Also known as: foreclosure sales · foreclosure auction
Written by attorneys · grounded in primary & secondary sources — see below
A public sale of mortgaged property conducted after default to satisfy the secured obligation. The sale terminates the mortgagor's equity of redemption and produces proceeds applied first to sale costs and the mortgage debt. Any surplus passes to junior lienholders and then to the mortgagor while any deficiency may support a personal judgment against the mortgagor unless state law prohibits or limits it.
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Fatou Fall defaulted on a mortgage held by Fulton Shipping. The foreclosure sale brought $180,000 while the debt totaled $250,000. Fulton Shipping obtained a deficiency judgment against Fatou Fall for the $70,000 difference because state law permitted it.
Frostline Textiles held an easement across land mortgaged to Foster Forge. The mortgage was recorded after the easement. When the mortgagee foreclosed and sold the land, the easement remained enforceable against the purchaser because the mortgage lacked priority over the servitude.
A judgment creditor obtained a charging order against Finn Fletcher's transferable interest in a partnership. Distributions failed to satisfy the debt within a reasonable time. The court ordered a foreclosure sale of the transferable interest. The buyer received only the economic rights and did not become a partner.
Felicia Fuentes lost her home at a foreclosure sale. State law granted a six-month redemption period. Felicia Fuentes tendered the sale price plus interest and costs before the period expired. The purchaser's title remained subject to her redemption right until the period closed.
Francisco Frost defaulted on a home mortgage during an economic emergency. State legislation temporarily extended the redemption period and stayed foreclosure sales. The mortgagee could not complete the sale until the statutory delay expired.
Floyd Franklin's property faced foreclosure after an ex parte proceeding. He argued that the lack of prior notice violated due process. The court examined whether the foreclosure procedures provided adequate safeguards before depriving him of the property.
The surplus is applied to junior liens in order of priority before any remainder reaches the mortgagor. The purchaser at the sale takes the property free of the foreclosed mortgage but subject to any senior liens that were not foreclosed.
No. An easement created before the mortgage survives the foreclosure sale because the mortgagee lacked priority over the servitude. The purchaser takes subject to the easement.
…Syllabus The Minnesota Mortgage Moratorium Law, which authorized the state courts to extend the period of redemption from foreclosure sales for a limited time during the economic emergency of the Great Depression, did not violate the Contracts Clause of the Federal Constitution (Art. I, § 10), as the legislation was a…
…Majority opinion Opinion of Justice Gants After foreclosing on two properties and purchasing the properties back at the foreclosure sales
…loan approach, the presumptive contract rate approach improperly focuses on the creditor's potential use of the proceeds of a foreclosure sale
No. The purchaser obtains only the transferable interest and does not become a partner. The former partner loses all economic rights in the partnership.
Statutory redemption arises after the foreclosure sale and allows the mortgagor to repurchase the property by paying the sale price plus interest and costs within a set period. The equity of redemption ends at the foreclosure sale.
Yes. Legislation that extends redemption periods and stays sales for a limited time has been upheld when it addresses a public emergency and provides reasonable conditions such as payment of reasonable rental value.
A foreclosure that deprives a person of property must afford adequate notice and an opportunity to be heard. Ex parte procedures that lack sufficient safeguards may violate due process.