The General Assembly finally heard the hue and cry from us about lenders abuse of associations in the foreclosure process. Unfortunately this new statute does not fully end the abuse. The key word in the title above is “occur”. The first benefit of the new law is that Lenders must now give associations notice at least 60 days in advance of initiating foreclosure. How does this help us?
Well, maybe not a lot but at least we can get that property up on the radar. You are now on notice that this owner is in financial straits. If there are judgments for delinquent assessments in place get to work right away to garnish wages and bank accounts because very often there is no money left over for junior lien holders after foreclosure and the fact that a foreclosure occurs is certainly a bad sign concerning your delinquent owners ability to pay his creditors. The second benefit is that if the foreclosure sale occurs whoever is the successful bidder is deemed to be an owner under the new statute – that includes the lender if it is the successful bidder. That means that you can collect assessments from the lender from sale date forward. The recordation of a deed from the trustee is no longer required to create a new owner. This is great news. The only bad news is that the statute does not require a lender to complete a foreclosure so that if the advertised sale is cancelled without a successful bidder there is no new owner and “the beat goes on.” This law becomes effective on July 1, 2015 and will be found in Sections 15.2-979, 55-79.41 and 55-509 of the Code of Virginia.