Virginia foreclosure law permits both judicial and non-judicial foreclosures. Non-judicial foreclosures are more popular in Virginia. A typical Virginia foreclosure takes less than two months.
A new law in Virginia allows homeowners affected by COVID-19 to get a 30-day stay of foreclosure. Borrowers can request the delay by providing written proof that they are not currently receiving wages or payments because of the coronavirus emergency. The borrower must provide this to the court and/or the lender, depending on the situation The right to get this 30-day foreclosure stay will expire 90 days following the end of the state of emergency as declared by the governor in response to the COVID-19 pandemic.
Also, Virginia Governor Ralph Northam allocated $50 million from the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funds to help Virginia citizens avoid losing their homes during the COVID-19 crisis. Depending on the availability of the funds the program may provide money for mortgage payments to eligible households.
The in-court, (judicial) Virginia foreclosure process is rarely used. However, begins when the lender files a court document called A Lis Pendens starting the foreclosure process. A court order will be issued which specifies the terms and conditions of the sale of the borrower is found in default. After the court declares a foreclosure, the property is auctioned, according to the terms set by the court, usually by a court appointed trustee.
More often, Virginia foreclosure used a non-judicial form when the mortgage or deed of trust allows the lender to sell the property without going through the courts through a clause called “Power of sale” written into the mortgage. The lender initiates this type of foreclosure by simply scheduling a foreclosure sale. The lender is required to send a Notice of Default, (NOD), to the borrower which explains the default and gives them 30 days to pay off the default and prevent foreclosure.
Notice of Sale & Auction
Once a lender has scheduled the foreclosure sale, there are several notifications that must be made. The lender must properly advertise the sale and notify the parties involved. In Virginia, the Notice of Sale, (NOS), publication dates vary based on the requirements of the deed of trust and/or state statute.
The lender must publish the NOS in a local newspaper, however there are certain requirements here as well. The newspaper where the NOS published must be approved by court order certifying it has sufficient circulation within the county or city where the property is located. The notice is required to include a legal description of the property, the terms of the sale, and the location, date, and time of the sale. Borrowers must receive a minimum of14 days notice prior to the foreclosure sale.
The trustee typically conducts the sale at the local county courthouse between 9 a.m. and 5 p.m. during a regular business day. The trustee announces the opening bid at the sale which is almost always the amount in default. The property is awarded to the highest bidder. If no one bids, the lender will win the bidding with their opening bid. The trustee then completes the necessary documents to transfer ownership of the property to the highest bidder. A sale may not be postponed, but it may be canceled, in which case the trustee would need to start the foreclosure process from the beginning.
Once the sale is final the borrower cannot redeem the property.
A lender may pursue a borrower for a deficiency judgment in Virginia Foreclosure.