If you fall behind in your monthly house payments, the lender may try to take the house back. This is generally called foreclosure. If a house is foreclosed, you may lose not only your house, but also all of the money you’ve invested.
A foreclosure or a deficiency judgment could seriously affect your ability to qualify for credit in the future. Avoid this if at all possible.
Foreclosure Mediation Program
The Washington foreclosure mediation program provides Washington homeowners facing foreclosure the opportunity to be referred by a housing counselor or attorney to mediation with their lender to review available options to keep their home.
Foreclosure Prevention Tips
- If you get behind on your payments, call or write your mortgage lender immediately. Clearly explain your situation to your lender. Clearly explain your situation to your lender. Write down who you spoke to, the date, and what was said.
- Stay in your home to make sure you qualify for assistance.
- Arrange an appointment with a housing counselor to explore your options. 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 can stop the foreclosure by making up any delinquent payments plus any costs related to the foreclosure.
Possible Alternatives to Foreclosure
- Special Forbearance. Your lender may be able to arrange a repayment plan that would be based upon your current financial situation and may even provide for a temporary reduction or suspension of your payments. You may qualify for this if you’ve recently experienced an involuntary reduction in income or an increase in living expenses.
- Mortgage Modification. 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.
- Partial Claim. Your lender may be able to work with you to obtain an interest-free FHA loan from HUD to bring your mortgage current, if you qualify.
- Pre-Foreclosure Sale. 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.
- Short Sale. A sale in which the lender agrees to accept a sale price less than the outstanding balance of the loan.
- 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. TIP: If you’re a senior citizen or are disabled and are facing a foreclosure action because of unpaid property taxes or special assessments, you may be eligible to postpone payment of your property taxes or special assessments under two programs in Washington. Contact your local County Assessor’s Office or an attorney for more information.
How Do You Know If You Qualify For Any Of These Alternatives?
Contact your local housing counseling agency for help in determining which, if any, of these options may meet your needs. You should also discuss the situation with your lender.
- Washington Foreclosure Prevention Guide
Resource for homeowners to learn about how to avoid foreclosure.
- Washington State Foreclosure Fairness Program
The Foreclosure Fairness Program provides homeowner foreclosure assistance by offering free housing counseling, civil legal aid, and foreclosure mediation.