In the state of Virginia, the non-judicial process of foreclosure applies, as the primary instrument of security is the Deed of Trust. The Deed of Trust agreement dictates that the property is in trust until the loan has been paid back in its entirety. A trustee is appointed to manage the deed, and the lender whose borrower is in default on the repayments of their loan will instruct the trustee to foreclose on said borrower.
The part of the trust deed agreement which allows this to take place is the power of sale clause. It is a precondition that the borrower agrees to when they undertake to sign their loan agreement. So Virginia is a “title theory” state. The mortgage is also used in Virginia and if this type of agreement was used to secure and underlying loan it would be subject to a judicial foreclosure. However this state tends to prefer the non-judicial process as it is faster and more economical for all concerned.
Non-judicial foreclosure sees the trustee having to adhere to a very stringent notice process. Before the foreclosure is initiated the notice has to appear once a day for three days, or once a week for two weeks in a general circulation newspaper. If the property is near to a city this period of time is extended. A notice has to be served on the borrower 14 days before the sale and the trustee will auction the property to the highest bidder.
The process in a non-judicial foreclosure is relatively fast if it is uncontested and takes 60 – 90 days. In the case of a contested non-judicial foreclosure or a judicial foreclosure the timeline is longer. Deficiency judgments are allowed and there are no statutory rights of redemption in this state.