Under the Virginia foreclosure laws lenders are permitted to take recourse to Judicial and Non-Judicial Foreclosure processes when they need legal intervention to decide the merits of deeds of trusts or mortgages in default. Processes of this kind in Virginia can take up to two months to reach conclusion. The important documents that are treated as evidence of the agreement between the lender and the borrower are the deeds of trust and mortgage documents. These documents are referred to as security instruments. A court in Virginia may or may not award the Right of Redemption to a borrower. However, several instances of Deficiency Judgments have been awarded by courts in Virginia while deciding real estate foreclosure cases.
When a lender opts for judicial foreclosures he must file a lawsuit to receive an order to foreclose. The general procedure after the declaration of a foreclosure by a court is the auction of the distressed property and the awarding of the sale proceeds to the highest bidder. The process of Non-Judicial Foreclosure is adopted when a power of sale clause exists in the agreement between the lender and the borrower. The "Power of Sale" clause refers to the borrower's agreement to sell the distressed property to settle his dues to the lender. There is no court authorization required for holding an auction through this process. The foreclosure auction is executed by the lender or his duly appointed representative, commonly referred to as the trustee. The borrower is awarded a period of eight months from the date of sale to pay a stipulated price and redeem the foreclosed property.
Whatever terms and conditions are spelt out in the security instruments must be followed stringently. The terms and conditions generally refer to the publication of a Notice of Sale which must be published at least once a day for three days. The terms of advertising the sale must also be adhered to as stipulated. In case there are no clear directives then the advertisement regarding the foreclosure auction should be published once a week for four continuous weeks in leading local county newspapers in Virginia. A few different rules apply to rural and urban areas. The borrower must receive a copy of the notice at least two weeks before the foreclosure sale. The notice must include relevant details and correct addresses of the foreclosure property and place of sale. Names and addresses of all persons involved must also be clearly mentioned.
The proceeds of the foreclosure sale in Virginia go towards paying legal fees and procedural expenses, debts and obligations secured by the deed and the remaining amount if any, goes to the borrower.
