Virginia's High-speed Foreclosure Process May Get an Overhaul

As its new legislative session begins, Virginia lawmakers may overhaul the Commonwealth's super high-speed foreclosure process in an attempt to stop alleged shortcuts and abuses by lenders repossessing people's homes. 

While many states are moving in a direction to slow down the foreclosure process, Virginia has the dubious distinction of having one of the fastest foreclosure laws in the nation.  The process moves so quickly that homeowners can receive less than two weeks notice that their home is being sold at auction. 

When faced with losing their home, that type of "light speed" timeline can place insurmountable deadlines for Virginia homeowners. To get a court to stop a sale in that narrow window, the homeowner must gather evidence, file a lawsuit, and even potentially post a bond costing thousands of dollars, according to a report in The Washington Post.  

Virginia is currently a non-judicial foreclosure state, meaning that a bank does not need to get court approval before auctioning off a customer's house. In contrast, other more "consumer friendly" states like nearby New Jersey have a judicial foreclosure process that gives a homeowner a day in court to be heard before their house can be auctioned. 

The Virginia legislature is considering three different proposals, any of which would give some added protection to homeowners. The first would give homeowners more time than the current 14 day notice requirement before their home could be auctioned. A second would actually require lenders to seek judicial approval before seizing a home, basically converting Virginia to a judicial foreclosure state. The third proposal would give a homeowner a last minute chance to avert foreclosure by catching up on overdue payments.  

Not surprisingly, the Virginia Bankers Association strongly opposes any changes to the law saying that it would "gum up" the process, according to the Post. Even some key lawmakers, including the Speaker of the House, said that the current system works well and that revisions could make that worse. 

Virginia Senator A. Donald McEachin (D-Richmond) seems to support switching to a court-supervised foreclosure process which would serve Virginia homeowners and give them greater protections at a time when they are financially challenged. He was quoted in The Post saying, "We don't deprive people of their life nor do we deprive them of their liberty without due process and having access to the court system, so it seems odd to me that we'd allow their homes to be taken...without that same sort of due process."

Considering that the federal government has given the banking industry financial help to prop it up during the last several years of financial challenges, it seems only fair that Virginia families who run the risk of losing their homes get some form of help from their governmental leaders in the face of their economic struggles.  

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