Collapse to view only § 3768. Deficiency judgment
- § 3751. Findings and purpose
- § 3752. Definitions
- § 3753. Applicability
- § 3754. Designation of foreclosure commissioner
- § 3755. Prerequisites to foreclosure
- § 3756. Commencement of foreclosure
- § 3757. Notice of default and foreclosure sale
- § 3758. Service of notice of foreclosure sale
- § 3759. Presale reinstatement
- § 3760. Conduct of sale; adjournment
- § 3761. Foreclosure costs
- § 3762. Disposition of sale proceeds
- § 3763. Transfer of title and possession
- § 3764. Record of foreclosure and sale
- § 3765. Effect of sale
- § 3766. Computation of time
- § 3767. Severability
- § 3768. Deficiency judgment
§ 3751. Findings and purpose
(a) FindingsThe Congress finds that—
(1) the disparate State laws under which mortgages are foreclosed on behalf of the Secretary covering 1- to 4-family residential properties—
(A) burden certain programs administered by the Secretary;
(B) increase the costs of collecting obligations; and
(C) generally are a detriment to the community in which the properties are located;
(2) the long periods required to complete the foreclosure of such mortgages under certain State laws—
(A) lead to deterioration in the condition of the properties involved;
(B) necessitate substantial Federal holding expenditures;
(C) increase the risk of vandalism, fire loss, depreciation, damage, and waste with respect to the properties; and
(D) adversely affect the neighborhoods in which the properties are located;
(3) these conditions seriously impair the ability of the Secretary to protect the Federal financial interest in the affected properties and frustrate attainment of the objectives of the underlying Federal program authority;
(4) the availability of uniform and more expeditious procedures, with no right of redemption in the mortgagor or others, for the foreclosure of these mortgages by the Secretary will tend to ameliorate these conditions; and
(5) providing the Secretary with a nonjudicial foreclosure procedure will reduce unnecessary litigation by removing many foreclosures from the courts if they contribute to overcrowded calendars.
(b) PurposeThe purpose of this chapter is to create a uniform Federal foreclosure remedy for single family mortgages that—
(1) are held by the Secretary pursuant to title I or title II of the National Housing Act [12 U.S.C. 1702 et seq., 1707 et seq.]; or
(2) secure loans obligated by the Secretary under section 1452b 1
1 See References in Text note below.
of title 42.(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3752. Definitions
For purposes of this chapter, the following definitions shall apply:
(1) Bona fide purchaser
(2) County
(3) Mortgage
(4) Mortgage agreement
(5) Mortgagor
(6) Owner
(7) Person
(8) Record; recorded
(9) Security property
(10) Single family mortgage
The term “single family mortgage” means a mortgage that covers property on which there is located a 1- to 4-family residence, and that—
(A) is held by the Secretary pursuant to title I or title II of the National Housing Act [12 U.S.C. 1702 et seq., 1707 et seq.]; or
(B) secures a loan obligated by the Secretary under section 1452b of title 42, as it existed before the repeal of that section by section 12839 of title 42 (except that a mortgage securing such a loan that covers property containing nonresidential space and a 1- to 4-family dwelling shall not be subject to this chapter).
(11) State
The term “State” means—
(A) the several States;
(B) the District of Columbia;
(C) the Commonwealth of Puerto Rico;
(D) the United States Virgin Islands;
(E) Guam;
(F) American Samoa;
(G) the Northern Mariana Islands;
(H) the Trust Territory of the Pacific Islands; and
(I) Indian tribes, as defined by the Secretary.
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3753. Applicability
Single family mortgages encumbering real estate located in any State may be foreclosed by the Secretary in accordance with this chapter, or pursuant to other foreclosure procedures available, at the option of the Secretary.
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3754. Designation of foreclosure commissioner
(a) In general
(b) Power of sale
(c) Qualifications
(d) Designation procedure
(1) Written designation
(2) Substitute commissioners
(3) Number
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3755. Prerequisites to foreclosure
(a) In general
(1) Upon breach of covenant or condition
(2) No other pending proceedings
(A) Prior to commencement
(B) After commencement
(b) Other rights unaffected
Nothing in this chapter shall preclude the Secretary from—
(1) enforcing any right, other than foreclosure, under applicable Federal or State law, including any right to obtain a monetary judgment; or
(2) foreclosing under this chapter if the Secretary has obtained or is seeking any other remedy available pursuant to Federal or State law, or under the mortgage agreement, including the appointment of a receiver, mortgagee-in-possession status, or relief under an assignment of rents.
