Foreclosure is a process by which a real property lender reclaims property when a borrower defaults and fails to cure a loan obligation.
In the state of Washington, a foreclosure trustee delivers a series of notices to the borrower and other interested parties (such as junior lienholders) following the failure of the borrower to make required mortgage loan payments.
The first notice the borrower receives is called the Notice of Default. The Notice of Default requires the borrower to pay all mortgage arrears and bring the mortgage current within 30 days after receiving the Notice of Default.
If the borrower fails to bring the mortgage current within 30 days, the lender serves a Notice of Sale. The Notice of Sale sets a sale date no sooner than 90 days from the borrower's receipt of the Notice of Sale.
However, the foreclosure sale date cannot take place prior to 190 days from the first default by the borrower and notice of the sale must be published in the local paper where the property resides.
If the borrower fails to bring the mortgage current within 11 days prior to the sale date, the lender (through a foreclosure trustee) conducts a public auction of the property. The sale proceeds are paid by the foreclosure trustee first to taxes then to the first mortgage holder, then to junior lien holders.
Any surplus funds remaining after paying all encumbrances on the property is refunded to the homeowner, however there is rarely a surplus available following the auction.
The foreclosure sale is recorded in the county recording office then is reported to the homeowner's credit bureaus. A foreclosure remains on the foreclosed homeowner's credit report for 7 years.
In the event a junior lienholder does not receive full payment of all sums owed by the foreclosed homeowner, the junior lienholder may file a lawsuit against the homeowner for any sums due and owing on the home loan.
