Exploring Options for Homeowners Facing Foreclosure in Washington State

If you’re struggling with your mortgage payments in Washington State - whether you’re just falling behind or already received foreclosure notices - you’re not alone. It’s a stressful situation, but you do have options.

The most important thing to remember: don’t wait and don’t go through it alone. For guidance and helpful insights on your unique situation, talk with a real estate professional and/or a real estate attorney to understand the best path for you.

Possible Options

• Talk to your bank or mortgage lender right away. Many homeowners avoid the calls, but that can make things worse. Lenders sometimes offer repayment plans, loan modifications, or temporary forbearance.

• Look into reinstatement. In Washington, you may be able to catch up on missed payments (plus fees) up until about 11 days before a foreclosure sale.

• Request mediation. Washington has a Foreclosure Fairness Program that brings you and your lender together with a neutral mediator to explore solutions. This can only be requested after a Notice of Default is issued and within a certain timeline before the sale.

• Sell the home. If you have equity, a traditional sale can pay off the loan and prevent foreclosure.

• Bankruptcy (as a last resort). This can sometimes pause a foreclosure and give you time to reorganize debt, but it requires legal guidance.

How Foreclosure Works in Washington

Most foreclosures here are nonjudicial, meaning they happen outside of court:

• Missed payments trigger lender contact.
  

• Notice of Default is issued.
  

• After at least 30 days, a Notice of Trustee’s Sale is recorded and mailed, setting a sale date at least 90 days (sometimes 120) in the future.
  

• You can stop the foreclosure by catching up (reinstating) up to about 11 days before the sale.
  

• If nothing changes, the home is sold at a public auction.

Unlike some states, Washington does not allow homeowners to “redeem” or reclaim their property after a nonjudicial foreclosure sale.

Short Sales: Selling for Less Than You Owe

If your home is worth less than your mortgage balance, a short sale might be another option. This is where your lender agrees to let you sell for less than what you owe, releasing their lien (a legal claim to your property) so the sale can be completed or "close".

How it works:

1. You list your home with a real estate agent who has short-sale experience.
   

2. You provide financial documents and a hardship letter.
   

3. Once an offer is made, the lender reviews it and either accepts, rejects, or negotiates.
   

4. If approved, the home closes like a normal sale.

Important notes:

• You should negotiate to have any remaining balance forgiven in writing.
  

• Debt forgiven in a short sale may be considered taxable income, so talk to a CPA.
  

• Multiple liens (second mortgages, HOA dues, etc.) must all agree to the sale.
  

• The short sale process normally takes longer than a traditional sale to close - 4 to 6 months being the average.

Other Options to Consider

• Deed in Lieu of Foreclosure: You voluntarily transfer the home back to the lender. Always ask for a written waiver of any remaining debt.
  

• Loan Modification: Adjusts your loan terms (interest rate, length, etc.) to make payments more affordable.
  

• Traditional Sale (with equity): If your home is worth more than you owe, selling outright is often the cleanest solution.

  
  

Why Professional Guidance Matters

Every foreclosure situation is different. Some people have equity, others are deeply underwater. Some have a single mortgage, others have multiple liens. And timelines can be tight. That’s why it’s critical to:

• Work with a local real estate professional who understands distressed sales, market values, and how to negotiate with lenders. Look for real estate agents with the SFR® (Short Sales and Foreclosure Resource) designation.
  

• Consult with an attorney who can advise you on your legal rights, foreclosure timelines, and whether bankruptcy or mediation is right for you.
  

• Talk with a housing counselor or CPA if you’re worried about taxes, credit impact, or negotiating with multiple lienholders.

Bottom Line

If you’re facing foreclosure in Washington, you have more options than you might think - but acting quickly is critical.

Whether it’s loan modification, reinstatement, short sale, deed in lieu, or even a regular sale, the right path depends on your financial situation, your property, and your goals.

Don’t go through this alone. A housing counselor, real estate professional and attorney can help you navigate the process, protect your rights, and move toward the best possible outcome.

If you need any guidance or have any questions, please feel free to reach out. As a licensed Washington State Real Estate Broker with the SFR® designation, I have the training and experience to help you through what can be a challenging and stressful process.

There's no obligation or cost to discuss your situation - I want to be sure that at minimum you get pointed in the right direction in hopes of you being able to save your home.

Thanks for taking the time to read this article.

-Joe Frank

Real Estate Broker |  eXp Realty REALTOR®, PSA, SRES® SFR®, MRP License#  21011387

Disclaimer: This is only a high level overview of the foreclosure process in Washington State and possible options to consider. Foreclosures, Short Sales, Forbearance, Reinstatement, etc rules and regulations can change, as well as vary by city, county, and state. Please always conduct your own due diligence and work closely with a professional that can assist you through the foreclosure process in a manner that best meets your unique situation and property.

You can listen to the podcast for this article below. Please note that the podcast is AI generated from this blog article.