Judicial foreclosure; court must order sale of property subject to foreclosure for deeds of trust. (SB798)
Introduced By
Sen. Don McEachin (D-Richmond)
Progress
✓ |
Introduced |
✗ |
Passed Committee |
☐ |
Passed House |
☐ |
Passed Senate |
☐ |
Signed by Governor |
☐ |
Became Law |
Description
Judicial foreclosure. Provides that a court must order the sale of property subject to foreclosure for deeds of trust entered into on or after July 1, 2011. Property secured by deeds of trust entered into prior to July 1, 2011, may still be foreclosed upon using current non-judicial procedures. Read the Bill »
Status
02/07/2011: Failed to Pass in Committee
History
Date | Action |
---|---|
12/30/2010 | Prefiled and ordered printed; offered 01/12/11 11101713D |
12/30/2010 | Referred to Committee for Courts of Justice |
01/11/2011 | Assigned Courts sub: Civil |
02/07/2011 | Passed by indefinitely in Courts of Justice with letter (12-Y 1-N) (see vote tally) |
02/07/2011 | Letter sent to Virgina Bar Association |
Comments
I doubt Virginia is ready to make a dramatic shift to a judicial foreclosure system. Having a debate over the issue may result in legislation to make the system fairer and more open.
Paul, what's not fair or open about the system now? If a borrower in default believes that acceleration was or a foreclosure was improper, there are options available under the current statute, including remedies in Circuit Court.
Todd,
As to fairness: A homeowner that wishes to challenge an accounting of amounts paid, or an improper assignment of a mortgage and underlying deed of trust , even in cases of substantial merit, is essentially left with two advisable options:
1. Declare bankruptcy, delay the sale a few months, and destroy the homeowners’ finances even more.
2. Find an attorney, pay that attorney substantial sums to research, prepare, and file a declaratory judgment, or other equitable action, and perhaps move for a preliminary injunction, all with low chances of success.
Neither option is a “fair” burden to impose on a homeowner with legitimate defenses. The cost barriers to entry to the court system create a system that is less “fair.” With a judicial foreclosure process, option 2 can be accomplished in a less costly and therefore fairer method.
As to openness: Perhaps notices of foreclosure sales could be made public via a centralized database. Perhaps lenders could be required to record all assignments. There are certain openness suggestions in HB1506, HB1665, SB837, and SB795 all of which are worth discussing.
My major point is changes can be made, let us have the discussion.
My additional commentary is on my blog at:
http://northernvirginialawyer.blogspot.com/2011/01/general-assembly-proposals-judicial.html
The Virginia Housing Coalition is lending its support to this bill.