I want to know about Virginia Foreclosure Law?

Edwards Finance > Foreclosure

Q. My home was foreclosed two months ago. I assume that the first mortgage will be paid off at the foreclosure auction. We owed considerably less than the house was worth. How is the second mortgage handled. They do not even appear to know that it was foreclosed on, gauging by the letters and calls we are still receiving from them. How will they pursue getting the money owed to them, since the first mortgage got the house and resold it to someone else at the foreclosure auction? We owed $75,000 on the second mortgage. Are there laws about whether they can still sue us for the $75,000? Are they just out of luck? We have not filed bankruptcy yet. If the second mortgage did sue us, we would have to file. Would bankruptcy handle that debt?

A. I believe you are saying that the holder of the first mortgage foreclosed on its note. If that is true then the security interest of the holder of the second mortgage would be wiped out, but they would be entitled to the balance of the proceeds of the foreclosure sale over and above the balance of the first mortgage up to the amount they were owed. Although the holder of the second mortgage would no longer have a valid security interest in the house, they would still be owed the balance on the mortgage and could (and probably would) sue you for that amount. I am surprised the holder of the second mortgage is unaware of the foreclosure. They should have received notice of the sale so they could protect their interest. Was their mortgage recorded? Finally, it is not true that the first mortgage was necessarily "paid off" by the foreclosure. Whatever was bid at the sale would have been paid to the holder of the first mortgage. That is not necessarily the same amount as the mortgage and costs. Although it usually is if the value of the house exceeds the mortgage. The holder of the first mortgage can "bid in" the amount owed them and take title to the house if they beleive it can be resold for a quick profit. Your state may have procedures for filing a report of the foreclosure and the disposition of the proceeds. I know Virginia does and the trustee who does the foreclosure must accont for all of the proceeds of the sale. Bankruptcy would discharge the debt owed the holder of the second mortgage.

Ask Edwards a Finance Question

Other Questions:

The informations Va Foreclosure

There is a great website from Hotz Realty Enterprises, where you can find VA foreclosure property in Florida and Las Vegas. These two areas are rapidly growing so properties make great rentals. All the photos on the website are the best of th...

I plan to be in the market for my first home within a year in Northern, NJ. I have been looking in the paper and notice a bunch of adds for Foreclosures and loans requiring little money down (FHA HUD, ETC) Have any of you had experience b...

I belive that the banks are conspiring to raise rates; but for the purpose of fattening the profit margin on loans (esp charge cards). , once again, you're assuming there's only one bank. How can a thousand banks individually conspire to raise...

Is there really any good, low-risk way to buy a new house (for living in, not for an investment) that is significantly below market value? We live in a suburb of Minneapolis, and because we work out of our home office and don't have to commute ...

Do you think TRAITOROUS Wells Fargo, and other sellout banks will FINALLY get the picture that it is BAD BUSINESS to give loans to ILLEGALS and IDENTITY THIEVES? It isn't just a coincidence that the raids against illegal identity thieves ...

Edwards Finance Menu

Ask a Question
About Us / Me
Contact Me
Privacy Policy

Sitemap

My Favorite Sites

PFBlog
Google Finance
Yahoo Finance
Motley Fool
Nveille's Financial Blog
AllFinanceMatters
Free Money Finance
2MillionBlog
The Terror Finance blog

Q&A Subjects