Foreclosure Laws

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Maine Foreclosure Procedure

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:

1. 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.
2. The lender can enter the property and take possession if the borrower consented to it writing.
3.  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:

1. Pro-October 1, 1975, mortgages:  one year
2. 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.

 

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Maryland Foreclosure Procedure

Judicial Foreclosure Available: Yes

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

Maryland offers two basic methods of foreclosure:

1. power of sale foreclosure, in which the lender or another person named in the mortgage or deed of trust, may sell the property and 
2. 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:

1. Include in the lawsuit paperwork a sworn statement of the amount of the mortgage debt and a certified copy of the mortgage.
2. Post bond for the amount approved by the clerk.
3. Publish notice of the time, place and terms of the sale once a week for three weeks prior to the sale, with al least 15 days' notice of the foreclosure sale.
4. 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.
5. 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 for 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.

 

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Massachusetts Foreclosure Procedure

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

1. 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 
2. 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: 

1. file a lawsuit and obtain a court order giving the lender possession, 
2. enter peaceably and take possession or 
3. 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 will be left undisturbed by the bankruptcy court. Reasonably equivalent value is market value.

The invalidation of a foreclosure at less than market value can also be accomplished through the application of the Massachusetts Uniform Fraudulent Conveyance Act. Therefore the lender should take further precautions by appraising the property at the time of foreclosure, by advertising it in the real estate section of the newspapers, by mailing a notice of the sale to anyone who expressed an interest in buying the property, and by notifying real estate brokers in the immediate vicinity that the property is for sale. All of these steps should be taken if the lender wants to be sure to avoid future trouble from the borrower's bankruptcy petition after the sale, or a suit to set the sale aside under the Massachusetts Uniform Fraudulent Conveyance Act.

 

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Michigan Foreclosure Procedure

Michigan uses two forms of foreclosure: foreclosure by court action and foreclosure by advertisement. A mortgage may be foreclosed by filing a lawsuit in the Michigan circuit court. The court may order the property sold six months after the initial filing of the lawsuit. The property will be sold by the circuit court commissioner or any other person who is appointed by the court to conduct the sale. After the sale, the borrower has six months to redeem.

 

Foreclosure by Advertisement

If the mortgage contains a power of sale clause and there has been a breach of the terms of the mortgage, such as nonpayment of the loan, then the property may be foreclosed on through a non-judicial foreclosure by advertisement, unless the mortgage is held by the Michigan state housing development authority. Nonpayment of any installment of a mortgage constitutes a separate act which justifies foreclosure.

The notice of a foreclosure sale must be published once a week for four weeks in a newspaper of general circulation in the county where the land is situated. Within 15 days after the first publication, a true copy of the foreclosure notice must be posted in a conspicuous place on the premises described in the foreclosure notice. The lender or the lender's agents have a right to enter the mortgaged premises to post or deliver foreclosure notices.

The sale must be a public sale, conducted between the hours of 9 o’clock "in the forenoon" and 4 o'clock in the afternoon. The sale must be at the courthouse or place where the circuit court for the county tries lawsuits. The sale is to be conducted by the person appointed for the purpose in the mortgage, or by the sheriff, under sheriff or deputy sheriff. The sale must be made by auction to the highest bidder. The sale may be adjourned from time to time by posting a notice of such adjournment at the time and place where the sale would otherwise have been made. Any adjournment for more than a week must also be published in the same newspaper as the original notice, within 10 days from the date the sale was adjourned, and again once per week for each week the sale is adjourned.

The officer or person conducting the sale will execute, acknowledge and deliver a deed to the premises to the high bidder at the foreclosure sale. The deed must specify the last date by which the borrower can redeem the property. The deed must be recorded within 20 days after the sale. The register who records the deed shall endorse the time the deed was received. If the property is ever redeemed, the register will destroy the deed and record the word redeemed on the face of the special book for foreclosure deeds. The deed and the foreclosure do not wipe out liens or claims that existed prior to the date of the original mortgage.

 

Redemption

The borrower may redeem by paying the lender the sum for which the property was sold at foreclosure, plus interest at the same rate as the mortgage. If the foreclosure buyer recorded an affidavit staling how much in taxes and insurance the foreclosure buyer paid, following the foreclosure sale, then the borrower must repay that amount as part of the redemption process.

