State Foreclosure Laws.

Alabama

Judicial Foreclosure Available: Yes
Non judicial Foreclosure Available: Yes
Alabama allows foreclosure in one of three ways:
by filing a lawsuit to foreclosure by a foreclosure sale conducted in accordance with the terms specified under a power of sale clause in the deed of trust or mortgage, or if there is no power of sale clause, then by a public sale at the courthouse steps. Foreclosure by filing a lawsuit seeking a court order to foreclose is not common. Methods two and three are more commonly used.

Power of Sale Foreclosure

Preliminary Notices

Advertising

The sale may not take place until 30 days after publishing an advance notice of the time, place and terms of the sale once a week for four consecutive weeks. The notice must be published in the county in which the property is located.

Sale Procedures

Documents May Specify Procedures

If the mortgage or deed of trust contains a power of sale clause and specifies the time, place and manner of the foreclosure sale, then that procedure must be followed.

Statutory Procedure

However, if the mortgage or deed of trust with a power of sale clause is silent as to the place of terms of the sale, or as to the type of notice of the sale, then a foreclosure sale may be made at the courthouse door of the county where the property is located, after a breach of the conditions or requirements of the mortgage, or deed of trust, by selling for cash to the highest bidder. However, in the case of a sale under a mortgagee or deed of trust with a power of sale clause, a foreclosure deed conveys the title.

Foreclosure Without a Power of Sale Clause

If the mortgage or deed of trust lacks a power of sale clause and the lender chooses not to file a lawsuit to foreclose, then the lender may foreclose by selling the property for cash to the highest bidder at the courthouse door in the county where the property is located. Advance notice of the time, place, terms and purpose of the sale must be given by publishing an ad once a week for four consecutive weeks in a newspaper in the county where the property is located.

Deficiency

The lender may sue to foreclose the mortgage without filing a suit to obtain a deficiency judgment. Alternatively, the lender may sue to foreclose, and then sue for any resulting deficiency. It is the lender's choice.

Redemption

The borrower has a right to redeem within one year after the foreclosure. Anyone who wants to redeem should obtain a statement of the price paid for the property at the foreclosure sale from whoever brought the property at the foreclosure sale. The borrower can then redeem the property by paying the purchase price, taxes, insurance, improvements and ten percent interests on the price and all other legitimate charges to the purchaser. If necessary, the borrower can sue in the circuit court to redeem the property.

Alaska

Judicial Foreclosure Available: Yes Non-judicial Foreclosure Available: Yes Alaska offers two ways to borrow money against real estate: a true mortgage, and a deed of trust. The true mortgage may be foreclosed in Superior Court, according to the rules of equity. The deed of trust names the trustee who will oversee the foreclosure sale by recording and posting a notice of sale and arranging an auction to the highest bidder. Alaska law provides a procedure to appoint a substitute trustee by recording a proper notice of the appointment.

Preferred Method of Foreclosure: Non-judicial deed of trust sale.

Non judicial Power of Sale Foreclosure

The deed of trust must be foreclosed according to its own terms, provided those terms are consistent with the minimum protections of Alaska's laws.

Preliminary Notices

Recording

Not less than 30 days after the default and not less than three months before the sale, the trust will record notice of default stating the name of the borrower and the book and page where the trust deed is recorded. It must describe the property, the borrower's default, the amount the borrower owes, and the trustee's desire to sell. It must give the date, time and place of the sale.

Mailing

Within ten days after recording the notice of default, the trustee must mail a copy of the same by certified mail to the last known address of (1) the borrower, and (2) any person whose claim or lien on the property appears of record or is known to the lender or trustee and (3) any occupant. The trustee may have the notice delivered personally instead of sending it by certified mail.

Reinstatement Rights Any time before the sale, the borrower may cure the default and stop the sale by paying a sum equal to the missed payments plus attorney's fees. The lender may not require the borrower to pay off the entire remaining principal balance of the loan to cure the default; just the missed payments and attorney's fees. If the lender has recorded a notice of default two or more times, then the Alaska statutes provide that the lender can refuse to accept the borrower's monies for the missed payments and attorney's fees and proceed with the foreclosure sale instead.

Sale Procedures
Place of Sale
The front door of the Superior Court for the judicial district where the property is located, unless the deed of trust specifies another location.

Manner of Sale The trustee can conduct the auction or bring in an auctioneer to call out the sale. Postponement The trustee can postpone the sale by giving the person who conducts the sale a signed and written postponement request moving the foreclosure to a different time and place, which must be publicly announced at the time and place originally fixed for the sale.

Terms The trustee must sell to the highest and best bidder. The lender may bid at auction. The trustee's deed must give the book and page where both the original deed of trust and the default notice were recorded. It must state the notice of default was properly mailed. It must give the time, place and manner in which the foreclosure sale was conducted, and the amount paid for the property at foreclosure. After the sale, the trustee must record an affidavit that the notice of default was properly mailed.

Redemption If the lender forecloses by means of an out-of-court foreclosure sale under a deed of trust, then the borrower has the right to redeem the property. However, the borrower does not have the right to redeem if the sale was the result of a lawsuit and a court order commanding the sale.

Deficiency Judicial foreclosure permits a deficiency suit. However, if the lender forecloses through an out-of-court foreclosure sale under the deed of trust, then the lender may not sue for a deficiency judgment afterward.

Arizona

When you develop a definite plan of action with well-timed, well-informed steps, you can stop the foreclosure process and save your home. We have outlined the foreclosure process for the state of Arizona.

Judicial foreclosure available: Yes
Non-judicial foreclosure available: Yes

Trustee

A trustee may conduct the foreclosure sale out of court under a power of sale clause if the borrower defaults on the loan. Alternatively, a trustee (or the lender) may sue to foreclose. A trustee may also sue the borrower for physical abuse to the property, waste, or other impairment of the security, but only so long as the borrower was in possession or control of the property when the damage was done. The trustee cannot conduct a foreclosure sale under the power of sale clause until a lawsuit to foreclose is dismissed. Under Arizona law, a bank, trust company, Savings & Loan or other institutional lender can be a trustee. Arizona licensed attorneys, real estate brokers, and insurance agents can also be trustees. The lender for any reason may appoint a substitute trustee if they record a Notice of Substitution of Trustee and mail a copy to the borrower. A trustee may resign by recording a Notice of Resignation of Trustee.

Preliminary Notices

Contents

The trustee will give written notice of the time and place of sale including legal description of the property, by each of several methods.

Recording

The trustee must record a notice of the sale in the county recorder's office in the county where the property is located.

Advertising

Once a week for four consecutive weeks, the notice must appear in a newspaper in the county where the property is located. The last notice must be published not less than ten days prior to the date of the sale.

Posting

(1) If it can be done without a breach of the peace, the trustee can post the notice at least 20 days prior to the date of the sale, in some conspicuous place on the property to be sold. (2) He or she can post the notice at the courthouse or at a specified place at the place of business of the trustee in the county in which the property is located.

Mailing

The trustee or lender must mail, within five days after recording the notice of sale, by certified mail, a copy of any notice of sale to each of the persons who are parties to the trust deed except the trustee. It must be addressed to the mailing address specified in the trust deed. The notice must set for the nature of the borrower's breach or nonperformance under the trust deed. In addition, any person will be entitled to receive a copy of the trustee's foreclosure notice if such a person records a statutory Request for Notice form.

Special Procedure

For a fee up to $20, the trustee can provide information on the unpaid balance, the name and address of the owner, the date the trustee's notice was recorded and a list of encumbrances. A trustee must honor a written request, and may honor an oral request.

Sale Procedures

Time and Place

The time and place of the foreclosure must be designated in the notice of sale.

Manner of Sale

The trustee or the trustee's agent must conduct the sale. The sale is for cash to the highest bidder, except that the lender can make a 'credit bid,' which means to cancel out some part (or all) of the money the borrower owed the lender on the lien, instead of paying cash. A successful high bidder must pay the bid price by 5p.m. of the day after the bid, other than a Saturday or legal holiday. Every bid is an irrevocable offer until the sale is completed, which happens when the bidder pays the bid price to the trustee's satisfaction. If the high bidder fails to make the payment by 5:00 p.m., the day after being notified of the option to buy, then the trustee may postpone the sale.

