12 U.S.C. § 3712 — Disposition of sale proceeds

Page 1560 TITLE 12—BANKS AND BANKING § 3711 between the hours of 9 o’clock ante meridian and 4 o’clock post meridian local time on a day other than Sunday or a public holiday as defined by section 6103(a) of title 5 or State law. The foreclosure sale shall be held at a location speci- fied in the notice of default and foreclosure sale, which shall be a location where foreclosure real estate auctions are customarily held in the county or one of the counties in which the prop- erty to be sold is located, or at a courthouse therein, or at or on the property to be sold. Sale of security property situated in two or more counties may be held in any one of the counties in which any part of the security property is sit- uated. (b) Conduct of sale The foreclosure commissioner shall conduct the foreclosure sale in accordance with the pro- visions of this chapter and in a manner fair to both the mortgagor and the Secretary. The fore- closure commissioner shall attend the fore- closure sale in person, or, if there are two or more commissioners, at least one shall attend the foreclosure sale. In the event that no fore- closure commissioner is a natural person, the foreclosure commissioner shall cause its duly authorized employee to attend the foreclosure sale to act on its behalf. Written one-price sealed bids shall be accepted by the foreclosure commissioner from the Secretary and other per- sons for entry by announcement by the commis- sioner at the sale. The Secretary and any other person may bid at the foreclosure sale, including the Secretary or any other person who has sub- mitted a written one-price bid, except that the foreclosure commissioner or any relative, re- lated business entity or employee of such com- missioner or entity shall not be permitted to bid in any manner on the security property subject to foreclosure sale. The foreclosure commis- sioner may serve as auctioneer, or, in accord- ance with regulations of the Secretary, may em- ploy an auctioneer to be paid from the commis- sion provided for in section 3711(5) of this title. (c) Adjournment or cancellation The foreclosure commissioner shall have dis- cretion, prior to or at the time of sale, to ad- journ or cancel the foreclosure sale if the com- missioner determines, in the commissioner’s sole discretion, that circumstances are not con- ducive to a sale which is fair to the mortgagor and the Secretary or that additional time is nec- essary to determine whether the security prop- erty should be withdrawn from foreclosure as provided in section 3709 of this title. The fore- closure commissioner may adjourn a sale to a later hour the same day without the giving of further notice, or may adjourn the foreclosure sale for not less than nine nor more than twen- ty-four days, in which case the commissioner shall serve a notice of default and foreclosure sale revised to recite that the foreclosure sale has been adjourned to a specified date and to in- clude any corrections the foreclosure commis- sioner deems appropriate. Such notice shall be served by publication, mailing and posting in ac- cordance with section 3708 of this title, except that publication may be made on any of three separate days prior to the revised date of fore- closure sale, and mailing may be made at any time at least seven days prior to the date to which the foreclosure sale has been adjourned. (Pub. L. 97–35, title III, § 369B, Aug. 13, 1981, 95 Stat. 428.) § 3711. Foreclosure costs The following foreclosure costs shall be paid from the sale proceeds prior to satisfaction of any other claim to such sale proceeds: (1) necessary advertising costs and postage incurred in giving notice pursuant to sections 3708 and 3710 of this title; (2) mileage for posting notices and for the foreclosure commissioner’s attendance at the sale at the rate provided in section 1921 of title 28 for mileage by the most reasonable road dis- tance; (3) reasonable and necessary costs actually incurred in connection with any necessary search of title and lien records; (4) necessary out-of-pocket costs incurred by the foreclosure commissioner to record docu- ments; and (5) a commission for the foreclosure commis- sioner for the conduct of the foreclosure to the extent authorized by regulations issued by the Secretary. (Pub. L. 97–35, title III, § 369C, Aug. 13, 1981, 95 Stat. 429.) § 3712. Disposition of sale proceeds Money realized from a foreclosure sale shall be made available for obligation and expenditure— (1) first to cover the costs of foreclosure pro- vided for in section 3711 of this title; (2) then to pay valid tax liens or assessments prior to the mortgage; (3) then to pay any liens recorded prior to the recording of the mortgage which are re- quired to be paid in conformity with the terms of sale in the notice of default and foreclosure sale; (4) then to service charges and advance- ments for taxes, assessments, and property in- surance premiums; (5) then to the interest; (6) then to the principal balance secured by the mortgage (including expenditures for the necessary protection, preservation, and repair of the security property as authorized under the mortgage agreement and interest thereon if provided for in the mortgage agreement); and (7) then to late charges. Any surplus after payment of the foregoing shall be paid to holders of liens recorded after the mortgage and then to the appropriate mort- gagor. If the person to whom such surplus is to be paid cannot be located, or if the surplus available is insufficient to pay all claimants and the claimants cannot agree