Virginia House Bill 2175, which went into effect on July 1, 2021, makes dramatic changes to the procedure for conducting foreclosure sales in Virginia.
Under the new law, the notice of the foreclosure sale for owner-occupied residential real property will need to be mailed out at least 60 days before the foreclosure sale. Previously, the foreclosure notice needed to be mailed at least 14 days before the foreclosure sale. The notice period of at least 14 days remains in effect for real property that is not owner-occupied residential real property.
Required Language in the Foreclosure Notice
For owner-occupied residential real property, the foreclosure notice will need to include the following additional information:
- The date the last payment was received and the amount of the last payment
- The total amount of the principal, interest, costs, and fees in arrears
- The remaining principal balance due
The person sending out the foreclosure notice on owner-occupied residential real property needs to sign an affidavit stating the foreclosure notice was sent to the property owner. A copy of the foreclosure notice needs to be attached to the affidavit and both documents must be provided to each potential bidder at the foreclosure sale.
The foreclosure sale cannot go forward unless the trustee conducting the foreclosure sale has proof the foreclosure notice was sent.
Further Language Requirements
Effective October 1, 2021, the foreclosure notice will also need to include:
- The website address of the U.S. Housing and Urban Developments office of Housing Counseling with a listing of HUD-certified housing counseling agencies
- The website address and telephone number of the statewide legal aid center
- The following statement in at least 12 point type: “This is NOT a notice to vacate the premises. You should consider contacting an attorney or your local legal aid or housing counseling agency.”
Additional Required Notice Periods
The same 60 day notice period for owner-occupied residential real property applies for the notice sent when the original note has been lost.
Also, for owner-occupied residential real property, the foreclosure notice needs to be sent to holders of subordinate deeds of trust recorded at least 75 days before the proposed sale date. For foreclosures not involving owner-occupied residential real property, the cut-off date for providing notice to subordinate deeds of trust remains at 30 days.
Take Caution with New Foreclosures
While the new law does not go into effect until July 1, 2021, take caution for any foreclosure sale scheduled for July 1, 2021, or after. The new foreclosure notice requirements and time frames should be followed even if the foreclosure notice will be sent out before the effective date of House Bill 2175.
Lenders and firms foreclosing on owner-occupied residential real property need to be aware of and comply with these changes. Failure to do so will result in the foreclosure sale being set aside.