Also known as: re-foreclosure · foreclosure
Written by attorneys · grounded in primary & secondary sources — see below
A subsequent foreclosure action brought by the purchaser at an initial foreclosure sale to eliminate the interests of omitted necessary parties such as junior lienholders. The purchaser steps into the shoes of the original mortgagee and may foreclose the mortgage anew with the omitted parties now joined. This process cuts off the omitted interests that survived the first sale.
Renee Rogers purchased an apartment building at a foreclosure sale conducted by the first mortgagee. A second mortgage held by Riverside Healthcare had not been joined in the proceeding. Rogers now brings a new foreclosure action naming Riverside as a defendant. The court permits the reforeclosure and the sale extinguishes Riverside's lien.
Raven Logistics bought a commercial parcel at foreclosure. An easement benefiting an adjoining owner had not been joined. Raven initiates reforeclosure and joins the easement holder. The new sale terminates the easement because the underlying lien had priority over the servitude.
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Roberto Reyes purchased partnership interests at a foreclosure sale under a charging order. A junior judgment creditor had not been joined. Reyes commences reforeclosure and includes the omitted creditor. The subsequent sale transfers only the transferable interest free of the omitted claim.
Rosa Ruiz purchased a residence at foreclosure. A junior lienholder had not been joined in the original action. Ruiz commences reforeclosure naming the omitted lienholder as defendant. The new sale extinguishes the junior lien and clears title.
Rowan Russell accepted a deed in lieu from a defaulting mortgagor. A junior lienor had not been joined in any prior action. Russell brings reforeclosure naming the junior lienor. The court confirms that the new proceeding extinguishes the junior interest.
Renata Russo purchased land at foreclosure. A later-recorded conservation servitude had been omitted. Russo reforecloses and joins the servitude holder. Because the foreclosed lien had statutory priority, the sale terminates the servitude.
A purchaser may elect reforeclosure when the omitted party holds a lien that survived the first sale. Redemption requires paying the junior debt in full. Reforeclosure allows the purchaser to force a new sale that extinguishes the junior interest without paying it off.
The purchaser stands in the shoes of the original mortgagee. The validity of the underlying mortgage is presumed from the first foreclosure judgment. The reforeclosure action focuses on joining the omitted parties and confirming their interests are cut off.
The omitted lien survives the first foreclosure sale. The purchaser takes title subject to that lien. The junior lienor retains the right to foreclose its own lien or to redeem the property from the purchaser.
Only interests that were omitted from the first proceeding can be reached by reforeclosure. Interests created after the mortgage but joined in the first action are already extinguished. Later-created interests require a separate proceeding.