If a property is over four units or three acres and has not been abandoned, then the time period for redemption is one year from the date of the foreclosure sale. If the property has been abandoned, and if the balance is over two-thirds of the original loan, then the redemption period is one month. If the balance is two-thirds or less of the original loan, use one year. If the property is four units or less and does not exceed three acres in size, then two different redemption time periods apply.

1. If the mortgage was originated after 1965, and if the amount
   that remains unpaid on the loan is more than two-thirds of the original debt, then the borrower still has six months to redeem.
2. If the unpaid balance on a mortgage is less than two-thirds of the original debt, then the borrower has only three months to redeem if the property has been abandoned.

Abandonment

For residential property of four units or less, or three acres or less, abandonment shall be presumed in the following circumstances:

 

Personal Inspection

The lender has made a personal inspection of the premises and the inspection does not reveal anyone who is presently occupying or about to occupy the premises.

 

Borrower Fails to Respond to Proper Notice

The lender has posted a notice at the time the personal inspection was made, and mailed it by certified mail, return receipt requested, to the borrower's last known address. The notice must state that the lender considers the premises to be abandoned, and that the redemption period in such event will be only 30 days. If the borrower does not respond to these notices within 15 days by mailing to the lender (first class mail) a letter staling the premises are not abandoned, then the premises are considered to be abandoned. Obviously, a borrower who wants to preserve his or her rights should get busy and write the lender to show the premises are not abandoned or else the borrower will lose most of the benefits of the right of redemption.

 

Deficiency

A lender is restricted to foreclosing against the property as the sole remedy, unless the lender has a separate document that obligates the borrower to pay a sum certain, such as a promissory note, or the borrower has otherwise agreed to pay a sum in a specific amount stated in the mortgage document. In order to recover a deficiency amount, which would be the balance due on the mortgage minus the sum collected at the foreclosure sale (or credited if the lender bids by canceling out some of the borrower's obligation), the lender must file a lawsuit. The borrower can defend by showing the foreclosure sale price was less than the true value of the property at the time and place of the sale. If the sale was for substantially less than the true value, the deficiency sum the lender can recover may be either defeated or reduced by crediting the property's fair value against the unpaid loan balance at the time of the foreclosure. However, these defenses do not apply if the lender forecloses by court action rather than by foreclosure by advertisement.

 

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Minnesota Foreclosure Procedure

Judicial Foreclosure Available: Yes

Non-judicial Foreclosure Available: Yes

Minnesota allows foreclosure in two ways: by advertisement and by court action. If court action is selected, the lender must file a lawsuit and obtain a judgment for the amount due and a court order commanding the property to be sold. Prior to attempting any foreclosure, the lender should give at least 30 days' notice of the existence of a default. For agricultural property, complex mandatory mediation procedures must be followed.

 

Non-judicial Sale by Advertisement

If the mortgage contains a power of sale clause, it may be foreclosed by advertisement. However, a number of conditions must be met before sale by advertisement can be undertaken. 

1. There must be a default on the mortgage,
2. no lawsuit to collect on the mortgage may be underway,
3. the mortgage itself and any assignments of the mortgage to new lenders must have been recorded and 
4. the notice must be given eight weeks before foreclosure on a homestead. 

If an attorney is involved in the foreclosure, the attorney's authority must be shown by a power of attorney that has been properly recorded. Attorney's fees are set by statute for foreclosure sales. Hence, the borrower cannot be billed indiscriminately for attorney's fees during the foreclosure process.  

 

Certificate of Sale

After the sale, the sheriff will prepare a certificate showing the amount of the sale and the amount left unpaid on the loan.

 

Special Procedure - Right of First Refusal

Borrowers have a complex right of first refusal when land is acquired by a state agency, a federal agency, a limited partnership or a corporation (other than a family farm corporation). Once the agency or business acquires land by foreclosure, it will ultimately try to resell it. When it tries to resell, the old owner who lost the property in foreclosure must be offered the property in preference to any other purchaser at the price and terms an outside buyer is willing to accept for the property. The lender must make a good-faith effort to let the old owner buy it first, hence the term right of first refusal. The law applies for the first five years after the property was foreclosed on. The right of first refusal may not be waived or assigned, except to family members by inheritance.

 

Deficiency

Any deficiency is limited to the difference between the fair market value of the property, as determined by a jury, and the unpaid balance remaining on the old loan. To recover a deficiency judgment against the borrower, the lender must file a lawsuit against the borrower. If the lender already seeks foreclosure by a lawsuit, then all the lender has to do is add a claim to the existing lawsuit. However, when the foreclosure is by advertisement, then an independent lawsuit must be filed to recover a deficiency.

