Foreclosure

Washington Foreclosure — Deeds of Trust and Process ## Washington Uses Deeds of Trust Washington overwhelmingly uses the deed of trust as its primary security instrument. The three-party structure enables non-judicial foreclosure: - Trustor: Borrower; conveys bare legal title to trustee as security - Trustee: Neutral third party (typically a title company or attorney); holds the power to sell - Beneficiary: Lender; holds the beneficial interest This structure enables non-judicial foreclosure (RCW Chapter 61.24) — faster and less expensive than judicial foreclosure. ## Non-Judicial Foreclosure Timeline 1. Borrower defaults on the loan 2. Lender records a Notice of Default and serves it on the borrower and other parties with recorded interests 3. 30-day cure period: Borrower can reinstate the loan by paying all arrears, fees, and costs 4. If not cured: Trustee records and serves a Notice of Trustee's Sale at least 90 days before the sale 5. Foreclosure Fairness Act (FFA): For owner-occupied residential property, lenders must notify borrowers of their right to mediation before completing non-judicial foreclosure 6. Reinstatement right: Borrower may reinstate up to 11 days before the trustee's sale date 7. The sale: Public auction; trustee's deed issued to winning bidder ## Washington's Critical Anti-Deficiency Rule After non-judicial foreclosure on a deed of trust secured by a borrower's residence, the lender is generally prohibited from pursuing a deficiency judgment against the borrower under RCW 61.24.100. If the property sells for less than the loan balance, the lender absorbs the loss. This is a major consumer protection that distinguishes non-judicial from judicial foreclosure in Washington. Judicial foreclosure is also available for deeds of trust (and for mortgages) but is rarely used because it is slower and…