Also known as: forecloses · foreclosed · foreclosing · foreclosure · mortgage foreclosure
Written by attorneys · grounded in primary & secondary sources — see below
An enforcement action that terminates the mortgagor's equity of redemption and allows the mortgagee to obtain the property or its value upon default on the secured obligation. The action may proceed judicially through court proceedings or nonjudicially under a power of sale contained in the mortgage or deed of trust. Different mortgage theories in the jurisdiction affect possession rights and the precise foreclosure procedure that applies.
Floyd Franklin borrowed $300,000 from Fidelity Trust secured by a mortgage on his home. After Franklin missed three monthly payments, Fidelity Trust accelerated the debt and initiated foreclosure proceedings. The sale proceeds first satisfied the costs of foreclosure and the outstanding loan balance, with any surplus returned to Franklin.
Fatou Fall purchased a lot in a subdivision subject to a recorded declaration requiring maintenance of common areas. After the prior owner defaulted on a mortgage, the lender foreclosed its lien. The purchaser at the foreclosure sale remained bound by the servitude obligations that ran with the land.
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Finn Fletcher granted a security interest in equipment to Foxfire Biotech to secure a loan. Upon Fletcher's default, Foxfire Biotech reduced its claim to judgment and foreclosed the security interest through available judicial procedures to obtain the collateral.
Felicity French obtained a charging order against Felix Franco's transferable interest in a partnership to satisfy a judgment. When distributions proved insufficient to pay the debt within a reasonable time, the court foreclosed the lien and ordered sale of the transferable interest to a third-party buyer.
A law firm sent letters to homeowners facing imminent foreclosure offering legal services. State authorities attempted to prohibit the mailings as improper solicitation. The letters constituted protected commercial speech because recipients could discard them and the communications lacked the coercive pressures of in-person contact.
Frank Fisher granted a mortgage on land in a title-theory jurisdiction. Upon default the mortgagee held legal title and could foreclose to cut off Fisher's equity of redemption. In a lien-theory jurisdiction the same facts would leave legal title with Fisher until the foreclosure sale occurred.
After default a secured party may reduce its claim to judgment, foreclose the security interest, or enforce it by any available judicial procedure. These remedies are cumulative and may be exercised simultaneously with other rights provided by agreement.
An appurtenant burden runs to a person who acquires title through a lien-foreclosure proceeding unless the servitude terms or specific exceptions provide otherwise.
The court may foreclose the lien and order sale of the transferable interest upon a showing that distributions under the charging order will not pay the judgment debt within a reasonable time.
Title theory gives the mortgagee legal title with the mortgagor retaining only an equity of redemption, while lien theory leaves legal title with the mortgagor and creates only a lien. The chosen theory governs possession, rents, and the steps required to complete foreclosure.
…28 U.S.C. § 1253 authorizes no direct appeal to this Court from the grant or denial of declaratory relief alone, review is not foreclosed when the case is properly before the Court on appeal from specific denial of injunctive relief and the arguments as to both injunctive and declaratory relief are necessarily identical. Pp.…