Foreclosure process in Virginia: notices, sale and timeline

Judicial or non-judicial?

Most Virginia mortgages are secured by a deed of trust. After a default, the trustee can declare the whole debt due, take possession and sell the property at auction at the premises or at the front of the circuit court building, or another place in the county or city (§ 55.1-320, paragraph 7). A court order is not a step in this process. A homeowner can still go to circuit court, for example to ask for an accounting or to challenge a sale that did not follow the statute (§§ 55.1-321, 55.1-322 E).

Timeline step by step

On an owner-occupied home, the trustee may not sell without an affidavit from the party that sent the notice, with a copy of the notice, and must give copies to each potential bidder (§ 55.1-320, paragraph 10). The sale cannot go forward unless the trustee has proof the notice was sent (§ 55.1-321 A).

The notice to an owner-occupant must give the date and amount of the last payment received, the amount in arrears and the remaining principal. It must also carry the HUD housing counseling website, the website and phone number of the statewide legal aid center, and wording like this in at least 12-point type: “This is NOT a notice to vacate the premises.” (§ 55.1-321 E, F).

If the ad is not run as required, a court can void the sale on petition (§ 55.1-322 E). Failure to give the notice does not by itself invalidate the sale, and a buyer at the sale has no duty to check it (§ 55.1-321 C).

Where the sale money goes

The trustee pays, in order: the costs of the sale including the trustee’s commission; taxes and assessments with priority; the debt secured by the deed of trust and junior liens by priority; and last, any surplus to the former owner (§ 55.1-324 A). If the sale brings in more than the debt, that surplus belongs to the owner.

Right of redemption

The foreclosure sections I read set no period after the sale in which the former owner can buy the home back. They do not give a statutory right of redemption. Your deed of trust or a lender’s reinstatement offer may allow you to cure the default before the sale, so ask your servicer in writing what the payoff and reinstatement figures are and until when they are good.

Deficiency judgments

The sections I read do not address a lender’s claim for the balance when a sale brings in less than the debt, and they contain no rule that bars it. Whether the lender can sue, how, and for how long depends on the loan documents and on law outside the foreclosure statutes, so ask a Virginia attorney before you assume the debt ends at the auction. See when to hire a Virginia real estate attorney.

Help for homeowners in default

• Loss mitigation rules. Under Regulation X, if a servicer gets a complete application more than 37 days before a sale, it must evaluate you for all options and send a written decision within 30 days (12 CFR 1024.41(c)). It may not make the first foreclosure filing during the 120-day period if you applied before then (1024.41(f)).
• Housing counseling. HUD keeps a locator of approved counselors, and Virginia’s notice must point you to it (§ 55.1-321 E).
• Legal aid. The same notice must give contact details for the statewide legal aid center.
• Money questions. For how a mortgage payoff and closing work, see escrow accounts and closing costs explained.

I could not confirm a current state-run foreclosure-prevention program from an official page today, so check Virginia Housing and your servicer for what is open.