Under Virginia law, homeowners who fall behind on mortgage payments usually receive just one official notice before foreclosure—a notice of sale. Thankfully, federal law typically requires the bank to wait 120 days after a missed payment before initiating the foreclosure process. Additionally, federal law generally mandates that the bank contact you before starting the foreclosure process in Virginia to discuss alternatives. You may be able to avoid losing your home by catching up on payments or qualifying for options like a loan modification. Understanding the foreclosure process in Virginia is an important part of navigating your own home foreclosure successfully.
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What Is Foreclosure Anyway?
Foreclosure is a legal process lenders use to reclaim property securing a loan, typically after the borrower falls behind on payments. While foreclosure can be a difficult experience, it’s important to remember that it’s not the end of the road. By understanding how foreclosure works in [Virginia], you’ll be better equipped to navigate the process and come out on the other side as successfully as possible.
What Are My Rights During Foreclosure in Virginia?
In a Virginia foreclosure, you generally have the right to:
- Receive a preforeclosure breach letter.
- Apply for loss mitigation options.
- Get notice of the foreclosure sale.
- Bring the loan current and stop the foreclosure sale.
- Receive special protections if you’re in the military.
- Pay off the loan to prevent the sale.
- File for bankruptcy.
- Collect any excess funds after a foreclosure sale.
By understanding the foreclosure process in Virginia, you can better navigate the situation, potentially save your home, or at least minimize the stress involved.
The Basic Stages Of A Foreclosure
There are a few stages that are important to any foreclosure process in Virginia.
Foreclosure works differently in different states around the country.
The two ways different states use to foreclose upon a property are: judicial sale or power of sale.
Connect with us by calling 571-470-7154 or through our contact page to have us walk you through the specific foreclosure process in Virginia.
In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.
Under Judicial Foreclosure:
- Your mortgage lender will initiate a lawsuit in the court system.
- You’ll receive a letter from the court demanding payment.
- If the loan is valid, you’ll have 30 days to make the payment to avoid foreclosure (this period can sometimes be extended).
- If you fail to pay within this timeframe, a judgment will be entered, allowing the lender to request the sale of your property, typically through an auction.
- Once the property is sold, the sheriff will serve an eviction notice, requiring you to vacate the property immediately.
Under Power of Sale (or Non-Judicial Foreclosure):
- The mortgage lender serves you with a payment demand, and while the process may be subject to judicial review, it typically does not involve the courts.
- Once the required waiting period has passed, a deed of trust is created, transferring control of your property to a trustee.
- The trustee is then authorized to sell your property at a public auction to the lender, with notice provided beforehand.
Anyone who has an interest in the property must be notified during either type of foreclosure.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
What Happens After A Foreclosure Auction?
After a foreclosure is completed, the loan amount is typically paid off using the proceeds from the sale. However, if the sale doesn’t cover the full loan balance, the lender may seek a deficiency judgment against the borrower for the remaining amount.
A deficiency judgment allows the bank to obtain a judgment against the borrower for any outstanding balance after the foreclosure sale. Some states limit this judgment to the fair market value of the property at the time of sale, while others permit the lender to pursue the full loan amount.
For detailed information on deficiency judgment laws, which vary by state, here’s a helpful resource that outlines the laws state by state.
Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at Northern Virginia House Buyers to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.
If you need to sell a property near Virginia, we can help you.
We buy houses in Virginia Virginia like yours from people who need to sell fast.
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Another Foreclosure Resource For Virginia Virginia HomeOwners: