Understanding The Process Of Foreclosure Sales Virginia

By Anthony Collins


Generally, a foreclosure is the scenario that happens when the homeowner does not repay the mortgage. In fact, it is a legal process where the owner forfeits all the right to the mortgaged property. However, Foreclosure sales Virginia happens when the homeowner fails to pay the outstanding debt or else sell the property through short sale. As a result, the property goes to auction, and if the property does not sell at auction, the lender takes possession of the property.

Normally, when lenders gives some loan without the backing of a collateral, such a lender may only have you charged in court for failing to pay. Nonetheless, it may be difficult to get all the money back from the borrower. They may, therefore, sell the debts to agencies that collect and subsequently write them off. Such debts acquired with no collaterals are referred to as unsecured.

However, the case for secured loans is different. Although the lender might incur some loss in the case of default, a large portion of the debt may be recovered by seizing and selling a property used as the collateral for the loan. Foreclosures, therefore, happen since the home is used as the security for the mortgage. However, there are several stages for foreclosures in Virginia.

The first stage is when the homeowner misses payments. It begins when the borrower fails to make the mortgage payment on time. That may be due to various hardships such as divorce, unemployment, medical challenges or death. However, when faced by such a situation, it is essential you talk the lender immediately. In some cases, the borrower may intentionally stop paying the loan since the mortgage is higher than the value of the property.

The second phase in a foreclosure is when the lender provides a public notice. When the borrower has missed the payments for 3-6 months, a public notice is given by the lender to the county office. The notice states that the borrower has defaulted the mortgage. The notice is intended to alert the homeowner of the danger of losing the rights to the property, and that he could as be evicted from that property. Depending on the state, a lender can post the notice at the door of the property.

The third phase is referred to as pre-foreclosure. This is where borrowers are given some grace period of between one to four months depending on regulations in the area. At this stage, borrowers may make arrangements with lenders regarding repaying outstanding amount or arranging for short sales. When borrowers pass their debt under such arrangements the process then ends.

The fourth phase is auctioning a property if the borrower have not found a remedy by the set deadline. As a result, a date is set by the lender or the representative of the lender for a property to be sold at an auction. At this point, the home is sold to the one who make the highest bid for a cash payment.

Lastly, when a property fails to be purchased at the auction, the post-foreclosure stages are initiated so that lenders assume ownership of the property. Nevertheless, open market agents may also be relied on to sell bank-owned properties through liquidation auctions.




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