sell your property and pay off your mortgage loan to avoid foreclosure and damage to your credit rating. If you're unable to afford the house long-term, you may sell the house yourself before the foreclosure sale and save some of your equity.
Deed-in-lieu of Foreclosure
As a last resort, you may be able to voluntarily "give back" your property to the lender. This won't save your house, but may help your chances of getting another mortgage loan in the future.
Information For Renters
If you rent your home, and your home was sold at a foreclosure sale after May 20, 2009, a new federal law, The Protecting Tenants at Foreclosure Act of 2009, requires the new owner to notify you at least 90 days before evicting you. You must still comply with the obligations of your lease or rental agreement during this time period.