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3756. Commencement of foreclosure
(a) Request to foreclosure commissioner
(b) Designation of substitute foreclosure commissioner
(c) Written notice
Upon designation of a substitute foreclosure commissioner, a copy of the written notice of such designation described in section 3754 of this title shall be served—
(1) by mail, as provided in section 3758 of this title (except that the minimum time periods between mailing and the date of foreclosure sale prescribed in such section shall not apply); or
(2) in any other manner which, in the substitute commissioner’s sole discretion, is conducive to achieving timely notice of such substitution.
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3757. Notice of default and foreclosure saleThe notice of default and foreclosure sale to be served in accordance with this chapter shall set forth—
(1) the name and address of the foreclosure commissioner;
(2) the date on which the notice is issued;
(3) the names of—
(A) the Secretary;
(B) the original mortgagee (if other than the Secretary); and
(C) the original mortgagor;
(4) the street address or a description of the location of the security property, and a description of the security property, sufficient to identify the property to be sold;
(5) the date of the mortgage, the office in which the mortgage is recorded, and the liber number and folio or other appropriate description of the location of recordation of the mortgage;
(6) identification of the failure to make payment, including the due date of the earliest installment payment remaining wholly unpaid as of the date on which the notice is issued upon which the foreclosure is based, or a description of any other default or defaults upon which foreclosure is based, and the acceleration of the secured indebtedness;
(7) the date, time, and location of the foreclosure sale;
(8) a statement that the foreclosure is being conducted pursuant to this chapter;
(9) a description of the types of costs, if any, to be paid by the purchaser upon transfer of title;
(10) the amount and method of deposit to be required at the foreclosure sale (except that no deposit shall be required of the Secretary) and the time and method of payment of the balance of the foreclosure purchase price; and
(11) any other appropriate terms of sale or information, as the Secretary may determine.
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3758. Service of notice of foreclosure sale
The foreclosure commissioner shall serve the notice of default and foreclosure sale described in section 3757 of this title upon the following persons and in the following manner, and no additional notice shall be required to be served, notwithstanding any notice requirements of any State or local law:
(1) Timing
(2) Notice by mail
(A) In general
The notice of foreclosure sale shall be sent by certified or registered mail, postage prepaid and return receipt requested, to the following:
(i) Current owner
(ii) Mortgagors
(iii) Dwelling units
(iv) Other lienholders
(B) Timing
(i) Notice under clauses (i) and (ii)
(ii) Notice under clause (iii)
(iii) Notice under clause (iv)
(C) Effectiveness of notice
(3) Publication
(A) In general
(B) Exception
If there is no newspaper published at least weekly which has a general circulation in one of the counties in which the security property being sold is located, copies of the notice of default and foreclosure sale shall be posted not less than 21 days before the date of the foreclosure sale—
(i) at the courthouse of any county or counties in which the security property is located; and
(ii) at the place where the sale is to be held.
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3759. Presale reinstatement
(a) Withdrawal and cancellation
(1) In generalExcept as provided in sections 3756(b) and 3760(c) of this title, the foreclosure commissioner shall withdraw the security property from foreclosure and cancel the foreclosure sale only if—
(A) the Secretary directs the foreclosure commissioner to do so before or at the time of the sale;
(B) the foreclosure commissioner finds, upon application of the mortgagor not less than 3 days before the date of the sale, that the default or defaults upon which the foreclosure is based did not exist at the time of service of the notice of default and foreclosure sale; or
(C)
(i) in the case of a foreclosure involving a monetary default, there is tendered to the foreclosure commissioner before public auction is completed the entire amount of principal and interest which would be due if payments under the mortgage had not been accelerated;
(ii) in the case of a foreclosure involving a nonmonetary default, the foreclosure commissioner, upon application of the mortgagor before the date of foreclosure sale, finds that such default is cured; and
(iii) there is tendered to the foreclosure commissioner before public auction is completed—(I) all amounts due under the mortgage agreement (excluding additional amounts which would have been due if mortgage payments had been accelerated);(II) all amounts of expenditures secured by the mortgage; and(III) all costs of foreclosure incurred for which payment from the proceeds of foreclosure is provided in section 3761 of this title.