Postponement

The trustee may postpone the sale to another time, or another place, by giving notice of the new date, time and place by public declaration at the last place and time the property was offered for sale. No other notice is required. A trustee may also, by written agreement, extend the time for a buyer to come up with the payment.

Post-Sale Matters

The sale proceeds will go to the payment of the obligations secured by the trust deed that was foreclosed, then to junior lien holders in order of their priority. The successful bidder gets a trustee's deed, which constitutes conclusive evidence that the trustee conducted the foreclosure sale property.

Deficiency

An Arizona deed of trust permits the real estate that is the collateral for a loan to be sold at a foreclosure sale by a trustee. The proceeds of the sale will be paid to the lender, or the lender can take title to the property and cancel out the debt in exchange for the deed, called a 'credit bid.' Under a new Arizona law, a lender may not bring a subsequent deficiency suit against a person who lost a property that is 2.5 acres or less at a foreclosure, provided the property was a single one-family or a single two-family dwelling. This is so even if the high bid at foreclosure was less than the balance due on the loan. In foreclosures against other types of property, a deficiency is limited to the difference between the balance owed and the fair market value of the property, and then only if the suit is brought within 90 days of the power of sale foreclosure.

Redemption

Arizona does not recognize a subsequent right of redemption on foreclosure sales.

Arkansas

When you develop a definite plan of action with well-time, well-informed steps, you can stop the foreclosure process and save your home. We have outlined the foreclose process for the state of Arkansas.

Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: Yes

Under Arkansas law, a residential real property mortgage held by a bank, savings, and loan or mortgage company may be foreclosed under a power of sale clause in the mortgage. Agricultural real property or construction loans operate by different rules.

Power of Sale Foreclosure

Preliminary Notice

Contents of Notice

The Notice of default and Intention to sell must name the deed of trust parties, give recordings information, describe the default and the amount due on the loan and state the trustee's or lender's intention to undertake a foreclosure sale. The notice must include in conspicuous type the following warning:

"YOU MAY LOSE YOUR PROPERTY IF YOU
DO NOT TAKE IMMEDIATE ACTION."

Advertising

The notice of default and intention to sell must be published once a week for four consecutive weeks prior to the date of the sale in a newspaper of general circulation in the county where the property is located. The final publication must be no more than ten days before the sale.

Mailing

The notice must be mailed to the borrower by certified mail to the last address the lender knows of writing ten days after recording the notice. This includes any borrower of record or of whom the lender has actual notice. The notice must also be mailed to anyone who records a Request for Notice that specifically described the mortgagee including its recording information.

Recording

The lender must record a copy of the Notice of Default and Intention to Sell.

Special Procedures - Reinstatement Rights

An appraisement of the property must be made before foreclosure day. The justice of the peace for the county in which the property is located must appoint three disinterested householders of the county where the property is located. The appraisers must take an oath that they will `well and truly view' and appraise the property that may be shown to them. The appraisers must then view and appraise the property, and then all or any two of them must write an appraisal report and deliver the same to the person holding the foreclosure sale. The person conducting the sale must make it available to any interested party. For their services, the appraiser's are paid $1 which comes from the proceeds of the foreclosure.

In any foreclosure under a mortgage or deed of trust in Arkansas, the property must sell for not less than two-thirds of the appraised value. If it does not, then it may be offered for sale within 12 months. The second sale may be to the highest bidder without reference to the appraisement.

Sale Procedures

The attorney for the mortgage or trustee may conduct the sale and act as the auctioneer. The foreclosure sale must take place at the time, date and place specified in the notice of Default and Intention to Sell, but the sale must be within certain limits.

Time

It must be held between 9:00 a.m. and 4:00 p.m. on a week day, and not on a Saturday, Sunday or legal holiday.

Place

It must be held at either the property being foreclosed on or the front door of the county courthouse where the property is located.

Manner

Any person including the mortgagee (lender) may bid at the sale, except the trustee, who may bid on the behalf of the beneficiary (lender) but not for himself or herself in deed of trust sales. The high bidder must pay the price bid at the time of sale, or within ten days. The lender may bid by canceling out what it is owed on the loan, including unpaid taxes, insurance, costs or sale and maintenance, but for cash for any higher price. The mortgage or trustee will execute and deliver a trustee's deed to the high bid purchaser.

Postponement

The sale may be postponed by public proclamation at the time, place and date last appointed for sale, up to seven days past the original date, but if for a longer time, then the whole notice procedure must be performed a second time, including the 60-day wait.

Post-Sale Procedures

The purchaser may obtain possession once the deed is recorded. The occupant of the foreclosed premises becomes a tenant at sufferance against whom the purchases may use a writ of assistance, if necessary, to effect the eviction.

The proceeds of the sale will be applied as follows: (1) to pay the expenses of the sale; (2) to the debt owed; (3) to any recorded lien holders in the order of their priority, and; (4) to the original borrower.

Within ten days after the sale, the trustee or mortgagee will file an affidavit stating that a sale was made in accordance with the law, including the time, place and date of the sale, and the purchase price. A copy must be mailed to all persons entitled to receive notice of the foreclosure as described earlier.

Judicial Foreclosure

In judicial foreclosure, a court decrees the amount of the indebtedness of the borrower and gives him or her a short time to pay. If the borrower fails to pay within that time, then the clerk of the court, as commissioner, advertises the property for sale. Sales of real property under court order will be on a credit of not less than three months not more than six months, or on installments to not more than four months credit overall. To secure payment, a lien will be retained on the property for its price. The purchaser must further give a bond with surety for the purchase price. The lender may bid at the sale. The lender can bid by crediting a portion (or all) of the amount the court found was owed to the lender against the sales price of the property purchased at the foreclosure sale. Of the real estate does not sell for an amount equal to what's due on the mortgage loan, then the lender may seize other property from the borrower as in an ordinary judgment.

Deficiency

The lender may sue the borrower for a deficiency within 12 months of a power of sale clause foreclosure. The lender may sue for (1) the difference between the foreclosure sale price and the balance due on the loan, or (2) the balance due on the loan minus the fair market value of the property, whichever is less.

Redemption

When property is sold under a chancery court order, the borrower has one year from the date of the sale to redeem the property by payment of the amount for which the property was sold plus interest. However, the mortgagor may waive the right of redemption in a mortgage or deed of trust. In the case of a deed of trust or mortgagee's sale under a power of sale clause, as described earlier, the borrower is not entitled to a right of redemption.

California

Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: Yes

Non-judicial Sale

Typically, a title insurance company is named as the trustee to arrange the sale of the real estate.

California is famous for its one-action rule, in which a lender must carefully elect one action to take against the borrower if the borrower defaults. If the lender forecloses the deed of trust out of court, the lender has chosen one action and may not bring a lawsuit to recover a deficiency, which would be a second action. If the lender chooses to sue the borrower and obtain both a foreclosure order, and if the proceeds of the judicial sale of the real estate are not sufficient to repay the loan balance, then a deficiency for the balance. Such a suit is permitted as the lender's one action.

California lenders rarely elect judicial foreclosures.

Preliminary Notice: Non-judicial

Notice of Sale

The notice of sale must contain the name, street address and phone number of the trustee conducting the sale and the original trustor, along with a statement warning borrowers that their property is about to be lost at a public foreclosure sale and to contact a lawyer for an explanation.

The notice must give the street address. If no street address exists, the notice must state the address of the beneficiary from whom a set of directions to the property may be obtained if they are requested in writing within ten days from the first publications of the foreclosure notice.

Advertising

A copy of the notice of sale must be posted in a conspicuous place on the property to be sold at least 20 days before the sale. If access to the property is restricted by means of a central guard gate, then the notice must be posted on the guard gate. A copy of the notice must be posted at one public place in the city where the property is to be sold (or judicial district in rural areas) at least 20 days before the sale.

