Quick Facts
– 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.
Non-Judicial Foreclosure
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 the property to pay off the balance on the loan in the event of a 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.
Lender May Obtain A Deficiency Judgment
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.
