How Foreclosure Works in District of Columbia

Both. A deed of trust or mortgage with a power of sale can be foreclosed by a trustee's sale outside court, once the required notices are given and a mediation certificate is obtained. A lender can also ask the court to foreclose, and the court may order the property sold and the proceeds applied to the debt.

For a residential mortgage (1 to 4 single-family dwellings, including condos and co-ops), before a power-of-sale foreclosure the lender must (1) send the borrower and record owner a notice of default by certified mail (return receipt requested) and first-class mail, with a copy to the Mayor; (2) obtain a mediation certificate; and (3) send a separate notice of intention to foreclose by certified and first-class mail, with a copy delivered to the Mayor at least 30 days before the sale date. The notice of default must list the amount needed to cure and reinstate, and come with contact information for a HUD-approved housing counseling agency, loss-mitigation options and a mediation election form. The mediation certificate and the notice of intention to foreclose must be recorded in the land records.

A power-of-sale foreclosure cannot happen until a mediation certificate has been obtained, and the notice of intention to foreclose must reach the Mayor at least 30 days before the sale; the 30 days run from the date the Mayor receives the notice. The borrower has 30 days from the mailing of the mediation forms to return the mediation election form.

Yes. After a notice of intention to foreclose a residential mortgage, the borrower (or someone on the borrower's behalf) may cure the default up to 5 business days before bidding begins at the trustee's or judicial sale, but only once in any 2 consecutive calendar years. To cure, the borrower must pay the past-due amounts (not accelerated amounts) and reasonable late charges in cash, cashier's check or certified check, perform any other obligations, and pay the lender's foreclosure expenses such as advertising, trustee fees and reasonable attorney's fees. A cure puts the borrower back in the same position as if the default had not occurred.