Recording

A notice of trustee sale must be recorded at least 14 days before the sale.

Mailing

A notice of trustee sale must be mailed by certified mail, return receipt requested, 20 days before the foreclosure sale to the borrower, to anyone who requests notice or recorded a request and to the trustors, beneficiaries or parties at interest.

Sale Procedures: Non-judicial

Time

All sales under a power of sale in a deed of trust will be made between the hours of 9:00 a.m. and 5:00 p.m. on any business day, Monday through Friday, at the time specified in the notice of trustee sale.

Place

The sale shall commence at the location specified in the notice of sale.

Manner

The sale must be made a public auction to the highest bidder. The trustee has the right to require every bidder to show evidence of ability to pay the full bid in cash, cashier's check or certain bank checks. Each bid is by law an irrevocable offer to purchase. However, a higher bid cancels an earlier bid. It is unlawful and a criminal offense (a fine of $10,000 or up to one year in jail) to offer anyone consideration not to bid, or to fix or restrain the bidding process in any manner.

Postponement

Sales may be postponed by announcement at the time and location specified for the intended sale. The borrower may postpone the sale in order to obtain cash, provided the written request for postponement identifies source from which the funds are to be obtained, and the postponement is only for one business day. The borrower may obtain one such postponement.

Reinstatement

Debtors may reinstate up to five days before non-judicial foreclosure sale.

Junior

Junior lien holders may no longer redeem, so they may try to protect themselves by (1) advancing funds to bring the senior loan payments current, then foreclosing for the sums advanced; (2) bidding at the foreclosure sale so the price will be sufficient to pay off the senior and the junior liens; or (3) acquire the property by bidding at the foreclosure. If the debtor has a right to redeem and does so, the junior who purchased the home must be reimbursed. Junior liens do not reattach the property if a borrower redeems a senior lien whose foreclosure extinguished the junior. This helps borrowers by encouraging the junior to bid up to the property to fair market value at the foreclosure sale, or else lose out, giving borrowers closer to fair value at sale.

Deficiency

Lenders may not seek a deficiency judgment if (1) the foreclosure is non-judicial or if (2) foreclosure is on a purchase money obligation. The same rules do not apply to guarantee or later lien holders. The lenders may seize alternative collateral. If the lender forecloses by filing a lawsuit, then the lender can obtain both a foreclosure sale order and a judgment against the borrower for a deficiency after the court-ordered sale, but only for the difference between the judgment and the fair value of the security.

Redemption

A borrower's right to redemption is terminated when a deficiency judgment is waived or prohibited. When redemption is permitted, after judicial foreclosure, only the borrower can now redeem and junior lien holders or "redemptionors" may not. When the lender is permitted to seek a deficiency, elects to pursue a deficiency and forecloses judicially, the borrower may redeem 12 months after sale, but a full credit bid by the lender cuts it to 3 months.

Colorado

When you develop a definite plan of action with well-timed, well-informed steps, you can stop the foreclosure process and save your home. We have outlined the foreclose process for the state of Colorado.

Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: Yes

Public Trustee - A Colorado Concept

In contrast to most states, where the trustee is usually the hired gun of the lender, Colorado has an impartial, accountable, "public trustee" appointed by the Governor for each county, who handles power of sale foreclosures on request. The public trustee may take only the compensation set by law. A private lender engages a public trustee by filing with the trustee two copies of a notice of election and demand for sale, the original note or a suitable bond and a mailing list of persons who must receive foreclosure notices.

Non-judicial Foreclosure

Preliminary Notices

Advertising

A notice of sale stating the time and place of the foreclosure must be advertised in accordance with the terms of the deed of trust, but under Colorado law all deeds of trust must prescribe a weekly advertising period for the notice of sale in a newspaper of general circulation, of not less than four weeks.

Recording

The public trustee must record the lender's notice of election and demand for sale.

Mailing

The public trustee must mail, within ten days after the publication of the notice of election and demand for sale, a copy of the same and a notice of sale as published in the newspaper, to the borrower and any owner or claimant of record, at the address given in the recorded instrument. The public trustee must also mail, at lease 21 days before the foreclosure sale, a notice to the borrower describing how to redeem the property.

Right-to-Cure Default

If the loan default is due to nonpayment, then the borrower can give notice of an intention to cure the default at least seven days before the foreclosure sale. The trustee must then, on request, investigate and tell the borrower the sum due on the loan. If, on or before 12:00 noon of the day before the date of the sale, the owners, parties or borrowers pay to the officer conducting the sale all delinquent principal and interest payments that are due as of the date of such payment, plus costs, expenses, late charges and attorney's fees, but not future principal (since no extra debt is allowed due to acceleration) then the foreclosure must be stopped. This right my be exercised more than one time.

Sale Procedures

Date

The foreclosure sale must be held between 45 days and 60 days after the recording of the election and demand for sale.

Place

The public trustee may conduct the sale at any door or entrance to a courthouse, not withstanding the deed of trust's provisions, or the trustee may conduct the sale at the location specified in the deed of trust.

Post-Sale Matters

The trustee will pay an excess proceeds from the foreclosure sale to creditors in order of their priority, and the balance to the grantor, who has five years to claim it. Title is conveyed by deed to the higher bidder, who may be the lender.

Deficiency

The lender may sue for a deficiency.

Redemption

The borrower has 75 days after the date of sale to redeem the premises by paying the public trustee the sum for which the property was sold, with interest. A variety of redemption periods exists for junior lien holders. Special rights exist in the case of agricultural borrowers.

Connecticut

Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: Yes

Preferred Method

Judicial foreclosure. Connecticut allows foreclosure by two strange judicial methods, strict foreclosure and decree of sale.

Strict Foreclosure

Connecticut is one of the few states that still uses strict foreclosure. In strict foreclosure, there is not foreclosure sale at all, not even at the courthouse steps. The lender must go to court and obtain a court order showing the borrower to be in default under the terms of the mortgage. At that point, title shifts to the lender. However, the borrower has a length of time set by the court to redeem the property. If the borrower fails to come up with the money during that time, then the borrower is forever barred from asserting a claim to the property and title becomes absolute in the lender. From that date, the lender has one month to record a certificate of foreclosure describing the premises, the mortgage, the foreclosure proceedings, and the date title became absolute. If the lender demands possession in the foreclosure suit, the court may issue an execution of ejectment against the person in possession of the property. Possession may also be obtained by peaceable entry, unless the mortgage says otherwise. The disadvantage to the borrower is that the lender obtains title to land that might be worth much more than what was owed on the original loan. This is fort of windfall profit for the lender.

Decree of Sale

Upon motion by any party, a court may allow a mortgage to be foreclosed by a decree of sale. In a decree of sale, the court will appoint a committee to sell the property. The court also sets the time and manner of the sale. The court further appoints three appraisers. The borrower may stop the proceedings at any time by paying the balance due on the loan. If not, the committee will make the sale. Afterwards, the sale will be ratified by the court which executes a deed to the purchaser. The grantee in the deed may obtain possession of the property by court order. A supplemental judgment can direct the distribution of the proceeds of the sale. The lender need only bring those proceeds to court which exceed the balance due on the loan, which included interests and costs.

Special Protections for Unemployed Borrowers

If a residential borrower has lived in the home as a principal residence for at least two years, and the borrower (1) has not had a foreclosure action commenced against him or her in the past seven years, and (2) is unemployed or underemployed as defined by law, then the borrower can claim protection from foreclosure under Connecticut statutes. Borrowers are underemployed or unemployed under Connecticut law if the aggregate earned income of all the homeowners of the real property during the year preceding the foreclosure was under $50,000 and less than 75 percent of the average aggregate annual income during the two years prior to one year before foreclosure.

Eligibility

A court may decide that borrowers are eligible for special protection after considering two criteria: (1) the likelihood the borrower will be able to make timely payments on a restructured mortgage by the time a restructuring period ends and the likelihood of a substantial prejudice to a lender or a subordinate lien holder due to the restructuring of the mortgage debt.

