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Ways to Avoid a Foreclosure

Foreclosure Mediation

Facing foreclosure is one of the most difficult things you’ll ever have to do. Whether you’re dealing with the prospect of losing your family home or your business property, there are likely no limits to the lengths you’ll go to in order to keep it in your possession.

Luckily, you have options in this regard. There are many ways to avoid a foreclosure in Washington if you know how to approach the situation properly.


Considering mediation should be your first priority when facing a potential foreclosure in the state of Washington. Per Section 61.24.163 of the Revised Code of Washington (RCW), lenders must participate in a state-sanctioned mediation program with borrowers facing foreclosure, if this is requested by the borrower in question.

You can request mediation through your foreclosure attorney or housing counselor once you’ve received a Notice of Default from your bank. The process must begin within 70 days once the state Department of Commerce has nominated a mediator to work with you. Though it’s not required, it’s generally a good idea to hire a lawyer to represent you during foreclosure mediation, as your bank will have members of its in-house legal team there to present its case.

There are a range of potential outcomes from a mediation procedure; the result in your case will depend on your circumstances. Your lender may agree to one or more of the solutions we discuss in the remainder of this blog post.


Refinancing allows you to replace your existing mortgage with a new loan so that you can benefit from a lower interest rate or more favorable loan terms. Your bank may or may not be amenable to the idea of refinancing; if you secure a lower interest rate, your mortgage will be worth less to the institution. However, if the change makes you less likely to default, it could save the bank the hassle and expense of foreclosing on your property.

If you have other debts that are causing you financial hardship, such as from student loans or car loans, you may be able to roll these into your refinanced mortgage as well. This way, you could pay these off more cheaply and also benefit from a more convenient repayment schedule.

Remember, banks are rarely enthusiastic about the prospect of foreclosure — it’s a highly inefficient means of recouping their investment. If you can present your lender with a less labor-intensive, more cost-effective alternative, it will likely accept.

Modification of the Mortgage Loan Terms

This option treads similar ground to refinancing, as it involves more favorable repayment terms and potentially a lower interest rate. The chief difference is a technical one:  instead of taking out a brand new loan, you’ll be changing the requirements on the old one.

Short Sale

A short sale is a process whereby you sell your home for less than the remaining balance on your mortgage, and the lender agrees to accept the proceeds as full settlement of the debt.

This may be a viable option for you if your property’s market value has fallen below the outstanding loan amount. While a short sale can negatively impact your credit score, it’s often less damaging than a foreclosure.

Forbearance Agreement

A forbearance agreement is an arrangement whereby your lender agrees to temporarily reduce or suspend your mortgage payments. If your financial difficulties are temporary in nature (if they’re due to an injury or a job layoff, for example), this could be a viable option for you. However, it’s important to note that you will likely need to catch up on any missed payments when your forbearance period ends.

Forbearance hit the headlines repeatedly during the COVID-19 pandemic, as the federal government introduced mandatory forbearance for distressed borrowers with the CARES Act. The Washington State Department of Financial Institutions also introduced similar measures at the state government level. However, most of these government protections, at both the state and federal levels, have now expired.

Deed in Lieu of Foreclosure

A deed in lieu of foreclosure is a legal process that will allow you to voluntarily transfer ownership of your property to your lender in exchange for the settlement of your mortgage. You’ll still have to vacate your property, but you won’t technically have lost it because of forbearance, and this yields certain advantages. Most notably, your credit rating may not suffer as much.

Litigation Defense

If you don’t succeed in finding a solution to your foreclosure woes through mediation, it may be possible to do so in court.

Ordinarily, if an agreement is not reached during the mediation process, the bank has the right to proceed with foreclosure. However, homeowners, lenders, and trustees all have a duty to act in good faith when it comes to foreclosure proceedings. If you feel your bank has not discharged this duty and is repossessing your home illegally, you can file a lawsuit to stop it.

The mortgage attorneys at Dickson Frohlich Phillips Burgess have decades of combined experience when it comes to helping distressed homeowners navigate challenging situations like yours. If you visit our testimonials page, you’ll see a number of our past clients praising our professionalism, dedication, and attention to detail. We’ll leave no stone unturned when it comes to protecting your rights.

It’s important to note that filing a lawsuit to prevent foreclosure will not be the right move for everyone. If we conclude that you’d be better off accepting foreclosure than continuing the fight in court, we’ll tell you as much.

Avoiding a Foreclosure With Expert Legal Help

It’s important to remember that ignoring an outstanding foreclosure action will almost certainly result in a default judgment against you, which could lead to the sale of your home at auction. Although foreclosure is a daunting prospect, you need to tackle it head-on, as quickly as you can.

Your first step should be to discuss your situation with an experienced real estate lawyer. At Dickson Frohlich Phillips Burgess, our experienced attorneys are ready to help you explore all your options.

Contact us today to start the process. You can reach us over the phone at (206) 621-1110 (Seattle) or (253) 572-1000 (Tacoma), or via our online contact form.