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- A deed of trust places sale authority with a trustee
- Virginia requires advance written notice
- Newspaper advertisement is a separate requirement
- The trustee conducts the public auction
- Taxes, liens, and proceeds remain important
- Federal mortgage-servicing law operates alongside Virginia law
- Sale, title, and possession are different events
- Sources
Key Facts
- Virginia state level: Virginia deeds of trust commonly permit a trustee to sell property without an ordinary foreclosure lawsuit when the instrument and statutory requirements authorize the sale.
- Virginia state level: For owner-occupied residential real estate, Virginia Code § 55.1-321 treats certified or registered mailing of the required sale notice at least 60 days before sale as sufficient notice to the owner.
- Virginia state level: Virginia requires newspaper advertisement of a trustee’s sale and specifies minimum publication rules when the deed of trust does not supply a sufficient method.
- Virginia state level: The advertisement must identify the property and state the time, place, terms, trustee, and a contact for sale inquiries.
- Federal and Virginia: Federal servicing protections can delay referral or sale for covered loans, but Virginia law controls the deed-of-trust sale procedure.
Foreclosure in Virginia commonly proceeds through a trustee’s sale under a deed of trust. This nonjudicial process does not require the lender to obtain an ordinary foreclosure judgment before every sale, but the trustee and secured party must comply with the deed of trust, Virginia statutes, and applicable federal servicing rules.
Different procedures govern tax sales, condominium or association liens, and unusual mortgage instruments. This article addresses a typical deed-of-trust foreclosure of real estate.
A deed of trust places sale authority with a trustee
A Virginia deed of trust generally names a trustee and secures the debt evidenced by the note. After a default and valid exercise of the power of sale, the trustee conducts the auction for the benefit of the secured obligation while owing the duties imposed by the trust instrument and law.
The secured party may appoint a substitute trustee. Virginia Code § 55.1-320 requires the appointment instrument to be recorded before or when the substitute exercises a power under the original deed of trust.
The deed of trust, note, recorded substitutions, and notices answer different questions. A servicer’s name on a statement does not alone identify every party with an interest in the loan.
Virginia requires advance written notice
Section 55.1-321 requires written notice of the proposed sale’s time, date, and place to the present owner and specified recorded interest holders. For owner-occupied residential real estate, certified or registered mailing at least 60 days before sale is sufficient compliance for the owner notice described by the statute.
For other deeds of trust, the statute uses a 14-day mailing period. The longer owner-occupied residential period should not be assumed for commercial, investment, or other non-owner-occupied property without confirming the statutory classification.
The foreclosure sale cannot go forward unless the trustee has proof that the required notice was sent. For owner-occupied residential real estate, § 55.1-320 also requires the trustee to receive an affidavit confirming notice and provide redacted copies of the affidavit and notice to potential bidders before the sale begins.
Newspaper advertisement is a separate requirement
Virginia Code § 55.1-322 requires advertisement in a newspaper having general circulation in the city or county where the property lies. If the deed of trust specifies a sufficient publication method, that method applies subject to statutory minimums.
When the deed does not provide a sufficient method, the statute supplies publication rules. Section 55.1-323 requires the advertisement to describe the property, identify its street address or general location, state the time, place, and terms of sale, name the trustee, and provide contact information for inquiries.
A commercial foreclosure listing is not a substitute for the statutory advertisement or trustee’s current announcement. Sales can be postponed or canceled, so the originally advertised date may not remain operative.
The trustee conducts the public auction
Virginia Code § 55.1-324 permits written one-price bids from the beneficiary or another person for announcement at the sale, and persons other than the trustee may bid. The advertisement and announced terms govern deposits, accepted funds, closing deadlines, and bidder default consequences.
A secured creditor may bid using the debt to the extent allowed by the sale terms and law. If the creditor acquires title, the property can later become REO foreclosure property; that later listing is separate from the trustee’s sale.
Taxes, liens, and proceeds remain important
Virginia Code § 58.1-3340 gives assessed real-estate taxes and levies priority over other liens and directs the purchaser or foreclosure trustee to cause sale proceeds to be applied to those taxes and levies.
Other lien priorities depend on the instruments, recording history, lien type, and applicable law. Foreclosure may eliminate some junior interests when all requirements are satisfied, but it does not erase every senior lien, tax, easement, tenancy, or other interest.
The trustee must account for the sale through Virginia’s commissioner-of-accounts system. Sale expenses, secured obligations, subordinate claims, and surplus are handled under the governing statutes and recorded interests rather than by the listing price alone.
Federal mortgage-servicing law operates alongside Virginia law
For most mortgages covered by Regulation X, a servicer generally may not make the first notice or filing required to begin foreclosure until the loan is more than 120 days delinquent, subject to regulatory exceptions. Timely complete loss-mitigation applications can also trigger evaluation, appeal, and foreclosure-sale protections.
Those federal rules do not replace Virginia’s notice, advertisement, trustee, or auction requirements. The national foreclosure overview explains this federal-state boundary.
Sale, title, and possession are different events
The successful bid does not answer every title question. The trustee’s deed, recorded lien history, taxes, sale accounting, and title-insurance exceptions can each affect the purchaser’s interest.
Possession is also separate from ownership. Former owners or tenants may remain after sale, and applicable Virginia possession procedures and federal tenant protections govern removal. A deed does not authorize prohibited self-help.
Sources
- Virginia Code § 55.1-320, deed-of-trust sale and trustees
- Virginia Code § 55.1-321, notices before trustee sale
- Virginia Code § 55.1-322, advertisement
- Virginia Code § 55.1-323, advertisement contents
- Virginia Code § 55.1-324, trustee powers and duties
- Virginia Code § 58.1-3340, real-estate tax lien
- Electronic Code of Federal Regulations, 12 C.F.R. § 1024.41
