Home Foreclosure in Richland, Washington

Home foreclosure is a distressing reality for many in Richland, Washington, who are facing financial hardships. Combine that with the complexities of bankruptcy laws, and you might find yourself in the heart of Benton County, trying to navigate the legal landscape just to protect your home and financial future.

The tight-knit community you can find in this area is no stranger to the emotional toll that can come with losing a home. Add in the complexities of a bankruptcy case, which could leave you immensely overwhelmed. That’s where our Richland bankruptcy attorneys can step in and help.

Foreclosure is the legal process lenders initiate to reclaim a property when a homeowner fails to make the agreed-upon mortgage payments. This process allows the lender to sell the property to recover the outstanding loan amount. In Washington, nonjudicial foreclosure is the most common type you will come across and is governed by the Deed of Trust Act (RCW 61.24).

The other common type of foreclosure in Benton County is judicial foreclosure, which involves filing a lawsuit in court. While it is less common, it allows the lender to pursue a deficiency judgment to recover the remaining debt if the sale proceeds end up being insufficient.

Specific Washington state laws protect homeowners in Richland:

• Right to Cure Default: Before the foreclosure sale, you can cure your default, according to RCW 61.24.090. You do this by paying any overdue amount there is.
• Notice of Default Requirements: Under RCW 61.24.030, lenders must provide you with at least a 30-day written notice before initiating the foreclosure proceedings.
• Foreclosure Fairness Act: Enacted in 2011, this law requires lenders to offer you mediation services and allow you to negotiate alternatives, such as loan modifications.

When in mediation, a neutral mediator helps explore alternatives to home foreclosure, including loan modifications, forbearance agreements, or repayment plans. The mediation process, outlined under RCW 61.24.163, ensures transparency and fair negotiations between everyone involved.

Active duty military members in Richland have additional protections under the Servicemembers Civil Relief Act (SCRA). These protections include the following:

• Foreclosure Moratorium: Lenders cannot foreclose on a service member's home without a court order while they are on active duty and for one year after active service.
• Interest Rate Cap: Mortgages obtained before military service are capped at a 6% interest rate during active duty under 50 U.S.C. § 3937.

If you are a service member facing foreclosure, you should consult with your local military law office for guidance. The Washington State Department of Veterans Affairs also provides resources and support to help protect your rights.

Bankruptcy provides a legal way to address your debt and can also significantly impact the foreclosure proceedings. It triggers an automatic stay under 11 U.S.C. § 362, which stops all creditor actions, including foreclosure, and provides immediate relief.

• Chapter 7 Bankruptcy: Also known as liquidation bankruptcy, Chapter 7 discharges most unsecured debts. While it may not save a home, Washington’s homestead exemption (RCW 6.13) can protect up to $125,000 of home equity.
• Chapter 13 Bankruptcy: Often referred to as a wage earner’s plan, Chapter 13 allows homeowners to repay mortgage arrears over 3 to 5 years. This can help prevent foreclosure and keep your home.

Facing a foreclosure doesn’t automatically mean you will lose your home. You have these alternatives to consider:

• Loan Modification: As mentioned earlier, you can renegotiate loan terms to make your monthly payments more affordable. This option is often explored during foreclosure mediation.
• Short Sale: This means selling the property for less than the mortgage balance with lender approval, which can help avoid foreclosure.
• Deed in Lieu of Foreclosure: This involves voluntarily transferring property ownership to the lender to satisfy the mortgage debt. While this option avoids the foreclosure process, it may impact your credit.
• Foreclosure Mediation: Mediation can facilitate productive discussions between lenders and homeowners.

A bankruptcy filing can impact your credit scores and remain on your credit report for 7 to 10 years. However, it still offers you a fresh start by eliminating any overwhelming debt you have and providing you with the opportunity to rebuild your financial health. Many have found they can even improve their credit by consistently managing their finances the right way after a bankruptcy.

Nonjudicial foreclosures typically take a minimum of 120 days from the Notice of Default, as governed by RCW 61.24.040. Judicial foreclosures can take longer due to court processes.

In Chapter 7, secured debts like mortgages remain tied to the property. If you’re current on payments, you can retain your home by reaffirming the debt. However, failure to pay can still result in home foreclosure.

If you receive a Notice of Default, you must act quickly. Contact a housing counselor or Richland attorney, or request foreclosure mediation under the Foreclosure Fairness Act to explore all of your available options.

You are not required to have a Richland attorney to handle your foreclosure case. However, it can prove to be beneficial because an experienced attorney can explain your rights and help you understand the process.

A foreclosure can remain on your credit report for up to 7 years. However, it can be removed earlier if there is an error in how it was reported or if you successfully dispute the foreclosure with the credit bureaus.

In a foreclosure, the second mortgage is typically paid after the first mortgage amount is satisfied, but only if there are remaining proceeds from the sale. If the foreclosure doesn’t cover the full balance of the first mortgage, then you may find that the second mortgage isn’t paid at all.

In this case, the second mortgage lender will probably pursue you for the remaining balance that is owed unless the debt was discharged through bankruptcy.

During a foreclosure, any unpaid property taxes or HOA dues can complicate the process. If the property taxes are unpaid, they will typically become a lien on the property and can take priority over the mortgage amount. This means that if the home is sold at a foreclosure auction, the proceeds will go toward the tax debt first.

Any unpaid HOA fees can also lead to a property lien. In some cases, the HOA can collect the unpaid dues from the foreclosure sale proceeds, but this is usually secondary to the primary mortgage lender.

If you receive a foreclosure scam letter, you must act quickly but also be cautious. Never provide personal information like your Social Security number, bank account information, or mortgage details.

Contact your lender directly using the contact information on your official mortgage statement, not the number provided in the letter. Also, if it sounds too good to be true, then it probably is. Contact the Federal Trade Commission (FTC), Consumer Financial Protection Bureau (CFPB), or Washington Attorney General’s office to report the scam.

Yes, you can buy another home after a foreclosure, but it might be a more challenging process this time around. It can take several years before you are eligible for a new mortgage, and you will more than likely have to face higher interest rates.

Renting your home out might be able to provide you with some short-term relief, but it won’t stop the foreclosure process if you fail to make your mortgage payments. However, some lenders might approve a lease option as a part of a foreclosure prevention plan.

Filing for bankruptcy is a complicated process that requires a firm knowledge of the laws. An experienced Richland bankruptcy attorney can guide you through it, protect assets like your home, and ensure your case is handled correctly. They can also help you choose the best bankruptcy chapter for your particular situation.

Don’t face home foreclosure alone—partner with a knowledgeable attorney in Richland to achieve the best possible outcome.