How Does Foreclosure Work in Virginia, and What Can I Do?

How does foreclosure work in Virginia, and what can I do before a sale?

In Virginia, a trustee named in your deed of trust sells the home, and the Code of Virginia requires a mailed notice and a newspaper ad first. You also have options to look at long before a sale date. This is not legal advice. Talk with a housing counselor and an attorney.

The Mike Webb Team (Mike and Claudia Webb, RE/MAX Allegiance) helps homeowners in Arlington, Northern Virginia, Maryland, and Washington, DC get their homes ready to sell and sold.

Not usually. The Consumer Financial Protection Bureau (CFPB) says a mortgage servicer cannot make a first notice or filing for foreclosure until you are more than 120 days behind. The CFPB also says that if you send a complete application for mortgage help early enough, the servicer cannot start foreclosure while it evaluates you. The earlier you finish the application, the more protection you get. Source: CFPB, How to avoid foreclosure.

HUD describes the usual steps and says the timeline varies by state, so this is general, not a Virginia schedule:

• First missed payment: the lender contacts you by letter or phone.
• Second missed payment: the lender is likely to start calling. HUD says to take those calls and explain your situation.
• Third missed payment: a letter arrives with the amount you owe and 30 days to bring the loan current. HUD calls it a Demand Letter or Notice to Accelerate.
• Fourth missed payment: when the 30 days end, the loan can be referred to the lender's attorneys, and you pay the attorney fees as part of what you owe.
• Sale: HUD says you can make arrangements or pay the full amount owed up to the date of sale.

Source: HUD, Avoiding Foreclosure.

Under Code of Virginia 55.1-321, for an owner-occupied home, mailing a copy of the ad or a notice with the same information to the owner by certified or registered mail no less than 60 days before the sale is enough to meet the notice rule. For other kinds of property, the figure is 14 days. For an owner-occupied home, the notice must also include:

• the website address of HUD's Office of Housing Counseling, with its list of HUD-certified counseling agencies;
• the website address and phone number of the statewide legal aid center;
• the date of the last payment received and the amount;
• the total of principal, interest, costs and fees you are behind, and the remaining principal balance;
• a plain statement in at least 12-point type that it is not a notice to vacate, and that you should consider contacting an attorney, legal aid or a housing counseling agency.

The law says the sale cannot go forward unless the trustee has proof the notice was sent. If the owner has died, the notice goes to the owner's last known address, to any personal representative recorded with the circuit court, and to any heirs on the recorded list of heirs. If that is your family's situation, read Who Can Sign and Sell an Estate Home in Virginia?.

Section 55.1-322 requires an ad in a newspaper with general circulation in the county or city where the property sits. If the deed of trust does not say how many times to run it, the trustee advertises once a week for four successive weeks. If the property is in a city, or in a county next to a city, five different days is considered enough. The sale must be held no earlier than eight days after the first ad and no later than 30 days after the last. If these ad rules are not followed, a court can make the sale voidable when someone files a petition.

Yes. Both sections say a postponement is up to the trustee. Section 55.1-321 says no new notice under that section is needed, and section 55.1-322 says a postponed sale is advertised the same way as the first one. So a date on a notice is not always the date of the sale. Keep in touch with your servicer and counselor.

The CFPB calls these "loss mitigation": a repayment plan, forbearance, a loan modification, a short sale and a deed in lieu of foreclosure. Some help you stay in the home. Others help you leave without a foreclosure. A trial modification means your servicer cannot complete a foreclosure sale as long as you make the trial payments on time, according to the CFPB. Source: CFPB, glossary of terms from a loss mitigation letter.

Selling is one more path. Read Can I Sell My House If I Still Owe on My Mortgage? and Short Sale Basics for Virginia Homeowners. A short sale means selling for less than you owe, and it needs your lender's approval.

• HUD-approved housing counselors: (800) 569-4287. HUD funds no-cost or low-cost counseling. Counselors can help you understand your options, organize your finances and speak with your lender for you.
• Homeowners HOPE Hotline: (888) 995-4673, open 24 hours a day, seven days a week, says the CFPB.
• FHA Resource Center: (800) 225-5342, for homeowners with an FHA-insured loan. HUD says FHA has its own loss mitigation programs.
• Virginia Housing: if your loan is through Virginia Housing, its Borrower's Assistance Program decides whether you qualify for home retention or loss mitigation options. You complete its Borrower's Assistance Package and send it to its Loss Mitigation Department. Questions go to 888-756-8603. Virginia Housing says that if your income has been interrupted, your payment may be able to be temporarily suspended.

Sources: HUD and Virginia Housing.

The CFPB says you should not have to pay anyone to help you avoid foreclosure. Its warning signs include a request for money up front, a promise that you will not lose your home, a request to sign over your title or sign papers you do not understand, an instruction to send your payment to anyone other than your servicer, and being told to stop paying your mortgage.

1. Open every letter. HUD says not opening your mail is no excuse in foreclosure court.
2. Call your servicer and ask which options you may qualify for.
3. Find your loan papers and read what they say your lender can do.
4. Call a HUD-approved counselor. The sooner the better, because HUD says the further behind you get, the harder it is to catch up.
5. Ask an attorney or legal aid about the notice you received.

We can look at your home and the market with you and work alongside your attorney or counselor. We do not promise any price or timeline. Read How to Price Your Arlington Home to Sell.

• Behind on Your Mortgage? What Options Do You Have in Virginia?
• Short Sale Basics for Virginia Homeowners
• Can I Sell My House If I Still Owe on My Mortgage?
• Who Can Sign and Sell an Estate Home in Virginia?

Is the notice a notice to leave my home?

No. Virginia's law says the notice must state that it is not a notice to vacate. Still, do not ignore it.

Do I have to pay for a housing counselor?

HUD funds no-cost or low-cost counseling.

Can you tell me what my home is worth?

We can talk it through with you. Online and preliminary estimates are starting points. A property's potential market value depends on its condition, location, features, competition, market conditions, and other factors.

Call or text Claudia at 703-350-3884 or visit claudiawebb.com.

The Mike Webb Team, RE/MAX Allegiance. Arlington, Virginia. Equal Housing Opportunity.