Protection from Foreclosure

Under Connecticut law borrowers can get two forms of protection: foreclosure is stopped during the restructuring period. Which may last up to six months, and borrowers can obtain court ordered restructuring of their mortgage so as to eliminate overdue payments.

Restructuring the Loan

The ceiling for restructured debt is either (1) the amount of the original debt or (2) 90 percent of the fair market value of the property as determined by an appraiser at the time of the restructure. No additional debt may be restructured. Missed payments can be added to the balance of the loan in a Connecticut restructure. However, the borrower must pay interest on the amount in arrears that is added to the loan. Interest accrues on any sums added to the old mortgage debt at the end of the restructuring period, which may be fixed or variable, depending on the original note. A composite rate must be used on fixed rate loans so that the restructured debt must pay current interest rates which the main part of the loan continues at its original rate. Such composite rates are not necessary for variable interest rate loans.

Deficiency Judgment

The strict foreclosure proceeding does not include an action against the borrower for payment, but the lender can sue the borrower directly. In an independent action brought prior to or during the strict foreclosure proceeding. Once the borrower's time limit to pay the balance due on the loan expires, the lender obtains title to the property. If the property is worth more than the balance owed on the loan, the lender cannot sue for a deficiency. Please note, the lender receives all the equity in the property without paying anything in this situation. In proceedings to foreclosure by sale rather than by strict foreclosure, additional proceedings to collect a debt from the borrower are stayed during the suit seeking a sale. If the proceeds of the sale exceed the appraised value of the property , but are not enough to pay the lender's past due loan balance, then a deficiency judgment may be rendered against the borrower. If at the court-ordered sale, the property is sold for less than the appraised value, then no other proceedings to collect the debt from the borrower may be undertaken until one-half the difference between the debt and the appraised value is subtracted from what the borrower owes the lender.

Redemption

Redemption is determined by the court in strict foreclosure. Redemption by a junior lien holder is subject to any prior liens.

Delaware

Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: No

In Delaware, if a borrower defaults, the lender can take several remedies simultaneously. The lender could sue to collect on the note and foreclose the mortgage. A lender could also sue on the note first, and pursue foreclosure later. However, the lender will only be permitted to recover the amount unpaid on the loan. Usually, the speediest process is scire facias, a procedure which contemplates a sale of the mortgaged property for a sum that will pay the balance on the loan, or a transfer of title to the lender, after the property has been exposed at a public sale, in exchange for a credit against some part of the balance on the loan, or up to the full balance owed on the loan.

Scire Facias

Scire Facias is a proceeding in which the borrower must show cause that there should be no foreclosure. Usually, upon breach of the terms of the mortgage, such as through non-payment of the note or breach of the mortgage conditions, the lender may seek a writ of scire facias from the Superior Court in the county in which the mortgaged property is located. The initial filing, which must be sworn to, consists of a Praecipe and Complaint. The Praecipe calls upon the Prothonotary to issue the writ of scire facias. The term scire facias is the name both of the writ and the proceeding it instigates. The writ is issued upon the default of the borrower in making payments or observing mortgage conditions, and requires the borrower to show cause why the mortgage should not be foreclosed and the property sold.

Once the writ is issued, it will be served upon the borrower by the sheriff. If the sheriff goes out and tries to hand the borrower the writ without success after repeated effort, which is called return non est., then a default liberari judgment may be obtained. (At least two separately issued consecutive writs must be returned non est.) If the borrower is served with the writ, it will command the borrower to appear before the court to show cause why the mortgage premises out not to be seized and sold to pay off the mortgage, with interest, or else pay off the lender's losses due to the borrower's non-performance. If the borrower fails to appear within 20 days after being served with the writ of scire facias, then the lender will obtain a default liberari judgment. Otherwise the borrower must prove why the foreclosure should not take place. Unless the court is satisfied with the explanation, the court will authorize the property to be seized to pay off the mortgage.

Preliminary Notices

Posting

Notices of the sale must be posted publicly and on the property in foreclosure at least ten days before the sale date.

Delivery

A copy of the notice must be run two weeks before the sale.

Sale Procedures

Person Conducting the Sale

The sale itself will be conducted by the sheriff.

Place of Sale

The place of sale must be either at the court house steps or at the site of the property in foreclosure.

Post-Sale Matters

The sale must be confirmed by the court. Once confirmed, no redemption is possible. A deed will be executed by the Sheriff to convey title to the purchaser. Deficiency judgments are possible, but only by a suit on the note, in addition to the scire facias.

Unusual Procedures

Since scire facias is purely a remedy at common law, equity law does not play a role in the proceedings. Although mortgages can be foreclosed by an equity suit in the Delaware Court of Chancery, this method is seldom used. Strict common law has some unusual results, however. In particular, the borrower's counterclaims will not be heard at the hearing on the scire facias, because they were not part of the original mortgage. Such counterclaims must be pursued in a separate proceeding rather than as part of the scire facias proceeding. However, all record owners acquiring title subject to the mortgage (terre-tenants) must be joined in the scire facias proceeding. Also persons who have equitable or legal interests of record, such as one pursuant to a judicial sale, must be joined. These changes were made in 1986 to correct a constitutional problem with the old procedure.

Florida

When you develop a definite plan of action with well-timed, well-informed steps, you can stop the foreclosure process and save your home. We have outlined the foreclosure process for the state of Florida.
The Process

In Florida, mortgages must be foreclosed by filing a lawsuit in court. As in any lawsuit, the borrower must be served with notice of the lawsuit and must be given an opportunity to appear and defend his or her rights. The lender will try to show that the borrower is in default, and that foreclosure is therefore necessary under Florida equity law. Florida is unusual in that the legislature has passed very few statutes regulating foreclosures. Most of the law on the subject of foreclosures in Florida is found scattered in dozens of cases. The basic statute, chapter 702.01 reads as follows:

All mortgages shall be foreclosed in equity. In a mortgage foreclosure action, the court shall sever for separate trial all counterclaims against the foreclosing mortgage. The foreclosure claim shall, if tried, be tried by the court without a jury.

Counterclaims by a borrower may be tried by a jury, but they must be tried separately from the main foreclosure lawsuit.

In Florida because the lawsuit to foreclose on a borrower is a suit in equity, it is impossible to obtain an injunction to stop what is, in essence, a court ordered sale. In addition, the court can order the sale at a low price. A sale can be set aside if there is an error in the procedure to foreclose; however, it cannot be set aside due to the low sale price. The court order commanding foreclosure will specify how the foreclosure must take place, and the foreclosure must take place on those terms.

After the sale takes place, the sale terms must be confirmed by the court that ordered the sale. If the terms of the sale order are met, title in the buyer's name can become complete by filing a certificate of title. At the discretion of the court, junior lien holders can redeem the property, up to the time of the confirmation of the sale. The equity of redemption is cut off when the sale is confirmed, but it exists prior to that time, which means the borrower can save the property from foreclosure by coming up with the money before confirmation.

Deficiency

A separate action for a deficiency must be filed within four years after the foreclosure sale.

Georgia

Judicial Foreclosure Available: Yes

Non-judicial Foreclosure Available: Yes

Preferred Method

Non judicial foreclosure through the power of sale clause in a deed of trust, mortgage or Georgia security deed is preferred.

Judicial Foreclosure

Judicial foreclosure may be done by filing a petition in Superior Court describing the case, the amount of money owed and the property to be foreclosed. Upon the filing of the petition, the court will grant a "rule" directing that the unpaid principal, interest and costs be paid to the court. The rule must be published two times per month for two months. As an alternative to publication, the notice can be served on the borrower, the borrower's agent, or the borrower's attorney, at least 30 days before the money has to be paid in court.

Non-judicial Foreclosure

Although Georgia permits non-judicial foreclosure, such as sale are in derogation of common law, and therefore, the lender can only foreclose if the terms and conditions of the loan documents are strictly observed.

