Chapter 1
Virginia Real Estate Law & Agency
Course: Virginia Real Estate Exam Prep
Subject: Virginia State Salesperson Exam Prep
Chapter: Real Estate Finance
Deed of Trust vs. Mortgage:Virginia primarily uses a three-party deed of trust instead of a two-party mortgage. The key difference is the foreclosure process.
- Parties: The Borrower (Trustor) conveys bare legal title to a neutral Trustee (often a title attorney or company) to hold in trust as security for the loan for the Lender (Beneficiary). The borrower retains equitable title and the right of possession.
- Power of Sale: The deed of trust contains a power of sale clause. Upon the borrower's default, the lender directs the trustee to foreclose. No court order is needed.
Non-Judicial Foreclosure Process in Virginia:This process is faster and less expensive than judicial foreclosure.
- Default & Notice of Default: The lender sends notice.
- Acceleration: The lender declares the entire debt due.
- Appointment of Substitute Trustee: The lender appoints a trustee to conduct the sale.
- Advertising: The sale must be advertised in a local newspaper once a week for four consecutive weeks.
- Sale: The property is sold at a public auction on the courthouse steps to the highest bidder.
- Trustee's Deed: The trustee issues a deed to the winning bidder. There is no statutory right of redemption after the sale in Virginia.