Also known as: foreclosure sale · foreclosures sale · foreclosure's sale · foreclosure auction · sheriff's sale
Written by attorneys · grounded in primary & secondary sources — see below
A public auction or other sale of property subject to a mortgage or lien conducted to generate proceeds that satisfy the secured debt and related costs. When the sale price falls short of the debt the mortgagee may obtain a deficiency judgment against the mortgagor unless state law prohibits or limits that recovery. When the sale price exceeds the debt and costs the surplus passes first to junior lienholders in order of priority and then to the mortgagor.
Francois Fortier borrowed from Fulton Shipping on a note secured by his warehouse. After default Fulton accelerated and sold the property at foreclosure for far less than the balance owed. Fulton then sued Fortier personally for the shortfall. The court entered a deficiency judgment because state law permitted recovery of the difference between the debt and the sale price.
Felicia Fuentes granted an easement across her land to Freeman Engineering before granting a mortgage to Foxfire Biotech. When Foxfire later foreclosed its junior mortgage the purchaser at the sale attempted to block use of the easement. The easement remained enforceable because the mortgage lien had been created after the servitude and therefore lacked priority over it.
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Forrest Falconer obtained a money judgment against a partner in Fairview Manufacturing. After distributions under the charging order proved insufficient the court ordered foreclosure of the lien on the partner's transferable interest. The buyer at the sale received only the economic rights to distributions and did not become a partner in the firm.
Francesca Fiore's home was sold at foreclosure to satisfy a senior mortgage. Within the statutory period Fiore tendered the sale price plus interest and costs to the purchaser. The purchaser conveyed the property back to Fiore because state law granted the mortgagor a post-sale right of redemption.
Francisco Frost defaulted on a home mortgage during a statewide economic emergency. The state legislature enacted a temporary moratorium that postponed foreclosure sales and extended the period for redemption. Frost remained in possession while the statute delayed the sale and preserved his equity of redemption.
A junior lien is extinguished by a valid foreclosure sale of the senior mortgage unless the junior interest has priority over the foreclosed lien or a statute or agreement preserves it.
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A mortgagee may obtain a deficiency judgment for the amount by which the mortgage obligation exceeds the foreclosure sale price unless state law prohibits or limits deficiency recovery.
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When the foreclosure sale price exceeds the debt and costs the surplus is distributed first to junior lienholders in order of priority and then to the mortgagor.
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Statutory redemption permits the mortgagor or sometimes junior lienholders to redeem the property after the foreclosure sale by paying the sale price plus interest and costs within the period fixed by state law.
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The purchaser at a foreclosure sale of a transferable interest under a charging order obtains only economic rights to distributions and does not become a partner.
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…Majority opinion Opinion of Justice Gants After foreclosing on two properties and purchasing the properties back at the foreclosure sales, U.S. Bank National Association (U.S. Bank), as trustee for the Structured Asset Securities Corporation Mortgage Pass-Through Certificates, Series 2006-Z, and Wells Fargo Bank, N.A. (Wells…