Virginia Foreclosure Law
The Virginia State Foreclosure Law dictates that lenders may avail of the Judicial and Non-Judicial Foreclosure processes to foreclose deeds of trusts or mortgages in default. The typical time of process last about 60 days and the deeds of trust and mortgages are the security instruments used. In Virginia, the Right of Redemption varies and Deficiency Judgments are allowed.
In Judicial Foreclosure, petitioners must file a lawsuit for an order to foreclose. Generally, when the court declares a foreclosure, the property will be auctioned off and awarded to the highest bidder. Non-Judicial Foreclosure is used when a power of sale clause exists in the security instruments. “Power of Sale” is the process wherein the borrower agrees to sell the property to settle the remaining balance from a loan in case of default. This process doesn’t need any court order to auction off the property. The lender or their representative, commonly referred to as the “trustee,” may execute the “power of sale.” The borrower has 240 days from the date of sale to redeem the property by paying the selling price plus 6% interest.
Power of Sale Guideline:
Should the security instruments contain a power of sale clause, the terms therein should be followed. However, additional requirements should be met, as stated below:
- The Notice of Sale must be published no less than once a day for 3 days. This requirement is an addition to the advertising terms stipulated in the deed of trust. If the deed does not provide for advertising, then the ad should be published once a week for 4 consecutive weeks. However, near a city, an ad on 5 different days, which may be consecutive, will be sufficient.
A copy of the notice, as advertised, must be served to the borrower at least 14 days before the foreclosure sale.
The notice must include the time, place, and terms of sale in addition to the legal description of the property, address, tax map identification, and all other required by the deed of trust. It must also give the name of the trustee and the address and phone number of a person who would be able to answer any inquiries.
- The borrower may cure the default and stop the foreclosure sale by paying the lien debt, expenses, and legal fees.
- The sale, which may be held between the 8th day after the 1st publication of the notice and the 30th day after the last publication, must be conducted through a public auction. Any person except the trustee may bid at the foreclosure sale, including a person who has submitted a written one-price bid. Written one-price bids may be made and shall be received by the trustee for entry by announcement of the trustee at the sale. Any bidder present may inspect written bids. The trustee may require bidders to place a 10% cash deposit of the sale price, unless otherwise specified in the deed of trust.
In case of postponement of the sale, an advertisement for such must be made in the same manner as that of the notice of sale.
- The proceeds of the sale will go to:
- The expenses of executing the trust.
- Taxes, levies, and assessments, with expenses and interest if they have priority over the lien of the deed.
- Any remaining debts and obligations secured by the deed and any liens of record inferior to the deed of trust.
Any remaining amount goes to the borrower.
Richmond Office : Local HUD
600 East Broad Street, Third Floor
Richmond, VA 23219
Phone: (800) 842-2610
Fax: (804) 822-4984
TTY: (804) 771-2038
Virginia Foreclosure help
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