Judicial foreclosure; court must order sale of property subject to foreclosure for deeds of trust. (SB798)

Introduced By

Sen. Don McEachin (D-Richmond)


Passed Committee
Passed House
Passed Senate
Signed by Governor
Became Law


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 »


02/07/2011: Failed to Pass in Committee


12/30/2010Prefiled and ordered printed; offered 01/12/11 11101713D
12/30/2010Referred to Committee for Courts of Justice
01/11/2011Assigned Courts sub: Civil
02/07/2011Passed by indefinitely in Courts of Justice with letter (12-Y 1-N) (see vote tally)
02/07/2011Letter sent to Virgina Bar Association


Paul A. Prados, Attorney at Law, tracking this bill in Photosynthesis, notes:

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.

Todd Rich writes:

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.

ppradoslaw writes:

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:

Virginia Housing Coalition, tracking this bill in Photosynthesis, notes:

The Virginia Housing Coalition is lending its support to this bill.