Virginia has both judicial and non-judicial foreclosures which is both in court and out of court foreclosures.  Out of court foreclosures (non-judicial) is the more common of the two and typically takes 2 months or less.

Judicial Foreclosure
The judicial process of foreclosure, starts with the lender filing a lawsuit to obtain a court order to foreclose; this is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder.

The borrower has two hundred forty (240) days from the date of the sale to redeem the property by paying the amount for which the property was sold, plus six (6) percent interest.  This means that a person could win the bid at the auction but if the borrower obtains the funds plus interest within 240 days, there is a chance that the auction winner could lose the property.

Non-Judicial Foreclosure
The non-judicial process of foreclosure allows the lender to foreclose without going through the courts.  A "power of sale" clause in a deed of trust or mortgage, states that the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of their default.

Prior to any foreclosure sale, the lender is required to send notice to the borrower giving them 30 days to bring the loan current and prevent foreclosure.

After the 30 day period ends, the lender then schedules the foreclosure sale and advertises it giving at least 14 days notice of the sale to the borrowers. In Virginia, the Notice of Sale publication dates vary based on the requirements of the deed of trust or state statute. Anytime prior to the sale, the borrower may prevent the sale by paying what is owed plus costs and attorney´s fees. 

Foreclosure sales are usually held at the courthouse and there is an opening bid on each property which sells to the highest bidder. If the winning bid is not sufficient to pay off debts owed, the lender may still pursue the borrower for these amounts.  In Virginia, there are no limits to the amount of deficiency judgments a lender can pursue; in other words, the borrower is still on the hook to pay all additional monies owed to the lender.  However, if there is a surplus from the sale, those funds would revert to the borrower.

In the case of a no-bid situation in an auction, the property reverts back to the lender who records the property in its books as an REO (real estate owned) property.  These non-performing assets are a liability to a lender or bank and they typically engage Realtors to help them sell these homes.  (As a homebuyer or investor, you may be able to find some great REO deals. If you are interested in finding bank owned properties in Virginia Beach, Chesapeake, Norfolk or in other cities throughout Hampton Roads, feel free to email me.)

In closing, the foreclosure sale cannot be postponed but it can be cancelled.  The lender may cancel the sale if the borrower is able to bring the debt current. In the event that the sale is cancelled and the lender needs to reinstate foreclosure, the process would have to be started from the beginning.  Once the sale is final, the borrower cannot redeem the property.