on the allocation of the surplus, or if any person claiming an inter- est in the mortgage proceeds does not agree that some or all of the sale proceeds should be paid to a claimant as provided in this section, that part of the sale proceeds in question may be de- posited by the foreclosure commissioner with an appropriate official or court authorized under law to receive disputed funds in such cir- Page 1561 TITLE 12—BANKS AND BANKING § 3717 cumstances. If such a procedure for the deposit of disputed funds is not available, and the fore- closure commissioner files a bill of interpleader or is sued as a stakeholder to determine entitle- ment to such funds, the foreclosure commis- sioner’s necessary costs in taking or defending such action shall be deductible from the dis- puted funds. (Pub. L. 97–35, title III, § 369D, Aug. 13, 1981, 95 Stat. 429.) § 3713. Transfer of title and possession (a) Payment and delivery of deeds The foreclosure commissioner shall deliver a deed or deeds to the purchaser or purchasers and obtain the balance of the purchase price in ac- cordance with the terms of sale provided in the notice of default and foreclosure sale. (b) Quit claim deed Subject to subsection (c), the foreclosure deed or deeds shall convey all of the right, title, and interest in the security property covered by the deed which the Secretary as holder, the fore- closure commissioner, the mortgagor, and any other persons claiming by, through, or under them, had on the date of execution of the mort- gage, together with all of the right, title, and in- terest thereafter acquired by any of them in such property up to the hour of sale, and no ju- dicial proceeding shall be required ancillary or supplementary to the procedures provided in this chapter to assure the validity of the con- veyance or confirmation of such conveyance. (c) Possession by purchaser; continuing interests A purchaser at a foreclosure sale held pursu- ant to this chapter shall be entitled to posses- sion upon passage of title to the mortgaged property, subject to an interest or interests sen- ior to that of the mortgage and subject to the terms of any lease of a residential tenant for the remaining term of the lease or for one year, whichever period is shorter. Any other person remaining in possession after the sale and any residential tenant remaining in possession after the applicable period shall be deemed a tenant at sufferance. (d) Right of redemption; right of possession There shall be no right of redemption, or right of possession based upon right of redemption, in the mortgagor or others subsequent to a fore- closure pursuant to this chapter. (e) Imposition of tax on conveyance to the Sec- retary When conveyance is made to the Secretary, no tax shall be imposed or collected with respect to the foreclosure commissioner’s deed, whether as a tax upon the instrument or upon the privilege of conveying or transferring title to the prop- erty. Failure to collect or pay a tax of the type and under the circumstances stated in the pre- ceding sentence shall not be grounds for refusing to record such a deed, for failing to recognize such recordation as imparting notice or for de- nying the enforcement of such a deed and its provisions in any State or Federal court. (Pub. L. 97–35, title III, § 369E, Aug. 13, 1981, 95 Stat. 430.) § 3714. Record of foreclosure and sale (a) To establish a sufficient record of fore- closure and sale, the foreclosure commissioner shall include in the recitals of the deed to the purchaser or prepare an affidavit or addendum to the deed stating— (1) that the mortgage was held by the Sec- retary; (2) the particulars of the foreclosure com- missioner’s service of notice of default and foreclosure sale in accordance with sections 3708 and 3710 of this title; (3) that the foreclosure was conducted in ac- cordance with the provisions of this chapter and with the terms of the notice of default and foreclosure sale; (4) a correct statement of the costs of fore- closure, calculated in accordance with section 3711 of this title; and (5) the name of the successful bidder and the amount of the successful bid. (b) The deed executed by the foreclosure com- missioner, the foreclosure commissioner’s affi- davit and any other instruments submitted for recordation in relation to the foreclosure of the security property under this chapter shall be ac- cepted for recordation by the registrar of deeds or other appropriate official of the county or counties in which the security property is lo- cated upon tendering of payment of the usual re- cording fees for such instruments. (Pub. L. 97–35, title III, § 369F, Aug. 13, 1981, 95 Stat. 430.) § 3715. 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 pe- riod 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. 97–35, title III, § 369G, Aug. 13, 1981, 95 Stat. 431.) § 3716. Separability If any clause, sentence, paragraph or part of this chapter shall, for any reason, be adjudged by a court of competent jurisdiction to be in- valid or invalid as applied to a class of cases, such judgment shall not affect, impair, or inval- idate the remainder thereof and of this chapter, but shall be confined in its operation to the clause, sentence, paragraph, or part thereof di- rectly involved in the controversy in which such judgment shall have been rendered. (Pub. L. 97–35, title III, § 369H, Aug. 13, 1981, 95 Stat. 431.) § 3717. Regulations The Secretary is authorized to issue such reg- ulations as may be necessary to carry out the provisions of this chapter. (Pub. L. 97–35, title III, § 369I, Aug. 13, 1981, 95 Stat. 431.)