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Foreclosure Process In West Virginia
By: Kathy Swift
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West Virginia
West Virginia does both judicial and non judicial foreclosures. As in most states where both options are available, the decision about the process will be used will depend on the language in the mortgage or deed of trust. If the “power of sale” clause is written into the mortgage or deed of trust, then judicial foreclosure can be avoided. This is by far more preferable to the bank because it moves the prcess along much quicker. Choosing to follow a non judicial process is also in the lenders best interest because it saves them money. The less the bank has to spend on resolving this problem, the better for them. Should such a clause not be written into the mortgage or deed of trust, then the foreclosure must go through the court system. This is referred to as judicial foreclosure and it is more costly to the bank in attorneys fees. Time is a cost to the lender as well and judicial foreclosure takes a lot more time.
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In power of sale foreclosures, or non judicial foreclosures, sometimes the language in the mortgage or deed of trust specifies the time, place and terms of the sale. When this is the case, then that is the procedure which will be followed.
Barring such specifications, most out of court foreclosure proceed with a notice of sale being posted on the property itself and also on the front door of the courthouse for the county where the property is located. This posting of the notice must be presented to the owner/borrower and anyone holding a junior or subordinate lien on the property. These could include 2nd mortgages, 3rd mortgages or 4th mortgages. People with trust deeds attached to the property, mechanics liens etc…
In addition to the distribution of these notices of sale, the lender must advertise the sale of the property in a newspaper. The newespaper chosen for this part of the processmust have circulation in the county where the property is located. The ad must be run once a week for four weeks prior to the sale date. The time line for the notification of the home owner in trouble and the junior lien holders is 20 days prior to the sale.
The auction will be held as described in the notice of sale. It must be a public auction. This means of course, that anyone can bid for the property. Even the home owner or a friend or relative of the home owner etc.. can do this. The home will be awarded to the highest bidder. At the time the winning bid is achieved, the bidder must be prepared to pay one third of that winning bid in cash. This is an unusual requirement, but not unheard of. Some states require the entire purchase must be paid in cash, at the time the winning bid is announced.
In West Virginia, there is no right of redemption period. This is a time allowed in some states where the former home owner can regain ownership of the property by paying what was the winning bid price, plus some interest. But, in West Virginia, once the sale is over there is no turning back, the winning bidder does not need to worry that if they put more money into the place or move into it etc… that, the money and effort use for that purpose will be wasted. Conversely it means the original home owner had better do all they can to beat the clock so to speak, because once it is sold at auction, they are out of luck.
Also in West Virginia deficiency judgments are not allowed. This is good news for the home owner or borrower. It means that if the property is sold at auction for less than is owed on the home, then the lender or lenders cannot pursue the borrower for the funds that were not generated by the sale. In states where deficiency judgements are allowed this can be a big stress and worry for the person loosing their home to a foreclosure auction. Just imagine how bad it would be to loose your home to the trustee's sale and still ave the bank sue you for more money. Thanks West Virginia for standing up for the little guy here.
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