According to foreclosure law, the District of Columbia foreclosure process works at the theory of title while treating mortgage liens or deeds of trust in which the title of the property remains as it is until the underlying loan is fully paid. This theory considers foreclosure a non-judicial remedy. The deed of trust is a document that saves the title of the property.
Non-judicial foreclosure is the commonly used District of Columbia foreclosure process as instead of involving court action it usually needs a sale notice. A trust deed includes a provision of clause of power of sale, when it is signed initially, which empowers the trustee to recover its pending unpaid loan by selling the property. But while using this type of foreclosure process, it requires very strict notice and its legal documents should contain the language of power of sale as it is a non-judicial solution of this problem.
The lender has to serve a notice for sale through certified mail on the borrower at his/her latest address available in records, before starting the process of foreclosure sale.
The notice of sale should include information describing the detail of default. This notice has to be sent at least 30 days before the sale date to the District of Columbia Mayor. This time gap of 30 days should run from the receipt date.
The laws available in the District of Columbia Code are used to administer the foreclosure of Deeds of Trust. The latest statute passed in 2002 is known as the Mortgage Foreclosure Procedures Reform Act to deal with the predatory lending issues.
For effective non-judicial foreclosure of property may usually take up to 60 days in the District of Columbia, depending upon the time required for severing different types of notices. But in case the borrower contests a court case, files bankruptcy or applies for postponement and delay of sale of his foreclosure property then this process can be delayed. Many times delay in foreclosure sales can be extended depending upon proper service of the interested parties, junior lien holders and governmental agencies or due to difficulty in finding these parties to serve notices etc. but once the process is completed and the property is sold then the borrower has no statutory right for the recovery of his property. This highlights the District of Columbia foreclosure process.
1.Selling the foreclosure property
In order to avoid foreclosure, District of Columbia foreclosure process allows the borrowers either to modify their loan as per their capability to pay back the loan or sell it in open market through a realtor or directly to a real estate investor. While deciding to sell your mortgaged property to avoid foreclosure it is important to consider certain things like the amount of your loan is much higher than the expected sale price of your property etc. This type of sale is commonly known as Short Sale of selling it short.
2.Using short sale for selling your property
If the current value of your mortgaged property is less than the total amount of loan you owe then, according to District of Columbia foreclosure process, Selling it Short is the only option for you to sell it. In such property selling process the lender should be ready to accept the price of sale of your home even if it is less than the money actually owed by you. In this way, you can get rid of your mortgage as in many cases you need not pay back the balance amount of loan owed by you and all of your debts are either re-negotiated or settled down.
But many lenders do not agree to waive off the balance amount of loan owed by you. In such cases both the parties will have to make a commitment before finalising the deal of selling your property for short sale. It will help you out from legal complications later on.
Moreover, before completing the deal of selling your home for short you should arrange for your housing as it will affect your credit score negatively and will make it difficult to get finance for buying or renting another house or apartment. But you can quality for the allocation of generous cash incentives as a help from the state government due to your short sale. You can get relocation help up to $10,000 from HAFA or Home Affordable Foreclosure Alternatives after the closure of short sale, if you fulfill its requirements.
3.Choosing a Real Estate Investor to Sell Your Home
If you do not want to sell your mortgaged home through Short Sale then the only option for you is to find a real estate investor to sell your home. In most cases, you can avoid foreclosure by selling your house within few weeks to a real estate investor against cash money instead of financing through bank which may require long underwriting procedures.
The best thing about selling your mortgaged home to real estate investor is that you can get rid of the hassle of renovating your house to sell it in the open market. You only have to find an investor and negotiate with him to get the fair price of your property and get rid of the hassles of mortgage as soon as possible. Moreover you will neither have to pay any realtor commission nor any closing cost by selling your home to an investor.
In fact, time is the important factor to be taken care of while selling the house to a real estate investor. You can close the deal with the investor within the time period of foreclosure otherwise foreclosure process can take much time to complete. Your lender will send you several notices for delayed payment before taking final action.
So if you have decided to get rid of the hassles of foreclosure then the best thing you should do is to know the District of Columbia foreclosure process and select your option to avoid foreclosure.