Preliminary Notices

No sale is value unless the sale is advertised and conducted at the usual time, place and manner in which sheriff's sales are conducted in the county in which the real estate is located.

Mailing

A foreclosure notice must be mailed certified mail, return receipt requested to the debtor no later than 15 days prior to the date of the foreclosure sale. The time period begins the day the letter is postmarked. The notice must be mailed to the address given to the lender by written notice from the borrower. No waiver or release of the rights to notice is valid if it was signed at the same time as the original loan papers; however, a quit claim deed conveying title voluntarily in lieu of foreclosure is valid.

Advertising

The notice must be published once a week for four weeks proceeding the foreclosure day. Notice must be published in the newspaper in the county where the sheriff's sale are normally advertised.

Sale Procedures

The sale itself must be made by public auction on the first Tuesday of the month between 10:00 am and 4:00 p.m. at the courthouse.

Deficiency

Under Georgia law, a non judicial foreclosure cannot, by itself, serve as the basis to pursue a borrower for a deficiency. In order to obtain a deficiency judgment, a lender must report the sale to the Superior Court of the county in which the property is located and seek confirmation and approval of the sale within 30 days after the sale.

Confirmation and Approval of Sale, A Prerequisite to a Deficiency

The court must hold a hearing before confirming or approving the sale. The borrower must be given notice at least five days before the hearing. The borrower must ordinarily be served personally with the notice, although service by mail can be recognized if the borrower failed to allege non-receipt of the notice. Before the court can issue an order confirming and approving the sale, the court will require evidence that the foreclosure sale price was at least equal to the market value of the property. If it was not, then the court may not confirm or approve the sale. Also, at the hearing, the court will pass judgment on the legality of the notice, advertisement and "regularity" of the foreclosure sale. The court may order a new sale of the property for good cause.

Hawaii

Idaho

When you develop a definite plan of action with well-timed, well-informed steps, you can stop the foreclosure process and save your home. We have outlined the foreclosure process for the state of Idaho.

Preferred Method of Foreclosure:

Non-judicial

Idaho permits non-judicial foreclosure through a owner of sale clause in a deed of trust. If the borrower goes into default, the property may be sold by giving the borrower the proper notice.

Preliminary Notice

Contents

The foreclosure notice must describe the nature of the default and the lender's election to sell. The notice must set the date, time, place and basis for the sale.

Recording

The notice must be recorded.

Mailing

The notice must be sent to anyone who requests a copy. The borrower must be given a copy at least 120 days in advance of the sale. Lessees or occupants must also be given the same notice as the borrower.

Publication

The notice must be published in the newspapers in the county where the property is located at least once a week for four consecutive weeks. The final ad must be run not less that 30 days in advance of the foreclosure. The published notice must contact a legal description of the property, its street address and the name and phone number of someone who can give directions.

Cure by Borrower or Other Purchasers

Within 15 days of the date of recording of the notice of default, a junior lien holder or the borrower can pay the amount due on the loan and a trustee's fee if the default is cured prior to the first newspaper publication of the sale.

Sale Procedures

The foreclosure sale must take place at the time called for in the notice, unless the sale is postponed. The sale can be postponed by the lender to a new time and place, but not later than 30 days after the original date. Multiple postponements are possible. The proceeds of the sale must go first to the lender, then to any interior recorded lien holders, then to the borrower.

Deficiency

The lender can sue the borrower in a separate lawsuit for a deficiency within three months following the sale for whatever sum remains unpaid on the mortgage, provided the balance exceeds the fair market value (or such reasonable value as the court finds) of the property at the time of the foreclosure.

Redemption

The real estate may be redeemed by the borrower up to one year after the sale if more than 20 acres are involved, or six months for land parcels of less than 20 acres.

Illinois

The Process

Iowa law places strong restraints on foreclosures, particularly on loans for agricultural property. In Iowa, many special notices must be given to borrowers advising them of their rights. Lenders are not always permitted to foreclose at all. For example, a court may declare a moratorium on foreclosures due to an economic emergency. There are basically two ways to foreclose on nonagricultural property in Iowa:

the alternative non-judicial voluntary foreclosure procedure, in which the borrower deeds the property over to the lender and
filing a lawsuit and obtaining judicial foreclosure under equity law.
Alternative Non-judicial Voluntary Foreclosure

If both the lender and the borrower agree in writing, then a real estate mortgage can be foreclosed voluntarily as follows:

The borrower conveys title of the property to the lender.

The lender accepts title and waives any rights to sue the borrower for any other claim, such as a deficiency.

The lender gets immediate access to the property. The lender and borrower record a statement, signed by both parties that they have elected voluntary foreclosure. The lender sends by certified mail, notice of the voluntary foreclosure to all junior lien holders, who have 30 days to exercise any rights of redemption they may have. The borrower must sign a statutory voluntary foreclosure form.

The form explains that by signing it the borrower surrenders any statutory right to reclaim the property within one year and the right to continue to occupy the property. However, the form states the borrower cannot be sued for a deficiency if the form is signed. It also advises the borrower to seek legal counsel concerning all the competing rights. The form also provides for its own cancellation within five days.

If a borrower agrees to the voluntary redemption procedure, the lender may not report the borrower to the credit bureau as being delinquent on the loan, but the lender may state that the voluntary foreclosure procedure was used.

Judicial Foreclosure

Other than the voluntary foreclosure procedure described immediately above, the only way a lender can foreclose a deed of trust or a mortgage on Iowa real estate is by a lawsuit in court, governed by principles of equity law. The lender must choose either to sue on the note or sue to foreclose the mortgage, but not both. When a mortgage or deed of trust is foreclosed, the court will render judgment for the entire amount due, and direct the sale of the mortgaged property, or as much as is necessary. The lender may sue a borrower for a foreclosure with or without redemption, but the latter requires the borrower to sign a waiver.

Foreclosure with Redemption The borrower retains a right to redeem the property after the sale, unless the lender has chosen to sue for foreclosure without redemption.

Foreclosure without Redemption In the event that a lender undertakes foreclosure without redemption, neither the borrower nor junior lien holders have rights to redeem. However, if the borrower bids an amount equal to the amount owed on the loan at the foreclosure sale, then the borrower gets the property regardless of the fact that junior lien holders might bid more at the sale. In foreclosure without redemption, the first page of the lender's petition to foreclose the mortgage must contain a notice, in capital letters of the same size as the rest of the petition warning the borrower that the lender has elected foreclosure without redemption. This means that the sale will occur promptly unless a written demand is filed with the court to delay the sale. If the demand is filed, the sale of a principal residence will be delayed 12 months from the entry of judgment. (Sale is delayed two months on other properties and six months on the residence if the lender's lawsuit waives recovery of a deficiency.) However, if the borrower files such a demand for delay, then the lender can sue the borrower for a deficiency. If no demand for delay is filed, the lender cannot sue for a deficiency. Either way, however, once the sale takes place, the buyer at the foreclosure sale can take possession immediately.

Right to Cure

In Iowa a borrower has a general right to effect cure by making up missed payments prior to foreclosure. The lender must send the borrower a notice of the borrower's rights to cure as a prerequisite to foreclosure.

Before filing a lawsuit or taking any action to foreclose on a borrower's one- or two-family home, any regular lender, such as a bank, S&L or mortgage company, who believes in good faith that a borrower is in default on a deed of trust or mortgage on a homestead, must give the borrower a notice of the right-to-cure default. Individuals who are lenders do not have to give the notice.

Mailing of Notice of Right to Cure

Regular lenders must give the notice by direct delivery or by mail to the borrower's residence. The notice does not have to be given in nonresidential situations.