(2) Discretionary noncancellation
(b) Opportunity of Secretary to dispute withdrawal
(c) Effect of cancellation
(1) Mortgage unaffected
(2) Commencement of new foreclosure sale
(d) Notice of cancellation
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3760. Conduct of sale; adjournment
(a) In general
(1) Manner and time
(2) Location
(3) Sale of multiple properties
(b) Duties of foreclosure commissioner
(1) Conduct of sale
(A) In general
(B) Written bids
(C) Auctioneer
(2) Eligible participants
(A) In general
(B) Prohibited participants
(c) Adjournment or cancellation of sale
(1) General authority
The foreclosure commissioner may, before or at the time of the foreclosure sale, adjourn or cancel the foreclosure sale if the commissioner determines, in the commissioner’s discretion, that—
(A) circumstances are not conducive to a sale which is fair to the mortgagor and the Secretary; or
(B) additional time is necessary to determine whether the security property should be withdrawn from foreclosure, as provided in section 3759 of this title.
(2) Adjournment to same or later day
(d) Cash deposits
(e) Presumption of validity of sale
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3761. Foreclosure costs
The following foreclosure costs shall be paid from the sale proceeds before satisfaction of any other claim to such sale proceeds:
(1) Advertising and postage
(2) Mileage
(3) Title and lien search
(4) Recordation fees
(5) Commission
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3762. Disposition of sale proceeds
(a) Priority payments
Money realized from a foreclosure sale shall be made available for obligation and expenditure in the following order:
(1) Costs of foreclosure
(2) Tax liens
(3) Prior liens
(4) Service charges and advances
(5) Interest
(6) Principal
(7) Late charges or fees
(b) Other payments
(1) Other lienholders and the mortgagor
Any surplus of proceeds from a foreclosure sale, after payment of the items described in subsection (a) shall be paid in the following order:
(A) First, to holders of liens recorded after the mortgage in the order of priority under Federal law or the law of the State in which the security property is located.
(B) Second, to the appropriate mortgagor.
(2) Disputed claims
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3763. Transfer of title and possession
(a) Delivery of deeds
(b) Right of possession
(c) Death of purchaser
(d) Bona fide purchaser
(e) No right of redemption
(1) In general
(2) Certain provisions
(f) Taxes
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3764. Record of foreclosure and sale
(a) Statements included
To establish a sufficient record of foreclosure and sale, the foreclosure commissioner shall include in the recitals of the deed to the purchaser, or prepare as an affidavit or addendum to the deed, a statement setting forth—
(1) the date, time, and place of the foreclosure sale;
(2) that the mortgage was held by the Secretary, the date of the mortgage, the office in which the mortgage was recorded, and the liber number and folio or other appropriate description of the recordation of the mortgage;
(3) the particulars of the foreclosure commissioner’s service of the notice of default and foreclosure sale in accordance with sections 3758 and 3760 of this title;
(4) the date and place of filing the notice of default and foreclosure sale;
(5) that the foreclosure was conducted in accordance with the provisions of this chapter and with the terms of the notice of default and foreclosure sale; and
(6) the sale amount.
(b) Effect of statements
The items set forth in subsection (a) shall—
(1) be prima facie evidence of the truth of such facts in any Federal or State court; and
(2) evidence a conclusive presumption in favor of bona fide purchasers and encumbrancers for value without notice.
Encumbrancers for value include liens placed by lenders who provide the purchaser with purchase money in exchange for a security interest in the newly-conveyed property.
(c) Recordation of instruments
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3765. Effect of sale
A sale, made and conducted as prescribed in this chapter to a bona fide purchaser, shall bar all claims upon, or with respect to, the property sold, for each of the following persons:
(1) Notice recipients
(2) Subordinate claimants with knowledge
(3) Nonrecorded claimants
(4)
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3766. Computation of time
Periods of time provided for in this chapter shall be calculated in consecutive calendar days, including the day or days on which the actions or events occur or are to occur for which the period of time is provided and including the day on which an event occurs or is to occur from which the period is to be calculated.
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3767. Severability
If any part of this chapter shall, for any reason, be adjudged by a court of competent jurisdiction to be invalid, or invalid as applied to a class of cases, such judgment shall not affect, impair, or invalidate the remainder thereof, and shall be confined in its operation to the part thereof directly involved in the controversy in which such judgment shall have been rendered.
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)
§ 3768. Deficiency judgment
(a) In general
(1) Referral to Attorney General
(2) Other recoveries
In any action instituted pursuant to this section the United States may recover—
(A) any amount authorized by section 3011 of title 28; and
(B) the costs of the action.
(b) Limitation
(Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.)