How foreclosure works in Washington, D.C.

The notices you will receive in Washington, D.C., in order

1. Notice of Default on Residential Mortgage (Form FM-1)

   Out-of-court route: mailed by the lender by certified and first-class mail before any sale can be scheduled

   It shows what the lender says you owe and the amount to catch up. It comes with a Loss Mitigation Application (Form FM-1LM), a Mediation Election Form (Form FM-2) and addressed envelopes. You have 30 days from the mailing date to send them back, or you lose your right to mediation.

   D.C. Code §§ 42-815(b), 42-815.02(b), (d)(1)

2. Letters from the DISB Mediation Administrator

   Within 7 days of the Notice of Default, and a second notice within 20 days

   DISB writes to tell you that you are eligible for mediation, to get housing counseling, and to return your forms and the fee on time. If you never got the forms from your lender, call the Mediation Administrator and the lender right away.

   D.C. Code § 42-815.02(c)

3. Mediation certificate

   Issued by DISB after mediation ends, or 45 to 60 days after the Notice of Default if you do not elect mediation

   The lender cannot use its power of sale until DISB issues this certificate, and the final certificate must be recorded in the land records. If mediation fails, DISB first issues a preliminary certificate, and you have 30 days to appeal to D.C. Superior Court.

   D.C. Code §§ 42-815(d), 42-815.02(d)(3), (e)(3)

4. Notice of Intention to Foreclose on a Residential Mortgage (Form FM-5)

   Mailed to you, with a copy to the Recorder of Deeds at least 30 days before the sale

   This notice gives the date and time of the auction. The 30 days count from the day the Recorder of Deeds receives its copy. A sale is void if this notice is filed without a final recorded mediation certificate.

   D.C. Code §§ 42-815(c), 42-815.02(h-1)

5. Summons, Complaint and Initial Order

   Court route: served on you when the lender files in D.C. Superior Court

   The Initial Order lists your first court date. The D.C. Courts say you must file a response within 21 days, or the lender can ask for a default judgment. Go to every hearing, which may be held remotely.

6. Judge's decision ordering a sale

   Court route: after hearings, mediation or a default

   On this route only a judge can order the home sold. The court can also enter a judgment against you for any amount the sale does not cover.

   D.C. Code § 42-816

The legal steps in Washington, D.C.

1. Missed payments and the 120-day wait

   Under federal rules your servicer generally cannot start a foreclosure until you are more than 120 days behind. Use this time to send your servicer a request for mortgage assistance and to call the DC Foreclosure Prevention Hotline at (202) 265-2255 for a free housing counselor.

   12 C.F.R. § 1024.41(f)

2. The lender starts one of two routes

   If the lender goes to court, you are served with a Summons, a Complaint and an Initial Order that lists your first court date. If the lender uses the out-of-court route, you get a Notice of Default by certified and first-class mail, with a loss mitigation application and a Mediation Election Form.

   D.C. Code § 42-815(b)

3. Respond on time

   In a court case, the D.C. Courts say you must file a response within 21 days, or the lender can ask for a default judgment. On the out-of-court route, you must return the Mediation Election Form and fee to DISB, and the loss mitigation application to the lender, within 30 days after the Notice of Default was mailed, or you lose the right to mediation.

   D.C. Code § 42-815.02(d)(1)

4. Mediation

   In court, the judge can put your case on an early mediation schedule with a court mediator. Out of court, DISB schedules a mediation session to start no later than 90 days after the Notice of Default was mailed. In both, you will need to complete a loss mitigation application with your financial papers.

   D.C. Code § 42-815.02(d)(2)

5. Judgment or mediation certificate, then notice of sale

   In court, the judge decides whether to order a foreclosure sale. Out of court, the lender needs a mediation certificate from DISB and must then send you a Notice of Intention to Foreclose, with a copy to the Recorder of Deeds at least 30 days before the sale.

   D.C. Code §§ 42-815(c), 42-815.02(d)(3), 42-816

6. Last chance to cure, then the auction

   On the out-of-court route, you can stop the sale of a residential mortgage by paying all missed payments, late charges and the lender's foreclosure costs up to 5 business days before the bidding starts, once in any 2 calendar years in a row. In a court case, the judge's process controls, and the D.C. Courts say some borrowers can stop the case by paying all missed payments and fees. If you do not cure, the home is sold at auction.

   D.C. Code §§ 42-815.01, 42-815.04

7. After the sale

   The buyer cannot send you a notice to quit, file a case to remove you, or charge you rent until a deed to the buyer is recorded at the Recorder of Deeds. Legal Aid DC says the new owner must then send a 30-day notice and file an eviction case before you can be removed.

   D.C. Code § 42-815.05

Common questions in Washington, D.C.