 

Redemption

Redemption is unusual in Minnesota . The borrower or a junior lien holder has up to one year after the foreclosure to redeem the property however there are stipulations on the time frame due to acreage and abandonment.

 

Preliminary Notices

Contents

The foreclosure notice must name the borrower the original lender, any takeover lender, the original loan amount, the date of the mortgage, recording information, the amount currently due on the loan including back taxes and unpaid insurance, a property description, the time and place of the impending foreclosure sale and the time allowed by law for the borrower to redeem the property.

 

SaleProcedures

Documentation

Before the sale, the lender must file a verified, itemized statement with the sheriff showing the amount due. This statement must be read during the sale b the sheriff.

 

Time and Place

The time, place and date of the foreclosure are set forth in the foreclosure notice.

 

Manner

In Minnesota , the actual foreclosure sale must be conducted by public auction. The sale is to the highest bidder.

 

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Mississippi Foreclosure Procedure

Judicial Foreclosure Available: Yes

Non-judicial Foreclosure Available: Yes

Mississippi offers two methods of foreclosure: by filing lawsuit asking for foreclosure in a Chancery Court and by sale, if authorized in the mortgage and conducted in compliance with Mississippi 's statutes. The borrower's right to properly conduct of the sale, after proper notice and advertisement of the sale, may not be waived in the loan documents. Any defect in the sale that would cause it to be void may not be corrected by the statute of limitations until ten years have passed from the date of the defective sale.

If the deed of trust contains an authorization for the lender to call upon a trustee to sell the real estate due to the borrower's default on the loan, such as by non-payment then the real estate may be sold by the trustee named in the deed of trust (or later appointed as a substitute) to try and pay off the loan. No sale by a substitute trustee is valid un less it was first recorded in the Office of the Chancery clerk of the county where the land is located, prior to the first posting or publishing of the foreclosure sale notice. If the lender, instead of some other buyer, acquires title to the real estate at foreclosure, then the lender will give credit for the foreclosure sale price against what was due on the loan.

 

Preliminary Notices

Advertising

In order to be valid, the foreclosure sale must be advertised for three consecutive weeks before the sale in a newspaper of general circulation in the county in which the land is located.

 

Posting

In addition, one notice must be posted for the same time at the county courthouse door. The notice must name the borrowers who will lose title.

 

Cure Procedure

The borrower may stop the foreclosure at any time prior to the sale by coming up with the missed payments, accrued costs and attorney's and trustee's fees. Only the amount that is actually past due needs to be paid. Even though the loan documents provided that the lender could accelerate the loan and make all future payments due, the borrower has the legal right to disregard the acceleration and stop the foreclosure by paying up the missed payments, accrued costs and attorney's and trustee's fees. The loan is then to be treated as though it was not accelerated. The borrower may continue to own and occupy the property and the lender may not foreclose.

 

Sale Procedures

Place

The place of sale should be the same as the place of sale for sheriff's sales of property in the county, which is usually the courthouse.

 

Manner

The sale must be made by public outcry in the county where the land is located, or in the county where the borrower lives. The sale must be for cash to the highest bidder.

 

Post-Sale Matters

After the sale, the trustee or substitute trustee must deliver a trustee's deed to the successful high bidder. The deed should give the names specified in the old deed of trust that was foreclosed on. The trustee's deed should also give information sufficient to locate the foreclosed deed of trust or mortgage in the deed records.

 

Special Procedures - Foreclosure and Major Disasters

In Mississippi , the governor may declare that a natural disaster, an enemy attack, or a man-made technological disaster makes it imperative to impose a moratorium on foreclosures. The moratorium may last for up to two years after the governor's declaration. The borrower can go to court and file a lawsuit to enjoin a lender from foreclosing. This would be due to damages to the mortgaged premises or because of economic conditions brought about by enemy attack, natural disaster or man-made technological disaster causing the fair market value of the property to decline by 15 percent, if refinancing is impractical under the circumstances. No cash is required on the injunction. The borrower must take action because a foreclosure conducted during a moratorium while the borrower did nothing is valid, even though the borrower could have won by exercising these rights.

 

Redemption

A foreclosure sale under a deed of trust is final in Mississippi . There is no right of redemption.

