Virginia Laws on a Foreclosure
Foreclosure proceedings in Virginia may be either judicial or non-judicial. As the names imply, judicial foreclosure involves court oversight while non-judicial foreclosure does not. Judicial foreclosure is available for any mortgage lender, while non-judicial foreclosure is generally only available for mortgage lenders who are secured by a specific type of mortgage document called a deed of trust.
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Judicial
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Judicial foreclosure in Virginia involves the mortgage lender filing a lawsuit against the borrower, then proving in a trial that the lender has the right to foreclose because of the borrower's default. After a successful trial, the local sheriff's department will hold a public auction, called a sheriff's sale, where the mortgaged property is sold to the highest bidder. The lender applies the sales proceeds to the outstanding balance on the mortgage loan, and any excess is refunded to the borrower.
Power of Sale
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Judicial foreclosures are much less common than power of sale, or non-judicial, foreclosures primarily because power of sale foreclosures are quicker and much less expensive to carry out. The mortgage lender in a power of sale does not have to file a lawsuit and does not need any judicial permission to hold the foreclosure sale. Instead, the lender carries out a power of sale foreclosure by providing public notice as required by Virginia statutes.
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Notice of Sale
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Before a mortgage lender can hold a non-judicial foreclosure sale the lender must provide a notice of sale to the borrower and to the general public. Specifically, the notice of sale must identify the property to be sold and it must state the date, time and location of the sale. The lender must provide the notice of sale at least eight but not more than 30 days before the actual date of the sale.
High Bidder
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The foreclosure sale, called a trustee's sale in Virginia, is actually a public auction where the mortgaged property is sold to the person making the highest bid for the property. Assuming the high bidder has the cash to pay the bid price, that person immediately becomes the new owner of the property. The borrower must leave the property immediately after the trustee's sale.
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References
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