1. Equity of Redemption
- at any time up to the foreclosure sale, debtor can keep the property. Debtor pays amount in arrears; but if an acceleration clause, debtor must additionally pay entire
2. Foreclosure Must be by Public Auction
- regardless of how sale occurs, whether by court or otherwise.
3. If Multiple Mortgages: Priorities Are
- first in time, first in right, unless recording act changes that
- If mortgage not recorded/recorded late, may have to apply recording act to find priority. Apply recording act just as if dealing with a deed.
- Purchase Money Mortgages given priority over other mortgages around same time, even if others record first. PMM's by seller have priority over 3rd party PMM's.
- - If owner does anything to increase a senior mortgage, then that mortgage loses priority over juniors, but only to the extent of the change.
- 4. Foreclosures - wipe out all junior interests (those later in time), but do not wipe out senior interests (those earlier in time). Interests include easements or leases.
- Junior interests do not
go with the land, will be paid off if there is enough $$ from foreclosure sale
- Senior Interests
- do not
get paid off when later mortgage is foreclosed; keep on going. New purchases takes property subject to
- Protections to Juniors
- have right to pay off any mortgage being foreclosed to keep their interest from being wiped out, thus, are necessary parties
to any foreclosure, and if not joined, then their interests not wiped out
5. Order of Use of Foreclosure Sale Proceeds:
a. Pay costs of foreclosure, including expenses and attorney fees;
b. Pay the mortgage that was foreclosed, including accrued interest;
c. Pay off Junior interests
, in order (pay 1st fully before paying 2nd, etc.)
d. Anything left to mortgagor.
6. If Mortgage is Foreclosed and Not Enough Money to Pay off Mortgage
- mortgagee can sue debtor
for balance due