Washington DC Foreclosure Process

Link to Washington DC  Foreclosure Laws

most Washington DC foreclosures are out-of-court proceedings.

Foreclosure Overview

Washington DC conducts mostly non-judicial foreclosures. Non-judicial foreclosures are held “out of court”. A typical Washington DC foreclosure takes less than two months.

As of June 8, 2020, D.C. Mayor Muriel Bowser signed the Coronavirus Support Congressional Review Emergency Amendment Act of 2020 into law. The Act prohibits residential foreclosures during the time the mayor has declared a public health emergency as well as for 60 days after that. However, the Act does not protect properties owned for investment just those that are owner occupied.

The Act requires lenders with Mortgages in Washington DC to develop a 90-day mortgage deferment program for both residential and commercial borrowers affected financially by the coronavirus (COVID-19) crisis. As with the law overall, this requirement is in effect until 60 days after the end of the public emergency period, as declared by the mayor.

Pre-foreclosure Period

While some court foreclosures occasionally occur in the District of Columbia, most Washington DC foreclosures are out-of-court proceedings. This is because the mortgage or deed of trust usually contains a clause called a “Power of Sale” that allows the lender the right to foreclose and sell the property. Once a borrower is in default, the lender starts foreclosure proceedings after sending a Notice of Sale, (NOS), to the borrower that the terms of the mortgage or deed of trust have been violated.

The borrower is allowed to reinstate the loan up to five days before the foreclosure sale by paying the default amount, including any late charges and costs. Also, there is a caveat specific to Washington DC: This reinstatement can occur no more than once in any two years.

The typical timeline for an out-of-court foreclosure is a minimum of  47 days and generally does not go more than 2 months.

In a Washington, D.C., foreclosure, a borrower most likely get the right to:

  • get a pre-foreclosure notice called a “breach letter”
  • apply for loss mitigation
  • get notice of the foreclosure
  • receive special protections if the borrower or spouse is in the military
  • pay the overdue payments, plus fees and costs, to bring the loan current
  • pay off the loan to prevent a foreclosure sale, and
  • get any excess money after a foreclosure sale.

Notice of Sale & Auction

A lender must send the NOS by certified mail to the owner of the property a minimum of 30 days prior to the sale. The lender must also record the notice of sale with the recorder of deeds as well as mail a copy to the mayor or the mayor’s agent within this time frame. Lenders also traditionally inform any other lien holders and interested parties about the sale.

The mortgage or deed of trust may or may not include a particular time and place of the sale. If so, then the outlined procedure must be followed. If not, the lender or trustee applies for and receives a court order specifying these sale terms. Likewise, the lender must abide by any advertising requirements stipulated in the mortgage or deed of trust. However, if no requirements are included, the lender usually advertises the foreclosure sale in The Washington Post or The Washington Times a minimum of five times prior to sale date.

The foreclosure sale must be conducted by a licensed auctioneer.it typically occurs at the auctioneer’s office but may occur at the property. If a trustee postpones the sale, a new notice of sale must be republished and resent. Once the sale is complete, the trustee’s deed is recorded.

The borrower has no rights of redemption after a Washington DC foreclosure sale.

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