While judicial foreclosures, which take place in court, are possible in Washington, D.C., most foreclosures are nonjudicial and take place out of court -- and they move quickly. (A nonjudicial foreclosure in the District of Columbia typically takes only around two months to complete.)
If you are facing a foreclosure in the District of Columbia, read on to find out how you’ll learn about the sale, if you can redeem (repurchase) the home after the sale, whether you could be liable for a deficiency after the foreclosure, and more. This article contains a summary of some of the key features of Washington, D.C.’s foreclosure law along with citations to the statutes so you can read the law yourself.
The citations to the District of Columbia foreclosure statutes are District of Columbia Code Sections 42-815 through 42-816.
You can find a link to the District of Columbia Code on the Council of the District of Columbia’s website at www.dccouncil.washington.dc.us. If you need help finding the statutes, see Finding Your State’s Foreclosure Laws.
We’ve summarized important parts of the District of Columbia’s foreclosure laws below. You can find more detailed articles on various aspects of District of Columbia foreclosure law in Nolo’s Washington D.C. Foreclosure Law Center.
Foreclosures in the District of Columbia can be nonjudicial (out of court) or judicial (which means the lender files a lawsuit to foreclose). Since the majority of foreclosures in the District of Columbia are nonjudicial, this article focuses on that process.
In the District of Columbia, the foreclosing party must give the following notices.
Notice of default. The foreclosing party must mail a notice of default to the borrower that includes the amount required to cure the default and reinstate the loan. D.C. Code § 42-815.
Mediation notice. Along with the notice of default, the foreclosing party must include information on the availability of mediation and housing counseling services, including an application for loss mitigation programs (alternatives to foreclosure) and a mediation election form with envelopes addressed to the lender and the mediation administrator. The borrower must return the mediation election form to the mediation administrator and the lender, in the envelopes provided, no later than 30 days from the date of the mailing of the form to participate in mediation. D.C. Code § 42-815.02. (Learn more about foreclosure mediation in Nolo’s article Washington DC's Foreclosure Mediation Program.)
Notice of intention to foreclose. If the borrower does not elect mediation (or participates in mediation but does not work out an agreement with the foreclosing party), the mediation administrator will issue a mediation certificate. (The power of sale cannot be exercised until the mediation administrator has issued a mediation certificate.) The foreclosing party must then issue and send a notice of intention to foreclose (which includes sale information) to the borrower and a copy to the Mayor at least 30 days before the sale. D.C. Code § 42-815. The 30-day period starts to run on the date the Mayor receives the notice. D.C. Code § 42-815.
Notice of the sale. The terms regarding notice of the sale are usually set out in the mortgage or deed of trust. In most cases, the deed of trust requires the trustee (the third party that handles nonjudicial foreclosures) to publicly advertise the sale. The trustee usually accomplishes this by publishing notice of the sale in the newspaper. (Learn more about the difference between a mortgage and a deed of trust.)
“Reinstating” is when you catch up on the missed payments (plus fees and costs) in order to stop a foreclosure. (Learn more about reinstatement to avoid foreclosure.)
Borrowers in the District of Columbia get up until five business days before the sale to cure the default and reinstate the loan. The borrower cannot reinstate more than once in any two consecutive calendar years. D.C. Code § 42-815.01.
Some states allow the borrower to redeem (repurchase) the home within a certain period of time after the foreclosure. In Washington, D.C, the borrower does not get the right to redeem the home after the foreclosure sale. (For details see Nolo’s article If I lose my home to foreclosure in D.C., can I get it back?)
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a “deficiency.” Some states allow the lender to seek a personal judgment (called a “deficiency judgment”) against the borrower for this amount, while other states prohibit deficiency judgments with what are called anti-deficiency laws.
In Washington, D.C., the foreclosing party may sue the borrower for a deficiency judgment after a nonjudicial foreclosure. D.C. Code § 42-816. (In a judicial foreclosure, the lender may ask the court for a deficiency judgment as part of the foreclosure lawsuit.) (For a summary of the deficiency law in the District of Columbia, see District of Columbia Laws on Post-Foreclosure Deficiency.)
If the foreclosed homeowners don't leave the premises after a foreclosure in the District of Columbia, the purchaser who bought the home at the foreclosure sale may file a lawsuit to evict them from the property.