Contents of Notice of Right to Cure

The notice must state

the name, address and phone number of the creditor to whom payment is to be made,
a brief description of the obligation secured by the mortgage or deed of trust,
that the borrower has the right to cure the default,
the nature of the alleged default, and the total payment, in an itemized form, of deferral charges (late fees), the amount due and any other action needed to cure the default and
the exact date by which the amount must be paid or an action must be performed.
Failure to Cure by Proper Times

If the borrower fails to perform in the proper manner by the proper date, then the notice must also state that the lender can initiate foreclosure. Once notice is given. the following timetable applies:

' 30 Days

The borrower must be given no less than 30 days to cure the default by tendering (sending) either

a sum equal to all the missed payments due at the time of the tender, or
the amount stated in the notice of the right to cure, whichever is less, or by tendering any other performance necessary to cure a default as described in the notice of right to cure.
' Such Extra Time as the Lender Gives

A lender may give more than 30 days without waiving or losing the right to commence foreclosure due to an uncured default.

365 Days

A borrower has a right to cure the default by bringing in the payments, unless the creditor has given the borrower a notice of the right to cure once before within the past 365 days. Curing the default restores a borrower's rights under a mortgage or a deed.

Special Protection Farm Foreclosure

Due to the bad luck Iowa's farmers have sometimes experienced, the state legislature has passed many special laws regulating farm foreclosures. Iowa's legal protections against foreclosure of farmers are truly exceptional compared to any other state. The procedures to foreclose on agricultural property in Iowa are even more extensive. The lender must attempt mediation on land used as an individual's farm, family farm, or a qualified farm corporation through the Farm Mediation Service. A notice and initial meeting must be held within 42 days of a request by the farmer. The farmer also has a first right of refusal when agricultural property is sold at execution. There are special deed in lieu procedures for agricultural properties. In the special deed in lieu arrangement, the lender takes title, but the farmer can lease the land back from the lender, and repurchase the land within five years. The farmer may separately redeem the house and up to 40 acres from the rest of the land even after a foreclosure. Iowa's farmers should beat a path to a lawyer's office before giving up any effort to fight foreclosure. Iowa's procedures to protect against foreclosure are extensive enough that if a farmer has the will to hold on, there may often be a legal way to do so.

Regular Foreclosure

After fulfilling the vast number of prerequisites required under Iowa law, as previously described, a lender may obtain a judgment against the borrower for the full amount of the balance due on the loan. The real estate may then be sold under a general execution sale. Remember, the lender may not sue both for foreclosure and to collect on the note. So if the lender sues on the note, then, if and only if the sum found to be due is sufficient, the real estate can be sold to pay off the judgment. The sales are proper sheriff's sales. Once the property is sold, it may eliminate the loan balance or reduce it. If some part of the loan balance is left unpaid, the lender can still try to collect that part. Note that Iowa banned deficiencies on agricultural foreclosures until July 1, 1991. Also, the judgment is only good for two years and may not

Moratorium

If a borrower goes into default and is sued by the lender, the borrower may file an answer admitting a default in whole or in part, and then ask for a moratorium if the default was due to such circumstances as a crop failure due to drought, flood, heat, hail, storm or other climatic condition, or due to infestation of pests. Under such circumstances, the court can extend the foreclosure date for up to one full year. The court must appoint a receiver to take care of the property in the meantime, and the original borrower is to be given preference over other choices as receiver. The receiver may apply rents and income in a statutorily defined order.

The governor of Iowa may declare a state of economic emergency, applicable to various types of property, such as agricultural property, or to be applied to all types of property. The declaration makes such property eligible for a moratorium continuance, which may last as long as one year. However, a lender can apply to the court and show good faith efforts to restructure the debt, and show the financial difficulties the lender is faced with if foreclosure is not granted. The lender may also show that the borrower has not paid interest on the loan. Upon weighing all these competing considerations, a court may terminate the moratorium which would allow the foreclosure to go forward. Only one continuance can be granted per mortgage instrument under the governor's moratorium provisions.

Indiana

The Process

In Indiana, a lender can file a lawsuit to foreclose on real estate. The date the mortgage was signed determines the length of time it takes between the filing of the lawsuit and the foreclosure sale. Here are the applicable waiting periods:

Before January 1, 1958:
12 months
Between January 1,1958-
July 1,1975
6 months
After July 1, 1975
3 months

Procedure

If the owner files a waiver of the time limit with the court clerk, which has been signed by the lender (or judgment holder), then the foreclosure sale process may begin without the need to delay 3 to 12 months. If such a waiver is used however, the lender loses the right to sue the borrower for a deficiency.

The foreclosure sale process involves publishing an ad once a week for three weeks. The first ad must be run 30 days before the sale. At the time the first ad is run, each owner must be served with notice of the foreclosure sale by the sheriff. The sheriff conveys title by a deed given immediately after the sale. The owner may reside in the property, rent free, until the foreclosure sale, provided the owner is not committing waste, which means tearing up the property.

Redemption

There is no right to redemption after the foreclosure sale. The waiting precedes the sale. If the property is not a principal residence, a receiver can be appointed to take charge of it.

Iowa

Kansas

Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: No

Preliminary Notices

Advertising Notice of the time and place of sale must be advertised once a week for three consecutive weeks, with the last publication no more than 14 and no less than 7 days before the foreclosure day.

Mailing

Notice must be sent to the defaulting borrower within five days of the first ad.

Sale Procedures

Place

The sale must be at the courthouse, although the district judge may order the sale on the premises or at another location.

Manner

The sale is by public auction to the highest bidder. The sheriff will at once give the buyer at the foreclosure sale a certificate of purchase. The certificate of purchase is all the buyer gets until the borrower's redemption rights expire.

Confirmation

The foreclosure sale must be confirmed by the court after the sale. The court has discretion to refuse to honor the sale and require a minimum bid or force the crediting of the market value against what was owed on the loan. Once confirmed, a sheriff's deed can be issued and it will vest good and perfect title in the foreclosure buyer. However, the court may specify as a condition of confirmation that the redemption period may run first, which is 12 months unless reduced.

Special Procedures

A judgment can stay un-enforced up to five years, at which point it becomes dormant, but is subject to revival for another two years. Afterward the judgment is barred from enforcement and the court records must reflect that fact.

Deficiency

A deficiency judgment may be obtained for the difference between the foreclosure sale price and the amount due on the loan. Deficiencies are common. However, the court may refuse to confirm a sale where the price is not equal to the judgment, which helps prevent abusive deficiency judgments.

Redemption

The borrower can redeem any real property sold at foreclosure at any time up to 12 months from the date of sale by paying the holder of the certificate of purchase the purchase price plus costs and interest. If the judge finds the property is abandoned or not occupied in good faith, then the redemption period is six months. Lien creditors must undertake redemption within three months. The former borrower's redemption period may be reduced if the lien is only one-third of the original indebtedness. The one year goes down to six months. However, the court may conduct a hearing on market value, and if the debt is one third of the court-perceived market value, then 12 months for redemption may be allowed before the court will confirm the sale.

Kentucky

Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: Effectively, no

Kentucky has a rigid rule on foreclosures: no out-of-court foreclosures are valid other than voluntary sales by the borrower. A deed of trust sale, a power of sale clause in a mortgage or sale by a trustee will not work in Kentucky. The only forced foreclosure sale that is permitted is one pursuant to a court order. Also, common law or strict foreclosure is forbidden in Kentucky. The lender must be prepared to engage in litigation to foreclose in the state of Kentucky. Often the lender can win by default or summary judgment but, if not, the case is tried to a jury.

Possession

On the other hand, if the borrower abandons the home, the lender may obtain possession of the property once the borrower goes into default. The lender may operate the property for the benefit of the borrower. Any income produced goes to the lender, not the borrower, but will be credited toward paying off what the borrower owes. If the borrower does not abandon the home, the lender may not take possession until the court confirms the foreclosure sale.

Redemption and Appraisal

Prior to a foreclosure sale, the property must be appraised. If the actual foreclosure sale price is less than two-thirds of the appraised value, then for one year after the sale the borrower has the right to redeem the property from the buyer for the buyer's purchase price plus ten percent interest. Interestingly, the borrower's right to redeem may also be sold.

