VA Foreclosure Requirements

FORECLOSURES IN VIRGINIA
TITLE COMMITMENTS AND POLICIES
REQUIREMENTS AND EXCEPTIONS

SCENARIO 1:  INSURING THE SUCCESSFUL PURCHASER AT FORECLOSURE OR THE FIRST SALE BY THE SUCCESSFUL PURCHASER

1. Recordation of Trustee’s Deed in proper form in accordance with the Statutes of the Commonwealth of Virginia and the terms of the Deed of Trust from ____________ to ____________ for the benefit of _________ recorded _____________, securing a note in the original principal sum of $____________, vesting fee simple title in [PURCHASER AT FORECLOSURE]

NOTE:  If foreclosure action was filed by a Substitute Trustee, this Company must be furnished a copy of the Appointment of Substitute Trustee duly filed in the land records.  The Appointment of Trustee must be executed prior to the substitute trustee taking any action to foreclose and recorded prior to the Trustee’s Deed.Receipt of proper Notice of Sale and evidence of delivery to the borrower and subordinate lien holders as required by Virginia Code §55-59.1.

2.   Receipt of proper Notice of Sale and evidence of delivery to the borrower and subordinate lien holders as required by Virginia Code §55-59.1.

3.   Receipt of Certificate of Publication evidencing advertisement in compliance with Virginia Code §55-59.2 and the terms of the Deed of Trust.

4.   Receipt of satisfactory evidence that the borrower foreclosed upon has not filed bankruptcy.

NOTE:  In the event that the borrower has filed for bankruptcy, additional requirements and/or exceptions will be added to this Commitment.

UNDERWRITING NOTE:  Do not insure if the borrower files for bankruptcy either before the sale or after the sale but before the recordation of the Trustee’s deed unless you secure the Company’s approval.

5.   Proof of payment of all real estate taxes, penalties and interest, up to the date of the Trustee’s sale.

6.   Receipt of satisfactory evidence that the borrower is not in possession of the property.NOTE: In the event that the borrower remains in possession of the property, additional requirements and/or exceptions will be added to this Commitment.

UNDERWRITING NOTE:  An exception for parties in possession must be included in the Commitment and final Title Policy even if the parties certify that the property is vacant.

UNDERWRITING NOTE: Do not insure after foreclosure if the borrower remains in possession unless you secure the Company’s approval.

IF THE BORROWER BEING FORECLOSED UPON IS AN INDIVIDUAL, ADD THE FOLLOWING REQUIREMENT:

7.   Receipt of satisfactory evidence that the borrower in not entitled to relief or protection under the Servicemembers Civil Relief Act, 50 USCS Appx § 501 et seq.  If such evidence is not available, the following exception will appear in any Title Policy issued pursuant to this Commitment: “Any claim based upon the Servicemembers Civil Relief Act, 50 USCS Appx § 501 et seq., which restricts foreclosure, forfeiture and other legal proceedings based upon military service in the uniformed services of the United States.”

IN THE EVENT THERE ARE LIENS DOCKETED AGAINST THE PROPERTY FOR WATER OR SEWER LIENS, MECHANICS’ LIENS OR MISCELANEOUS LIENS IN FAVOR OF THE COUNTY/CITY, ADD THE FOLLOWING:

8.   Proof of payment of the lien filed by ___________, recorded/docketed in ________ , and recordation/filing of release/termination of said lien.  If a release/termination is not filed, the foregoing matter will appear as an exception in the final Title Policy.

IN THE EVENT THERE IS A FEDERAL TAX LIEN FILED WHICH ATTACHES TO THE PROPERTY AND WAS FILED MORE THAN 30 DAYS BEFORE THE FORECLOSURE SALE, ADD THE FOLLOWING REQUIREMENT:

9.   The record discloses a Federal Tax Lien against __________________ recorded __________________.  This tax lien was filed more than thirty (30) days prior to the Trustee’s sale. The Company must be furnished for its review with a satisfactory: (a) release; or (b) affidavit by the sender or written statement of the Special Procedure Chief, that sufficient notice of the Trustee’s Sale was given to the Internal Revenue Service. If the Company is not satisfied with the documents furnished, the Policy will except to the lien. If the Company is satisfied with the notice given and less than 120 days have passed since the sale without redemption of the United States, the Company will except to the right of redemption in favor of the United States.

IN THE EVENT THAT THE REQUIRED NOTICE WAS DELIVERED TO THE IRS BUT THE INSURED TRANSACTION OCCURS LESS THAN 120 DAYS AFTER THE FORECLOSURE SALE, ADD THE FOLLOWING EXCEPTION:

10.  Rights of the United States to redeem for 120 days from ________________ arising out of the foreclosure evidenced by ________________ recorded __________________

SCENARIO 2:  INSURING THE SECOND PURCHASER AFTER A FORECLOSURE WHICH OCCURRED LESS THAN ONE YEAR AGO BUT MORE THAN 120 DAYS AFTER THE FORECLOSURE SALE

1. This Company must be furnished with proof that the foreclosure proceedings for Deed of Trust recorded in Deed book ______ at page ____ were carried out in accordance with applicable statutes and the terms and provisions of the Deed of Trust.
2. Receipt of satisfactory proof that the subject property was not under the control of the U.S. Bankruptcy Court at the time of foreclosure.