 

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Missouri Foreclosure Procedure

Missouri permits two types of foreclosure: 

1. Judicial, and 
2. Judicial under a power of sale clause. 

In judicial foreclosure the lender may file a petition in the office of the circuit court against the borrower and the tenants or occupiers or property. The petition states the nature of the mortgage and formally requests the court to render judgment for amount of the debt, to foreclose the equity of redemption (preventing the borrower from recovering the property by paying the mortgage) and to order the property sold to satisfy the amount due. Such a lawsuit will be handled in the same manner as other civil lawsuits. The borrower may be served in person or by constructive notice through publication if personal service efforts prove to be fruitless.

 

Power of Sale Foreclosures

Missouri permits foreclosure under a power of sale clause. in a mortgage. Before proceeding with a foreclosure sale under the power of sale clause, the lender must give the borrower 20 days notice of the sale, whether or not the mortgage or deed of trust provides for such notice. The property must be advertised for sale as follows:

1. In counties with over 50,000 inhabitants, the notice foreclosure sale must be published at least twenty times in the daily newspaper and continued to the day of sale.
2. In counties with under 50,000 inhabitants, the notice foreclosure must be published once per week on the same day each week in a daily, tri-weekly, or semi-weekly newspaper for four successive issues, with the last publication to be not more than one week prior to the foreclosure sale.

An affidavit of the printer or publisher may serve as evidence of publication.

 

Mailing of the Foreclosure Notice

The trustee who conducts the foreclosure sale must mail notice of the foreclosure sale not less than 20 days prior to the scheduled date of the sale to the following parties:

1. The borrower named in the deed of trust or mortgage at the last known address for the borrower.
2. The person shown by the office of the recorder's deed of records to be the owner of the property as of 40 days before the foreclosure sale, to the last known address shown in the lender's records for such recorded owner.
3. Any person whose name and address is set forth in, request for notice that has been duly recorded 40 days in advance of the foreclosure sale date 

The notice must be in the following format:

In accordance with R. S. MO 443.325, request is hereby made that notice of sale under the deed of trust (or mortgage) recorded the ___ day of ____ 19__, (as recorder's number ____ or in Book ___,.) of the records of County, Missouri, the legal description of the property being __ in ____ County, Missouri, executed by ____ as Grantor (or Mortgagor) in which______________ is named as beneficiary (or Mortgagee) and____________ as Trustee, be mailed to ___ (Name) at _______________(Address) _____. (City) _____, (State).

(Signature)

_______________________

_______________________

(Acknowledgment)

 

Receipt of Foreclosure: Notice Not Necessary

The borrower does not have to receive the envelope containing the notice of foreclosure pursuant to a deed of trust or mortgage. Recording of the receipt issued by the U.S. Post Office for certified or registered mail to evidence that the envelope has been delivered by the sender to the U.S. Post Office shall constitute proof of compliance with the notice requirements.

 

Trustees

The person named in the deed of trust or mortgage must conduct the foreclosure sale. However, if the trustee is dead, neglects this duty or is incapacitated, a new trustee can be appointed if the lender files a motion in court requesting a new trustee, and the court feels the circumstances justify an appointment, in which case the sheriff or another suitable person approved by the Judge can conduct the sale. A foreign corporation may not be a trustee for foreclosure in the state of Missouri , unless a co-trustee who is a resident of Missouri is named. Certain nearby states can authorize a Missouri corporation to act in a fiduciary capacity for an outside corporation. A trustee may collect a 2 percent commission on the first $1,000,1 percent on sums over that amount but under $5,000, and 0.5 percent on sums over that amount.

 

Sale Procedures

The trustee must conduct the sale in a fair manner at the time and place and in the manner specified in the notice of foreclosure, the deed of trust and the statute. The property is to be called out for sale and sold to the highest bidder. The lender may purchase at the sale, but if it does so, a right of redemption applies.

 

Redemption

If any person other than the lender, or some. one purchasing on behalf of the lender, buys the property at a fairly and properly conducted foreclosure sale, then no right of redemption exists. If, on the other hand, the lender buys at the foreclosure sale, as is so often the case, then the borrower has a right to redeem the property for one year from the date of sale.

In order to obtain the right of redemption, however, the borrower must meet many requirements. First, the borrower must give the trustee or other person conducting the sale advance notice, ten days prior to the sale, of the borrower's intent to redeem. Second, the borrower must arrange a bond on which there is one good surety, besides the borrower, who can stand good for a sum of money equal to the interest that would accrue throughout the year on the mortgage, and on any prior lien loan, together with the foreclosure costs, taxes and assessments, and furthermore, a sum equal to 6 percent of all the sums bid by the successful bidder at the foreclosure sale, whether they were advanced in cash or not. The bond must be sufficient to cover any waste or damages inflicted on the property by the borrower. The bond must be in place 20 days after the sale, or else the borrower has no right to redeem.

