Lenders in Virginia can foreclose on mortgages or deeds of trust if the borrower defaults on payments. Foreclosures can happen through the use of either non-judicial or judicial foreclosure processes.
Judicial Foreclosure in Virginia
In a judicial foreclosure process, the lender files a suit in order to get a court order mandating foreclosure. This is also used when there is no power of Sale clause in the deed of trust or mortgage. Usually, when the court has declared a foreclosure, the subject property is then sold by auction to the highest bidder. The borrower is given eight months after the sale has been conducted to redeem his or her property. The borrower can do this by paying off the sale amount of the property, including a 6% interest. This is the Virginia foreclosure right of redemption using the judicial process.
Non-Judicial Foreclosure in Virginia
On the other hand, in a non-judicial foreclosure, a Power of Sale provision exists in the deed of trust or mortgage. This Power of Sale sees the borrower permitting the sale of his or her property to repay unpaid balances on the loan, in case the borrower defaults on payment(s). In mortgages or deeds of trust wherein there is a Power of Sale, the lender is authorized to sell the subject property, through a trustee. There are certain regulations for this type of foreclosure.
If the mortgage or deed of trust has a Power of Sale provision which specifies the terms of sale, date and time of sale to occur, then these provisions are complied with. However, there are other requirements. Despite the deed of trust has an allowance for advertisement of the foreclosure sale, Virginia law states that these advertisements have to be published for three days. A copy of the advertisement or just a notice of the ad must be sent through mail to the borrower, at least 14 days prior to the schedule of the foreclosure sale.
Advertisement of Foreclosure
The advertisement of the foreclosure sale includes the terms of sale, date and time of the sale. It also provides the trustee’s name, and the contact details of the person responsible for addressing queries about the foreclosure sale. In a foreclosure redemption period, the borrower is given the time to cure the default and halt the foreclosure sale, providing he or she is able to pay off the loan amount plus attorney’s fees and costs. The sale may be scheduled eight days after the publication of the advertisement, but not more than 30 days after the last day of the publication of the advertisement. Anyone except the trustee is permitted to make a bid for the foreclosed property. The trustee may ask the interested bidders to deposit a cash bond amounting to up to 10% of the foreclosure sale price – unless of course the deed trust provides of a bigger amount.
Upon completion of the sale, the proceeds go to, among other things, (i) expenses used up to execute the trust, (ii) discharge all obligations of the borrower towards assessments, levies and taxes, (iii) any remaining debts and obligations of the borrower. Any proceeds left are turned over to the borrower.
Lenders have the right to pursue deficiency judgments, in Virginia, without limits.
Get Legal Advice
If you want to contest a foreclosure proceeding, seek legal advice on how to do this. There are many capable lawyers in the state to help you get your property back. Know your redemption rights now by asking the help of a legal professional.
