In Virginia, lenders
may foreclose on deeds of trusts or mortgages in
default using either a judicial or non-judicial
foreclosure process.
Virginia Foreclosure Laws:
Judicial Foreclosure
The judicial process of foreclosure, which involves
filing a lawsuit to obtain a court order to
foreclose, is used when no power of sale is present
in the mortgage or deed of trust. Generally, after
the court declares a foreclosure, the property will
be auctioned off to the highest bidder.
The borrower has two hundred forty (240) days from
the date of the sale to redeem the property by
paying the amount for which the property was sold,
plus six (6) percent interest.
Virginia
Foreclosure Laws:
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when
a power of sale clause exists in a mortgage or deed
of trust. A "power of sale" clause is the clause in
a deed of trust or mortgage, in which the borrower
pre-authorizes the sale of property to pay off the
balance on a loan in the event of the their default.
In deeds of trust or mortgages where a power of sale
exists, the power given to the lender to sell the
property may be executed by the
lender or their representative, typically referred
to as the trustee. Regulations for this type of
foreclosure process are outlined below in the "Power
of Sale Foreclosure Guidelines".
Virginia
Foreclosure Laws:
Power of Sale Foreclosure Guidelines
- If the deed of trust or mortgage contains a
power of sale clause and specifies the time,
place and terms of sale, then the specified
procedure must be followed. However, additional
requirements must be met, as outlined below in
section one (1).
- Even when the deed of trust makes
allowances for advertising the foreclosure
sale, Virginia Statutes require ads to be
published no less than once a day for three
days, which may be consecutive days. These
requirements are in addition to the
advertising terms stipulated in the deed of
trust. If the deed of trust does not provide
for advertising, then the ad shall be run
once a week for four successive weeks.
However, near a city, an ad on five
different days, which may be consecutive,
will be sufficient.
A copy of the advertisement or a notice with
the same information must be mailed to the
borrower at least 14 days before the
foreclosure sale.
The foreclosure sale ad must include
anything required by the deed of trust and
may include a legal description of the
property, a street address and a tax map
identification or general information about
the property's location. The notice must
include the time, place and terms of sale.
It must give the name of the trustee and the
address and phone number of a person who
will be able to respond to inquiries about
the foreclosure sale.
- Any time before the sale, the borrower
may cure the default and stop the sale by
paying the lien debt, costs and reasonable
attorney's fees.
- The sale, which may be held no earlier
than eight (8) days after the first ad is
published and no more than thirty (30) days
after the last advertisement is published,
is to be made at auction to the highest
bidder. Any person other than 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 in attendance may inspect written
bids. Additionally, the trustee may require
bidders to place a cash deposit of up to ten
(10) percent of the sale price, unless the
dead of trust specifies a higher or lower
amount.
In the event of postponement of sale, which
may be done at the discretion of the
trustee, advertisement of such postponed
sale shall be in the same manner as the
original advertisement of sale.
- Once the sale is complete, the proceeds
will go to: 1) the expenses of executing the
trust; 2) to discharge all taxes, levies,
and assessments, with costs and interest if
they have priority over the lien of the deed
of trust; 3) to discharge in the order of
their priority, if any, the remaining debts
and obligations secured by the deed, and any
liens of record inferior to the deed of
trust under which sale is made; 4) any
remaining proceeds go to the borrower.
Lenders may obtain deficiency judgments, without
limits, in Virginia.
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