Deficiency Judgment

In Kentucky, it is possible to obtain a deficiency judgment against the borrower for the difference between the amount the borrower owed on the old loan and the foreclosure sale price, but only if the borrower was personally served with the lawsuit, or failed to answer.

Louisiana

Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: No

In contrast to the laws of most of the states, which are based on the English common-law system, Louisiana laws are based on the civil law system used throughout most of Europe and much of the world. Under Louisiana's system of laws, judicial foreclosure is the rule and deed of trust or power of sale type sales are not permitted (though Roman law itself would have allowed it).

Two Methods of Judicial Foreclosure Louisiana's two foreclosure methods are (1) ordinary process and (2) executory process. Ordinary process operates as an ordinary lawsuit in Louisiana.

Executory Process

This is an accelerated procedure of a summary nature by which the lender uses a mortgage that includes an "authentic act that imparts a confession of judgment." In practice this means the mortgage is signed before a notary and two witnesses. The borrower declares and acknowledges the obligations under the mortgage. Later, when the lender wants to foreclose, the lender files a suit in court, and attaches the original note and a certified copy of the mortgage. The court can then enter an order for the issuance of executory process.

In the past, executory process skipped citation, contradictory hearings and judgments. The problem with such procedures in the past has been a constitutional one. The U.S. Supreme Court, in the famous case of Fuentes V Shevin 1407 U.S. 67 (1972), held that the defendant in any lawsuit must be given notice of the suit and an opportunity to be heard in court. Louisiana's current executory process procedures barely comply with these requirements. Once executory process issues, the borrower is served with a demand for payments that are due and unpaid on the loan. The borrower has three days to come up with the money. If the borrower doesn't pay, the court will issue a writ of seizure and sale, armed with which, the sheriff will seize the real estate. The borrower gets a notice of seizure. The property is then advertised once a week for 30 days. The sheriff will then sell the property at auction to pay down or pay off the loan. Executory process is harsh and exacting. Executory process would allow a lender to seize possession of the property prior to reselling it at a foreclosure sale.

Ordinary Process In ordinary process the lender files a lawsuit to foreclose the mortgage. The borrower is served as a regular defendant in the lawsuit and the procedures for an ordinary lawsuit are followed. If the borrower loses, the court will enter judgment in favor of the lender. After that, a writ of fieri facias will be issued directing the property to be sold to pay off the loan.

Deficiency Judgments

The lender must obtain a deficiency judgment by an ordinary lawsuit, either in conjunction with executory process or as a separate suit. A deficiency cannot be obtained by executory process alone. Executory process will allow seizure and sale of the property, but not a personal judgment.

Redemption

Louisiana does not recognize a right of redemption..

Maine

Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: No

Maine offers several methods of foreclosure. Most residential mortgage foreclosures are done by filing a lawsuit in the District or Superior Court. On the other hand, a foreclosure against a corporation may be done by a power of sale procedure. Otherwise, Maine still maintains the common-law strict foreclosure doctrine in which the lender owns the property and the borrower loses any rights to the property by breaking a condition in the mortgage, such as failing to make the loan payment. Although Maine is a strict foreclosure state, it nevertheless permits a lawsuit to be filed along the form of a bill in equity, which would ask the court to cut off any further rights the borrower had to the property. This would be done only in special cases. Generally, foreclosures in Maine are by strict foreclosure, which, for convenience, can be divided into those circumstances in which the lender seeks possession as part of the foreclosure, and those situations where the lender does not seek possession as part of the foreclosure.

Strict Foreclosure with Possession

In Maine, the lender may want to take over the borrower's old property. After regaining title by legal means, the lender could sell the property at a later date, without giving the borrower the benefit of any excess the lender gets out of the sale over and above what the borrower owed on the old loan. Alternatively, the lender could simply keep the property and rent it out. In sum, strict foreclosure allows the lender to become the owner, pure and simple. To become the owner through strict foreclosure, however, the lender must follow some specialized procedures. In particular, the lender must obtain possession of the property and hold it throughout the redemption period, which is one year on pre-1975 mortgages and three months on post-1975 mortgages.

In Maine, there are three methods for the lender to regain possession as part of the strict foreclosure process:

A lender can obtain a writ of possession (which authorizes the sheriff to throw the borrower out) from a court by filing a lawsuit that asks for the writ as part of a conditional judgment.
The lender can enter the property and take possession if the borrower consented to it in writing.
The lender may enter the premises peacefully, openly and without opposition, in the presence of two witnesses.
Strict Foreclosure Without Possession

In Maine, a lender can foreclose the borrower's rights to the property without regaining possession at the time of foreclosure by arranging to sell the borrower's property. Initially, the lender files a lawsuit and wins a judgment that the borrower owes the money; then the lender must wait until the end of the redemption period, as described previously. At the end of the redemption period, the lender will sell the property by a special procedure.

The procedure is to publish public notice of the impending foreclosure for three successive weeks in a newspaper of general circulation in the county where the land is located. The notice should state that the lender is claiming the property due to a breach of the mortgage conditions (such as nonpayment of the loan) and give a description of the property, the date of the mortgage and the nature of the breach. A copy of the printed notice and the name and date of the newspaper in which it was last published must be recorded within 30 days of the last publication of the notice. Alternatively, an attested (sworn) copy of the printed notice may be served on the borrower by the sheriff, and a copy of the notice and the sheriff's return (indicating that it was served) may be recorded within 30 days after service.

The foreclosure sale must take place no less than 30 days and no more than 45 days after the initial publication of notice. The property must be sold at public sale to the highest bidder, which may be the lender or anyone else. At the end of the sale, the sales costs are deducted and the lender must disburse the remaining money in accordance with the foreclosure judgment. Junior lien holders should already have been joined when the foreclosure suit was first filed, so they may get some part of the proceeds. Any surplus proceeds from the sale must be paid to the borrower. The borrower may contest the accounting within 30 days after the sale, but the high bidder at the foreclosure sale will still retain title.

Deficiency

Any deficiency based on the foreclosure sale is limited to the difference between the fair market value of the property at the time of the foreclosure, as established by an appraisal, and the amount of money the court found the lender was still owed on the loan, as set forth in the court's final judgment.

Redemption

Maine offers the borrower a fairly powerful right of redemption, which is the right to get the property back after foreclosure by coming up with the loan money. There are two redemption time periods:

Pro-October 1, 1975, mortgages: one year
Post-October 1, 1975, mortgages: three months
The time period begins once the lender wins a judgment in the foreclosure lawsuit. The borrower may redeem the property by paying off the loan. The Maine statutes cannot shorten the one-year time period on pre-1975 mortgages be cause to do so would violate the Maine State Constitution by impairing the existing provisions of a contract.

Waiver

Maine has a waiver procedure that can be deadly to the lender and helpful to the borrower. If the lender accepts money or anything of value on the mortgage debt after the foreclosure has begun and before the redemption time period has expired, then the lender waives the foreclosure procedure. However, the lender may receive income from the property after properly taking possession without triggering a waiver.

Maryland

Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: No (but assent to decree is allowed)

Maryland offers two basic methods of foreclosure:

power of sale foreclosure, in which the lender or another person named in the mortgage or deed of trust, may sell the property and
assent to decree foreclosure, in which the borrower agrees to permit the court to order foreclosure.
In either case, however, the lender must file a lawsuit in court to foreclose. The same is true if the mortgage instrument lacks either a power of sale clause, or an assent to decree clause, but in that event, the lawsuit will be more complicated.

When the mortgage contains a power of sale or assent to decree clause, and if 25 percent of the involved lenders (as measured by the percentage of the total dollars of mortgage debt against the property) consent or make application for sale, then no service of process, answer or hearing is required. This simplifies the lawsuit. On the other hand, if the mortgage contains neither a consent to a decree clause nor a power of sale clause, or if a foreclosure sale is desired prior to the court's final decree, then there must be service of process, an answer and a hearing. However, in the latter case, 25 percent of the lenders do not have to join in filing the initial lawsuit.

