Washington Foreclosure Laws

Washington foreclosure laws dictate that the primary instrument of security in a loan transaction to purchase property is the Deed of Trust. This makes the state a title theory state, which essentially means that the deed of trust is used more regularly than the mortgage. A deed of trust is allowed to contain a power of sale clause whereas a mortgage cannot.

In the case of a power of sale clause the, the lender notifies the trustee on the property that the borrower has defaulted on their loan. The trustee is then able to commence with a non-judicial foreclosure. If the borrower has a mortgage then no power of sale is present and the lender has to go to court to obtain a judicial foreclosure.

As the non-judicial foreclosure process does not have to go through the court system, there are strict guidelines which have to be followed for the power of sale to take affect. It is a much faster mechanism and is not as expensive to finalize, which is generally believed to be better for both parties involved.

By law the sale of the property must take place by 90 days after the date of the first default, but at the trustees discretion may be extended to 120 days, these dates differ in the case of bankruptcy. Typically an uncontested non-judicial foreclosure takes approximately 120 days in Washington State.

For non-judicial foreclosure there are no statutory rights of redemption available, however in the case of a judicial foreclosure taking place this is a period of one year. Deficiency judgments are not allowed for non-judicial foreclosures, even if it is sold for less than the amount owed on the debt. They are allowed in judicial foreclosures but special circumstances prevail, and these will be made plain in the final foreclosure court order.

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