Foreclosure Laws and Procedures in Washington, D.C.

In the District of Columbia, a foreclosure could be judicial or nonjudicial.

Foreclosures in Washington, D.C. can be judicial (through the court) or nonjudicial (an out-of-court process). In the past, most foreclosures in the District of Columbia were nonjudicial. But because the District implemented a foreclosure mediation program to accompany the nonjudicial process, banks now often opt to foreclose in court to avoid mediation.

Because a foreclosure in the District of Columbia could be judicial or nonjudicial, this article covers both processes.

When Foreclosure Can Start

Under federal law, the servicer normally has to wait until the borrower is more than 120 days delinquent on the loan obligation before officially starting a foreclosure. (Learn more about when foreclosure can begin.)

This 120-day period is supposed to give the borrower sufficient time to explore foreclosure avoidance opportunities.

How Judicial Foreclosure Works

Again, judicial foreclosures must go through the court. The foreclosing bank files a lawsuit and serves the borrower (and other defendants) with a copy. If the borrower doesn’t respond, the bank gets a default judgment, which means it automatically wins the case.

By contrast, if the borrower files an answer to the suit that raises a potentially legitimate defense to the foreclosure, the case will likely proceed to trial. If the bank wins, the court will enter a judgment of foreclosure, allow the bank to sell the home, and apply the proceeds to the borrower's debt. (Get details about what happens if you file an answer to the suit.)

How Nonjudicial Foreclosure Works

Nonjudicial foreclosure procedures vary from state to state. Here’s how the process works in Washington, D.C.:

The bank mails a notice of default to the borrower that includes the amount required to reinstate the loan. The bank also has to record the notice of default in the land records, which is considered the first official step in the nonjudicial process. (D.C. Code § 42-815).

Along with the notice of default, the bank has to send the borrower details about the foreclosure mediation program. (D.C. Code § 42-815.02). In mediation, the borrower, bank, and a neutral party (the mediator) meet to discuss whether the borrower qualifies for a foreclosure alternative. To participate in mediation, the borrower has to send in the provided mediation election form no later than 30 days after the form is mailed. While the mediation process is ongoing, the foreclosure stops. (Read more about preventing a foreclosure with mediation.)

Next, if the borrower and bank aren’t able to work out a way to avoid foreclosure, the bank sends a notice of the intention to foreclose to the borrower and a copy to the mayor at least 30 days before the sale. The notice includes the sale date. Notice about the sale is also usually advertised in a newspaper.

At the Foreclosure Sale

At the foreclosure sale, the property is sold to the highest bidder. Most of the time, the bank buys the home at the sale by making a credit bid. (With a credit bid, the bank bids the total amount the borrower owes—or sometimes less—rather than bidding cash.)

If the bank becomes the new owner of the home through a foreclosure sale, the property becomes known as “REO.”

Facing a Deficiency Judgment After Foreclosure

If a borrower’s total mortgage debt is more than the foreclosure sale price, the difference is called a “deficiency.” Some states—and the District of Columbia—allow the bank to seek a personal judgment (called a “deficiency judgment”) against the borrower for this amount.

In the District of Columbia, that bank can file a lawsuit to get a deficiency judgment after a nonjudicial foreclosure. (D.C. Code § 42-816). In a judicial foreclosure, the bank can ask the court for a deficiency judgment as part of that action.

Talk to an Attorney

If have additional questions about how foreclosure works in the District of Columbia, want to fight the foreclosure in court, or have questions about your particular circumstances, consider contacting a local foreclosure attorney.

Homeowners facing foreclosure are also encouraged to contact a HUD-approved housing counselor to discuss various ways to avoid a foreclosure, like by completing a modification, short sale, or deed in lieu of foreclosure.

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