Use this foreclosure guide to protect yourself and your home.

Are you a homeowner in Virginia who is faced with possibly losing your house to foreclosure?

When you borrow money to buy a house or land, the creditor usually takes a security interest in the property. If you don’t pay, the creditor can foreclose upon (or take back) that property.

Use this guide to explore what legal rights you have, and how you can protect yourself and your home.

Step 1

Preforeclosure when you fall behind in mortgage payments

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If you own a home with a mortgage, you must make your payments on time.

If you fall behind in your mortgage payments, then you might be in the Preforeclosure stage.

Your mortgage servicer may give you a grace period for 10 or 15 days. If you haven't made payments in this grace period, then you may go to the next stage.

Step 2

Mortgage servicer might start charging you fees

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After your grace period, your mortgage servicer might charge you fees (like late charges and inspection fees).

Each month you miss a fee, the servicer might charge you a late fee. Your loan documents will tell you how much this late fee will be.

The servicer might also do property inspections to see the home. They may charge you for these inspections.

Step 3

Mortgage servicer reaches out to you with options

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Within 36 days after you missed a payment, the servicer must contact you by phone to talk about your options. They should discuss with you how to modify your loan, get on a payment plan, or get a forbearance.

Within 45 days after you missed a payment, the servicer should send you a letter with your options to avoid foreclosure.

You can submit a loss mitigation application to the servicer to try to stop the foreclosure from happening.

Step 4

Lender sends you a Breach Letter

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At this stage of missed payments, your mortgage lender must send you a formal notice, called a Breach Letter. This letter informs you that the mortgage loan is in default.

After they send you a letter, then they might start the official foreclosure process.

Step 5

Foreclosure begins

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Once you are 120 days past due on your mortgage payments, then the lender can begin a foreclosure.

The lender may choose to go through a Judicial or a Nonjudicial foreclosure.

• Judicial means they sue you in court.
• Nonjudicial means they go through out-of-court procedures.

Step 6

Explore ways to Stop Foreclosure

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In Virginia, you might be able to stop the foreclosure by using one of these options:

1. Reinstating the loan (this depends on your loan paperwork)

2. Redeem the property by paying off the full amount of the loan

3. Filing for bankruptcy

Step 7

Foreclosure Process & Sale

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Most lenders go through an out-of-court foreclosure process.

At least 60 days before the home sale, the lender must give you a notice of sale. This notice should be written down. It will tell you about legal aid and housing counselors.

At the Foreclosure Sale, different groups may make bids on the home.

Depending on how much the bids are, you might still owe money on your home -- or you might get money that is bid above the loan amount.

When may my mortgage company foreclose on my house?

Look at your Deed of Trust. Your Deed of Trust will tell you clearly what terms the creditor must follow before it starts foreclosure. 

Almost all mortgages in Virginia are secured by a Deed of Trust. A Deed of Trust is a deed of the property from you to a Trustee, who usually is a lawyer.

The Trustee has the power to sell your property if you don't keep the promises in the Deed of Trust. This includes your promise to pay the mortgage payments on time, in full, every month. 

I received a notice saying that my house payments are going to be accelerated. What does that mean? 

It means that the creditor is saying you’re in default and that all the money you owe, in the past and in the future, is due right now. 

If you make all missed payments plus any late fees, within 10 days of the due date, the creditor may not accelerate your loan. 

I am more than 10 days late with my house payment. Is it too late for me to catch up? 

No, it may not be too late.

It depends on how past due you are, the amount you are delinquent, and what type of loan you have. You may be able to catch up unless you have received a notice that your loan has been accelerated. 

If you have received an acceleration notice, you may want to consider filing bankruptcy in order to keep your house and land. There are many factors involved in a decision to file bankruptcy. 

What are the requirements that must be met before a foreclosure sale is allowed? 

The requirements are as follows:

• The Trustee must give you written notice, by certified or registered mail, at least 14 days before the sale is to take place. The notice must state the date, time, and place of the sale. 
• The Trustee must also advertise the foreclosure sale in a local newspaper of general circulation. 
• The foreclosure sale may not take place until at least 8 days after the first advertisement and it must take place within at least 30 days of the last ad. 

The trustee sells your property, usually through an auction at the courthouse. 

Will I get any of my money back after the foreclosure sale? 

It is unlikely that you will get any money.

Usually, the sale is for less than the value of the home and you will still owe money. 

When do I have to move if my house is sold at a foreclosure sale? 

You do not have to move until the new owner gives you notice to move in writing. 

Even then, you have the right to stay in the house until the new owner files an Unlawful Detainer (eviction) in court and the Judge says you must move. 

The new owner may not cut off the utilities, lock you out, or remove you or your belongings from the home without first going to court. 

Can a bankruptcy stop a foreclosure?

Bankruptcy means you ask the court to excuse you from your duty to repay your creditors. Bankruptcy allows you to discharge (get rid of) most of your debts, but also keep a certain amount of property.

Two kinds of bankruptcy apply to individuals and married couples not in business. These are a Chapter 7 (or straight) bankruptcy and a Chapter 13 (debt adjustment) bankruptcy. 

Filing for bankruptcy stops foreclosures, repossessions, utility cutoffs, debt collection lawsuits, garnishments, levies, attachments, evictions where a judgment of possession has not been entered, and most other actions to collect debts. 

In Chapter 7 bankruptcy, what happens to a house I’m buying? 

If you’re buying a house, you may have to give it back to the creditor.

In a Chapter 7 bankruptcy, there are a number of ways you can keep your house.

Even if you can use one of these ways, you still may lose the house to the Bankruptcy Court if you have more “equity” in it than you can protect under Virginia’s debtor exemption laws. 

In a Chapter 13 bankruptcy, what happens to a house I'm buying?

In a Chapter 13 bankruptcy, you may not have to give back, redeem, or reaffirm a house you’re buying.

Instead, you may be able to keep a house you’re buying even if you’re behind on payments.

To keep the house where you live, you must make current payments, and you get three to five years to catch up on missed payments. 

My son or daughter just got called up for military service and now they have received a foreclosure notice on their house.  What can we do?

The “Servicemembers Civil Relief Act” is a federal law that contains special rules for men and women called up for active duty. 

Generally, the Act prohibits the sale, foreclosure, or seizure of property while the person is on active duty. 

Housing legal problem guides

Do you need help with housing problems in Virginia? These free legal help guides can help with problems when you are a renter or a homeowner.