Virginia Foreclosure Law Summary 
- 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.
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.
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".
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.
More information
on Virginia foreclosure laws.
