A Virginia buyer is purchasing a home and asks her salesperson, 'If the foreclosure trustee sells my house for more than I owe on the loan, what happens to the extra money?' The salesperson correctly explains that under Virginia's deed of trust foreclosure process, any surplus proceeds after satisfying the deed of trust debt and foreclosure costs are handled in which of the following ways?
Correct Answer
D) The surplus is returned to the trustor after paying off the debt and costs
Under Virginia's deed of trust foreclosure process, after the trustee uses the sale proceeds to satisfy the outstanding loan balance, accrued interest, and foreclosure costs, any remaining surplus is returned to the trustor (borrower). The borrower retains equitable ownership rights in the property, and the deed of trust only secures the amount owed — not any additional equity the borrower has built up.
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Related Topics & Key Terms
Key Terms:
Related Concepts
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
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