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Learning Center | District of Columbia Foreclosure Laws

Questions
How are deeds of trust or mortgage liens treated in District of Columbia?
How are District of Columbia mortgages foreclosed?
How long does it take to foreclose a property in District of Columbia?
Is there a right of redemption in District of Columbia?
Are deficiency judgments permitted in District of Columbia?
What statutes govern District of Columbia foreclosures?

Answers

How aredeeds of trust or mortgage liens treated in District of Columbia?

District of Columbia primarily operates as atitle theory state where the property title remains in trust until payment in full occurs for the underlying loan. Foreclosure is anon-judicial remedy under this theory. The document that secures the title is usually called adeed of trust.

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How are District of Columbia mortgages foreclosed?

The primary method of foreclosure in District of Columbia involves what is known asnon-judicial foreclosure. This type of foreclosure does not involve court action but requires notice commonly callednotice of sale. When thedeed of trust is initially signed, it will usually contain a provision called apower of sale clause, which upon default allows atrustee to sell the property in order to satisfy the underlying defaulted loan. Because this is a non-judicial remedy, there are very stringent notice requirements and the legal documents are required to contain thepower of sale language in order to use this type of foreclosure method.


Power of Sale Notice Requirements:

  1. Prior to initiating a foreclosure sale, the lender must serve by certified mail anotice of sale on borrower at the borrower's last known address.
  2. Notice of sale as described above must contain certain information including a description of the default. The notice must be sent to the Mayor of the District of Columbia at least thirty (30) days prior to the date of the sale, with the 30 day time period running from the date of receipt.
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How long does it take to foreclose a property in District of Columbia?

Depending on the timing of the various required notices, it usually takes approximately 60 days to effectuate an uncontestednon-judicial foreclosure. This process may be delayed if the borrower contests the action in court, seeks delays and postponements of sales, or files forbankruptcy. Much of the ongoing delays in foreclosure sales relate to the proper service of parties in interest, governmental agencies and junior lienholders. Difficulty in finding or serving these parties delays the process.

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Is there a right of redemption in District of Columbia?

District of Columbia has no post-salestatutory right of redemption fornon-judicial foreclosures.

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Are deficiency judgments permitted in District of Columbia?

Generally, yes. Adeficiency judgment may be obtained using the non-judicial foreclosure process when a property in foreclosure is sold at a public sale for less than the loan amount that the underlying mortgage or deed of trust secures.

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What statutes govern District of Columbia foreclosures?

The laws that govern the foreclosure of Deeds of Trust are found in District of Columbia Code, a recent statute called the Mortgage Foreclosure Procedures Reform Act, was passed in 2002 and deals with predatory lending. To view these statutes on the Web, you can visit:

http://198.187.128.12/dc/lpext.dll?f=templates&fn=fs-main.htm&2.0

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