Also known as: strict foreclosures · strict foreclosure action
Written by attorneys · grounded in primary & secondary sources — see below
A foreclosure procedure by which a court vests title to mortgaged property in the mortgagee without conducting a sale. The procedure requires the mortgagor to pay the debt within a court-specified period or lose all interest in the property. It exists only in limited jurisdictions and under narrow circumstances authorized by the mortgage or statute.
Summit Bank holds a mortgage on Stella Shapiro's commercial building. After Stella defaults on payments, the mortgage expressly authorizes strict foreclosure and state law routinely permits the remedy. The court enters judgment transferring title to Summit Bank without ordering a sale, cutting off Stella's equity of redemption.
Solomon Silver sold property to Sarah Sullivan under a land contract. Sarah falls behind on installments. The court grants Solomon a strict-foreclosure decree giving Sarah a fixed period to pay the balance. When Sarah fails to redeem, title vests in Solomon without any public sale.
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Strict foreclosure is available only where the mortgage or applicable state statute expressly authorizes it and the jurisdiction recognizes the remedy. Courts grant it when the debt equals or exceeds the property value, eliminating any surplus for junior creditors.
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No. Strict foreclosure terminates the mortgagor's equity of redemption and transfers title directly to the mortgagee without any sale. This distinguishes it from judicial or power-of-sale foreclosure.
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An unsecured creditor generally cannot override the mortgage terms or state law that authorize strict foreclosure. The creditor's interest depends on the mortgagor's equity of redemption, which strict foreclosure validly extinguishes.
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No. Strict foreclosure is a rare remedy limited to a few jurisdictions and special situations. Most states require foreclosure by judicial sale or power of sale.
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…abused its discretion in sua sponte ordering a foreclosure; in the alternative, they argue that the court erred in permitting strict foreclosure, in giving a short redemption period, and in placing the redemption amount too high; and further argue that the trial court should not have ordered conditional damages for waste. Defendant,…