Power of Sale Foreclosure

Power of sale clause foreclosures must be done under court supervision in Maryland. A person desiring foreclosure must file a lawsuit asking for foreclosure pursuant to the power of sale clause. The lender must do the following:

Include in the lawsuit paperwork a sworn statement of the amount of the mortgage debt and a certified copy of the mortgage.
Post bond for the amount approved by the clerk.
Publish notice of the time, place and terms of the sale once a week for three weeks prior to the sale, with at least 15 days' notice of the foreclosure sale.
Mail the foreclosure notice by certified mail, return receipt requested, to the borrower no less than 10 and no more than 30 days before sale.
The notice must also be mailed to the present owner and holder of any junior mortgage or other lien that has been recorded who also recorded a request for notice.
Assent To Decree Foreclosure

Under an assent to decree foreclosure, the lender must file a lawsuit in court to foreclose. The court will then enter a decree ordering the property to be sold and appoint the trustee to conduct the sale. The trustee must post a bond and sell the property according to the terms fixed by the court. The court will later confirm the sale.

Deficiency

In Maryland a deficiency judgment may be obtained if the lender makes a motion for it within three years after the accounting before the foreclosure is complete.

Redemption

Maryland foreclosure proceedings take place as an action under equity law. Maryland has not seen fit to establish a specific time limit on how long the borrower has to wait to redeem real estate lost in foreclosure. However, the Doctrine of Laches prevents this time period from being unreasonably long.

Massachusetts

The Process

In Massachusetts, there are two methods by which a mortgage may be foreclosed:

the lender may enter and take possession of the property by several alternative means, in which case the lender's ownership can become final after three years, and
the lender may complete a non-judicial sale under a power of sale clause.
The first method, entry and possession, is seldom used as the primary means of foreclosure. Instead it is used as a backup in case of technical error in non-judicial sale procedures. The first method is essentially a variation on the strict foreclosure theme. The second method, a foreclosure sale under a power of sale clause, is the usual procedure. The power of sale foreclosure takes place out of court. In spite of the fact that the power of sale foreclosure is conducted out of court, it is nevertheless customary to file a lawsuit before attempting such a sale in order to make sure that the federal Soldier and Sailor's Relief Act does not apply to the borrower's situation.

Entry and Possession Procedures

A lender can foreclose in Massachusetts by lawfully taking possession of the premises and then waiting three years for title to become final in the name of the lender. Lawful recovery of possession can be done by several alternative means:

file a lawsuit and obtain a court order giving the lender possession,
enter peaceably and take possession or
obtain the borrower's proper consent to entry.
The first method consists of filing a lawsuit to recover possession. The lender's lawsuit must allege that there was a breach of a condition in the mortgage, such as failing to pay the loan. If so, the court may render a conditional judgment giving the lender possession. The court will also grant a writ of entry which will permit eviction of the borrower. However, the borrower may recover possession within two months by paying the amount due under the mortgage or correcting any other breach of the mortgage. Unless the borrower can come up with enough money to pay off the mortgage within three years, however, the lender's ownership becomes final and the borrower's right to redeem the property is cut off.

The second method the lender can use to recover possession lawfully is for the lender to openly and peaceably enter the mortgaged premises. Two witnesses must swear that the entry was proper. Once in possession, the lender has to wait three years for full title.

The third method the lender can use to recover possession is to obtain the borrower's consent. The borrower must sign and record a written memorandum to the mortgage deed. The recording must be done within 30 days from the signing. Once again, the lender must wait three years for full title under this method.

During the time the lender obtains possession pending foreclosure, the lender must account for rents and profits. The lender may deduct the costs of reasonable repairs and improvements.

Power of Sale Clause Foreclosure

In Massachusetts the usual method of foreclosure is through sale under a power of sale clause in the mortgage. The sale must be conducted in accordance with the requirements specified in the power of sale clause. Notice of the foreclosure must be published once a week for three weeks in a newspaper of general circulation in the town where the land is located. The first publication must be at least 21 days before sale. Notice must also be sent by registered mail to any owner whose interest was recorded as of 30 days prior to the sale. The actual date of mailing must be at least 14 days prior to the foreclosure sale.

In Massachusetts there is an exhaustive list of potential addresses to which the lender must mail the foreclosure notice, the purpose of which is to make sure the borrower gets a copy of the notice, if it is at all possible. Initially the lender should mail the notice to the address found in the registered land records, or if none is found, then to the last known address appearing in the lender's records, or if none is found, then to the address on the deed or probate petition. If the address is still not found, then it should be mailed to the last address to which a tax bill was sent any time within the previous three years. If that address can not be found, then to any address shown in the deed or documentation for any other land owned by the same owner. Nevertheless, there is no requirement for the borrower to actually receive the notice, merely for the lender to make a diligent effort to locate the borrower. Notice should also be sent to any junior lien holders.

The actual sale must be conducted at the date, time and place specified in the notice. The sale will be made to the highest bidder. Within 30 days after sale, the person selling the property at foreclosure must record a copy of the notice of sale and an affidavit that the foreclosure sale was properly conducted. Any lien or encumbrance on the property that was not part of the mortgage that was foreclosed on and not included in the auctioneer's bargain remains intact and can affect the title to the property after the foreclosure sale. If there is any money left from the foreclosure sale after paying off the lender, the surplus goes to the borrower. A proper sale prevents the borrower from exercising any right to reclaim the property through redemption.

If a suit in equity is filed to clear up problems that could result from the Soldier and Sailor's Relief Act of 1940, service is considered sufficient if the above described notices were published 21 days before the return day and mailed 14 days before the return day for the lawsuit. The return day is the day by which the lawsuit must be answered.

Deficiency

If the foreclosure sale proceeds are not enough to pay off the lender, then the borrower is liable for any deficiency. However, the statutory notice of intention to foreclose must have been sent at least 21 days before the sale. Furthermore, the affidavit that the sale was complete must be on record 30 days after the sale. Otherwise, no deficiency can be obtained. The statute of limitations on deficiency judgments is two years after the date of foreclosure or two years after the loan payments were accelerated and the loan's unpaid balance was made due entirely. If there was no foreclosure sale under a power of sale clause, and the lender attempts to sue the borrower on the theory that the value of the real estate the lender obtained at foreclosure was less than the balance due on the loan, then the borrower has a right to bring a suit for redemption within one year after recovery under such a judgment.

Redemption

The basic rule in Massachusetts is that the foreclosure under a properly conducted power of sale clause cuts off the borrower's right to redeem. The sale must be conducted in good faith and the lender must use due diligence to comply with the statutory requirements for a power of sale foreclosure, as previously outlined.

Interestingly, however, the borrower may use the right of redemption as a vehicle for slowing down a foreclosure sale, even though the lender is attempting to foreclose under a power of sale clause, which normally cuts off the right of redemption. A borrower may bring a suit to redeem the property before the first notice of sale is published. Such a suit will delay the foreclosure sale. The court must determine the amount due under the mortgage on which conditions remain unperformed such that if the amount is paid or the conditions are performed, the borrower will have a right to redeem. The court can specify a time period and manner for payment or performance, and if the borrower complies with the court's specified conditions, the borrower will have a right to discharge the mortgage and receive a decree regaining possession- If the borrower fails to perform by the time and in the manner specified by the court, the lender can proceed to mail and publish the foreclosure notices (14 days and 21 days, respectively) and then hold the foreclosure sale.

The Massachusetts Uniform Fraudulent Conveyance Act and Bankruptcy

The Massachusetts bankruptcy courts have shown a particular willingness to invalidate foreclosure sales. Because of this propensity, numerous additional steps should be taken if a lender forecloses in Massachusetts. The U.S. bankruptcy courts for Massachusetts have ruled that all the statutory procedures outlined above may be insufficient to guard against invalidation of the foreclosure sale if the borrower files bankruptcy after the foreclosure. If the sale took place for less than market value, it may be ruled to be a fraudulent conveyance, under section 548 of the Bankruptcy Code, which commands that reasonably equivalent value must be obtained before the foreclosure sale