If you’ve fallen behind on your mortgage, you’re not alone, and you’re not out of options. A job loss, a medical bill, a divorce or a business that slowed down can put almost anyone behind. The single most important thing you can do is act early. The longer you wait, the fewer choices you have.
This guide explains how foreclosure generally works in Washington and Idaho, the options to look at first, and how selling can protect your equity and credit if keeping the house isn’t possible.
A quick note: we’re home buyers, not attorneys or financial advisors. Foreclosure rules and programs change, so confirm the details with a housing counselor, a real estate attorney or your lender.
Why waiting is the biggest mistake
When people fall behind, it’s natural to feel overwhelmed and stop opening the mail or answering the phone. Unfortunately, the problem doesn’t go away. Late fees and interest keep adding up, deadlines pass, and options that were available in month two may be gone by month six.
Federal rules generally give homeowners some time after they first fall behind before a lender can start the formal foreclosure process. Use that time. It’s your best window to work something out.
How foreclosure generally works here
Most home loans in Washington and Idaho use a deed of trust, and most foreclosures in both states happen outside of court through a trustee’s sale. In broad strokes:
- You miss payments and the lender sends late notices.
- The lender or trustee sends formal notices, such as a notice of default.
- A notice of trustee’s sale sets an auction date.
- If the debt isn’t resolved, the house is sold at auction.
Each step has required notices and waiting periods, and the exact timelines differ between Washington and Idaho. Read every notice carefully and note every date.
Washington’s foreclosure mediation program
Washington has a foreclosure mediation program for owner-occupied homes. It can bring you and your lender together with a neutral mediator to look for alternatives to foreclosure. You generally need to be referred by an approved housing counselor or attorney, and timing matters, so contact a counselor as soon as you receive a notice.
In Idaho
Idaho’s process and timelines are different from Washington’s. Reaching out to your lender and a housing counselor early is just as important there, and an Idaho real estate attorney can explain where you stand.
Options to look at first
Call your lender
It feels scary, but calling shows you’re serious about solving the problem. Ask about:
- Repayment plans to catch up over time
- Forbearance, a temporary pause or reduction in payments
- Loan modification, which changes the loan’s terms to lower the payment
Get everything in writing, and keep notes of every call.
Talk to a HUD-approved housing counselor
These counselors are free or low-cost and can help you understand your options and talk with your lender. You can find a housing counselor through the CFPB. If you have an FHA or VA loan, those programs have their own options for borrowers in trouble.
Refinance or borrow
If you have equity and decent credit, refinancing or a private loan might cover the past-due amount. Be careful: some lenders who target homeowners in foreclosure charge very high interest and fees.
Bankruptcy
Filing for bankruptcy can temporarily stop a foreclosure sale, and in some cases lets you catch up over time. It also has serious long-term effects. Talk to a bankruptcy attorney before deciding.
Get ahead of other debt
If credit cards and other bills are what’s squeezing the mortgage, a nonprofit credit counselor can help you build a plan. Paying more than the minimum on high-interest debt and cutting expenses can free up money for the house payment.
When keeping the house isn’t realistic
Selling before the auction
If you have equity in the house, selling before the foreclosure sale is often the best way to protect it. The sale pays off the loan, the past-due amount and fees, and you keep what’s left. If the house goes to auction, you can lose that equity, and a foreclosure can stay on your credit report for years.
Timing is the challenge. A traditional listing needs time to prepare, find a buyer and close with a lender. If your auction date is close, that may not be enough time.
Short sale
If you owe more than the house is worth, a short sale lets you sell for less than the loan balance with your lender’s approval. It usually hurts your credit less than a foreclosure, but it takes time, the lender has to agree, and you may face a remaining balance or tax consequences. Ask your lender, an attorney and a CPA how it would work for you.
Foreclosure vs. short sale vs. selling with equity
| Foreclosure | Short sale | Selling with equity | |
|---|---|---|---|
| Who controls the sale | The lender | You, with lender approval | You |
| Your equity | Often lost | None to keep | You keep what’s left after payoff |
| Credit impact | Most severe | Serious, usually less than foreclosure | Late payments already reported, but no foreclosure |
| Timeline | Set by the trustee | Often slow | Can be fast |
How Backyard Home Buyers can help
If you decide to sell, we can move on your timeline:
- You’ll usually have a fair cash offer within 24 hours.
- We can close in as little as 7 days, which can matter when an auction date is coming.
- We buy as-is, so you don’t spend money you don’t have on repairs.
- No fees or commissions, and we pay the closing costs.
- Rent-backs are available if you need a little time to move after closing.
We’re a local, family-owned company. Both owners were born and raised in the Inland Northwest, and since 2019 we’ve done over 500 deals. We’ll give you an honest answer, even if it’s that working things out with your lender is your best move.
Also behind on property taxes? See our guide on catching up on property taxes.
We buy homes in Spokane, Coeur d’Alene and the Tri-Cities. See how it works, or call (509) 461-9079 today. The sooner you call, the more options you’ll have.