A Virginia buyer's agent is explaining financing to her client. The client asks, 'If I stop making payments, can the bank just take my house without going to court?' The agent correctly explains that in Virginia, this is possible because of which specific combination of features in the deed of trust?
Correct Answer
B) The trustee's holding of legal title combined with the power of sale clause
Virginia's non-judicial foreclosure is possible precisely because of the combination of two deed of trust features: (1) the trustee already holds legal title to the property, giving the trustee the legal authority to convey that title at a sale; and (2) the power of sale clause in the deed of trust contractually authorizes the trustee to sell the property upon default without court involvement. Together, these two elements make non-judicial foreclosure legally effective in Virginia.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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