 

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Montana Foreclosure Procedure

Real estate may be foreclosed on by filing a lawsuit or by conducting a non-judicial private foreclosure sale in compliance with Montana law. Montana has some unusual mortgage provisions that have been largely replaced by the Small Tract Financing Act of Montana for homesteads and small business real estate. If the tract of land is 15 acres or less, then the lender may use a trust deed that provides for a relatively quick and inexpensive foreclosure procedure. Unless the Small Tract Financing Act applies, then the lender must foreclose either by filing a lawsuit and seeking an order of sale, or else following a special foreclosure procedure.

Under Montana's special foreclosure procedures, if applicable, the lender or person conducting the foreclosure sale must publish, post and serve a foreclosure notice at least 30 days in advance of the foreclosure sale. The notices must be advertised in a newspaper where the real estate is located, and if there is no newspaper, then by posting the notices in five conspicuous places in the county. Two other notices must be posted in conspicuous places in the township in which the land is situated, and one such notice must be in such a conspicuous place as will be most likely to give notice to all persons of the sale, and one must be posted at the front door of the county courthouse. The notice of sale must be further served on the occupant of the property to be foreclosed on and upon every person claiming an interest in the property who may be found in the state of Montana.

 

Small Tract Financing Act Foreclosure Procedure

If the tract of land is less than 15 acres, then the Small Tract Financing Act applies to the foreclosure under the power sale provisions of a deed of trust. If there is a default on ' loan obligation secured by the deed of trust, and then recorded a notice of sale, duly executed and acknowledge by the trustee named in the deed of trust, which sets forth l proper information, then the foreclosure may be done out court. The contents of the foreclosure notice must include:

1. The names of the borrower, lender and trustee.
2. A description of the property in foreclosure.
3. A description of the default causing the foreclosure.
4. The book and page where the trust deed is recorded.
5. The sum owing on the defaulted loan.
6. The trustee's or lender's intention to sell the property I pay off the debt.
7. The date of the sale, which shall be not less than 120 days subsequent to the date the foreclosure notice is filed for record.
8. The time of the sale, which shall be between the hours of 9 A.M. and 4 P.M. , mountain standard time.
9. The place of the sale, which shall be at the courthouse in the county in which the property is located, or at the office or usual place of business of the trustee if it's within the county in which the property is located.

Mailing of Foreclosure Notices

The trustee, at least 120 days before the date fixed for the foreclosure sale, must mail foreclosure notices by registered or certified mail to the following persons:

• The borrower, at the borrower's last known address
• Any person who recorded a request for notice
• Any record title owner as of the notice filing date

 

Posting

At least 20 days before the date fixed for the trustee's sale, a copy of the recorded notice of sale must be posted in a conspicuous place on the property to be sold. The trustee may request the sheriff or constable of the county to post the notice. A copy of the notice shall be published in a newspaper of general circulation in the county in which the property is located once per week for three successive weeks. The posting and the last publication shall be made at least 20 days before the date fixed for the trustee's sale.

 

Recording

On or before the date of the sale the trustee must record an affidavit staling that the requirements of mailing, posting and publication have been met.

 

SaleProcedures

At the date, time and place specified for foreclosure in the notice of sale, the trustee or his or her attorney shall sell the property at public auction to the highest bidder. The sale may be postponed up to 15 days by a proclamation made the time the foreclosure sale would otherwise have taken place. The purchaser must pay the high bid price in cash. In return, the purchaser will receive a trustee's deed. If the purchaser fails to pay, then the trustee can resell the proper at any time to the highest bidder. The trustee may reject any further bidding by a bidder who fails to produce cash in response to winning a bid.

 

Redemption

Although the old statutes provided for a one year right of redemption, the Small Tract Financing Act eliminates the borrower's right to redeem after a properly conducted foreclosure sale.

 

Deficiency

Montana does not allow a deficiency judgment unless the foreclosure was done by filing a lawsuit and the sale proceeds were insufficient to pay the judgment. Small Tract Financing Act foreclosures done out of court by advertisement do not give the lender any right to collect a deficiency from the borrower.

 

Possession

The lender may obtain possession on the tenth day following the sale. Any person still in the house or property is to be treated as a tenant at will (a nonpaying tenant).

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