Virginia Foreclosure Law Summary
Stop Virginia Foreclosure
- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of Trust, Mortgage
- Timeline: Typically 60 days
- Right of Redemption: Varies
- Deficiency Judgments Allowed: Yes
In Virginia, lenders may foreclose on deeds of trusts or mortgages
in default using either a judicial or non-judicial foreclosure process.
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.
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".
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
Lenders may obtain deficiency judgments, without limits, in Virginia.
More information on Virginia foreclosure laws.