How are mortgage liens treated in West Virginia?

West Virginia is generally known as atitle theory state where the property title remains in trust until payment in full occurs for the underlying loan. The document that secures the title is usually called adeed of trust. In West Virginia, themortgage serves the same purpose and generally contains the same terms as adeed of trust and serves the same function in ajudicial foreclosure.

How are West Virginia mortgages/deeds of trust foreclosed?

The primary method of foreclosure in West Virginia involves what is known asnon-judicial foreclosure. This type of foreclosure does not involve court action but requires notice commonly called a sale under thepower of sale. When themortgage is initially signed it will usually contain a provision called apower of sale clause, which upon default allows anattorney to foreclose on the property in order to satisfy the underlying defaulted loan, which is sometimes referred to as anote. Because this is a non-judicial remedy, there are very stringent notice requirements and the legal documents are required to contain thepower of sale language in order to use this type of foreclosure method.

Power of Sale Notice Requirements:

1. Prior to initiating a foreclosure, anotice of foreclosure sale must be advertised pursuant to West Virginia Code, Chapter 59, as a Class II legal advertisement at least once a week for two (2) successive weeks. Thenotice of sale must also be posted at the courthouse and three (3) other public places at least twenty (20) days before the sale and served on the borrower and junior lienholders.
2. Anotice of sale by a trustee under a trust deed shall show the following particulars: (a) The time and place of sale; (b) the names of the parties to the deed under which it will be made; (c) the date of the deed; (d) the office and book in which it is recorded; (e) the quantity and description of the land or other property or both conveyed thereby; and (f) the terms of sale.
3. The trustee will auction the property to the highest bidder and require a 1/3 cash deposit of the bid price. The foreclosure sale may be postponed at the request of the trustee and advertisement of the postponement must take place in the same manner as the original sale.

In West Virginia, thelenders can also go to court in what is known as ajudicial foreclosure proceeding where the court must issue a final judgment of foreclosure. The property is then sold as part of a publicly noticed sale by thesheriff. A complaint is filed in court along with what is known alis pendens. Alis pendens is a recorded document that provides public notice that the property is being foreclosed upon.

What are the legal instruments that establish a West Virginia mortgage?

The documents are known as themortgage or in a commercial transaction, asecurity agreement. Sometimes the mortgage document is combined with thesecurity agreement. Amortgage is filed to evidence the underlying debt and terms of repayment, which is set forth in thenote.

How long does it take to foreclose a property in West Virginia?

Depending on the timing of the various required notices, it usually takes approximately 60-90 days to effectuate an uncontestednon-judicial foreclosure. This process may be delayed if the borrower contests the action in court, seeks delays and adjournments of sales, or files forbankruptcy.

Is there a right of redemption in West Virginia?

No, West Virginia does not have a post-salestatutory right of redemption, which would allow a party whose property has been foreclosed to reclaim that property if the property is sold underpower of sale.

Are deficiency judgments permitted in West Virginia?

No, adeficiency judgment may not be obtained when a property in foreclosure is sold at a public sale for less than the loan amount that the underlying mortgage secures.

What statutes govern West Virginia foreclosures?

The laws that govern West Virginianon-judicial foreclosures are found in West Virginia Code, Chapter 38, Article 1 (Vendor and Trust Deed Liens) inclusive of §38-1 through §38-16-506. Deeds of Trust are referenced in §38-1-1a. Public notice provisions are set forth in other areas of the West Virginia Code, Chapter 59 (References Class II, legal advertisements). To view these statutes on the Web, you can visit:

http://www.legis.state.wv.us/WVCODE/59/ (Legal Advertisements)
http://www.legis.state.wv.us/WVCODE/38/ (Deeds of Trust)