Washington DC Foreclosure Laws
- Judicial Foreclosure Available: No
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of Trust
- Timeline: Typically 60 days
- Right of Redemption: No
- Deficiency Judgments Allowed: Yes
In Washington D.C., lenders may foreclose on deeds of trusts in default using the non-judicial foreclosure process.
The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".
Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed.
If the terms of the sale are not established in the deed of trust, the lender, or his representative, must obtain a court order specifying the terms of the sale.
However, no foreclosure sale may take place unless the lender gives written notice, by certified mail (return receipt requested), to the borrower at his last known address. This notice must also be sent to the Mayor of the District of Columbia, or his designated agent. Both notices must be sent at least thirty (30) days prior to the sale, with the thirty (30) day period beginning on the day the notice is received by the Mayor. This notice must be given in addition to any notices set forth by the court, the mortgage or the deed of trust.
In Washington D.C., lenders may obtain a deficiency judgment against the borrower for the difference between the foreclosure sale amount and the amount remaining on the original loan. The borrower has no rights of redemption.
|Judicial||Non-Judicial||Process Period||Sale Publication||Redemption Period||Sale/NTS|
|No||Yes||47 Days||18 Days||None||Trustee|
|Trustee Foreclosure Sales Only|
While court foreclosures occasionally occur in the District of Columbia, most foreclosures are out-of-court proceedings. This is because the mortgage or deed of trust usually contains a clause that allows the lender the right to sell the property. Once a borrower is in default, the lender starts foreclosure proceedings after sending a notice to the borrower that the terms of the mortgage or deed of trust have been violated.
The borrower can reinstate the loan up to five days before the foreclosure sale by paying the default amount, including late charges and costs. This can occur no more than once in any two years.
The typical timeline for an out-of-court foreclosure is at least 47 days.
Notice of Sale / Auction
A lender must send a notice of foreclosure sale by certified mail to the owner of the property at least 30 days prior to the sale. The lender must also record the notice of sale with the recorder of deeds and mail a copy to the mayor or the mayor’s agent within this time frame. Traditionally, lenders also inform any lien holders about the sale.
The mortgage or deed of trust may include a particular time and place of the sale. If so, the procedure must be followed. If not, the lender or trustee acquires a court order specifying the sale terms. Likewise, the lender abides by any advertising requirements stipulated in the mortgage or deed of trust. If no requirements are included, the lender typically advertises the foreclosure sale in The Washington Post or The Washington Times five times prior to sale date.
The foreclosure sale is conducted by a licensed auctioneer and typically occurs at the auctioneer’s office. If a trustee postpones the sale, a new notice of sale is republished and resent. Once the sale is complete, the trustee’s deed is recorded.
The borrower has no rights of redemption after a deed of trust foreclosure sale.