12 U.S.C. § 3708 — Service of notice of default and fore-

Page 1558 TITLE 12—BANKS AND BANKING § 3707 (8) the amount and method of deposit to be required at the foreclosure sale (except that no deposit shall be required of the Secretary), the time and method of payment of the bal- ance of the foreclosure purchase price and other appropriate terms of sale. (b)(1) Except as provided in paragraph (2)(A), the Secretary may require, as a condition and term of sale, that the purchaser at a foreclosure sale under this chapter agree to continue to op- erate the security property in accordance with the terms of the program under which the mort- gage insurance or assistance was provided, or any applicable regulatory or other agreement in effect with respect to such property imme- diately prior to the time of foreclosure sale. (2)(A) In any case where the majority of the residential units in a property subject to such a sale are occupied by residential tenants at the time of the sale, the Secretary shall require, as a condition and term of sale, any purchaser (other than the Secretary) to operate the prop- erty in accordance with such terms, as appro- priate, of the programs referred to in paragraph (1). (B) In any case where the Secretary is the pur- chaser of a multifamily project, the Secretary shall manage and dispose of such project in ac- cordance with the provisions of section 203 of the Housing and Community Development Amendments of 1978 [12 U.S.C. 1701z–11]. (Pub. L. 97–35, title III, § 367, Aug. 13, 1981, 95 Stat. 424; Pub. L. 102–550, title V, § 517(d), Oct. 28, 1992, 106 Stat. 3792.) Editorial Notes AMENDMENTS 1992—Subsec. (b)(1). Pub. L. 102–550 amended par. (1) generally. Prior to amendment, par. (1) read as follows: ‘‘Except as provided in paragraph (2)(A), the Secretary may require, as a condition and term of sale, that the purchaser at a foreclosure sale under this chapter agree to continue to operate the security property in accord- ance with the terms, as appropriate, of the loan pro- gram under section 312 of the Housing Act of 1964, the program under which insurance under title II of the Na- tional Housing Act was originally provided with re- spect to such property, or any applicable regulatory or other agreement in effect with respect to such property immediately prior to the time of foreclosure sale.’’ § 3707. Commencement of foreclosure; powers and duties of foreclosure commissioner or substitute (a) If the Secretary as holder of a multifamily mortgage determines that the prerequisites to foreclosure set forth in section 3705 of this title are satisfied, the Secretary may request the foreclosure commissioner to commence fore- closure of the mortgage. Upon such request, the foreclosure commissioner shall commence fore- closure of the mortgage, by commencing service of a notice of default and foreclosure sale in ac- cordance with section 3708 of this title. (b) Subsequent to commencement of a fore- closure under this chapter, the Secretary may designate a substitute foreclosure commissioner at any time up to forty-eight hours prior to the time of foreclosure sale, and the foreclosure shall continue without prejudice, unless the sub- stitute commissioner, in his or her sole discre- tion, finds that continuation of the foreclosure sale will unfairly affect the interests of the mortgagor. In the event that the substitute commissioner makes such a finding, the sub- stitute commissioner shall cancel the fore- closure sale, or adjourn such sale in the manner provided in section 3710(c) of this title. Upon designation of a substitute foreclosure commis- sioner, a copy of the written notice of such des- ignation referred to in section 3704 of this title shall be served upon the persons set forth in sec- tion 3708(1) of this title (1) by mail as provided in such section 3708 of this title (except that the minimum time periods between mailing and the date of foreclosure sale prescribed in such sec- tion shall not apply to notice by mail pursuant to this subsection), or (2) in any other manner, which in the substitute commissioner’s sole dis- cretion, is conducive to achieving timely notice of such substitution. In the event a substitute foreclosure commissioner is designated less than forty-eight hours prior to the time of the fore- closure sale, the pending foreclosure shall be terminated and a new foreclosure shall be com- menced by commencing service of a new notice of default and foreclosure sale. (Pub. L. 97–35, title III, § 368, Aug. 13, 1981, 95 Stat. 425.) § 3708. Service of notice of default and fore- closure sale The foreclosure commissioner shall serve the notice of default and foreclosure sale provided for in section 3706 of this title upon the fol- lowing 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) The notice of default and foreclosure sale, together with the designation required by sec- tion 3704 of this title, shall be sent by certified or registered mail, postage prepaid and return receipt requested, to the following persons: (A) the current security property owner of record, as the record exists forty-five days prior to the date originally set for fore- closure sale, whether or not the notice de- scribes a sale adjourned as provided in this chapter; (B) the original mortgagor and all subse- quent mortgagors of record or other persons who appear of record or in the mortgage agreement to be liable for part or all of the mortgage debt, as the record exists forty- five days prior to the date originally set for foreclosure sale, whether or not the notice describes a sale adjourned as provided in this chapter, except any such mortgagors or per- sons who have been released; and (C) all persons holding liens of record upon the security property, as the record exists forty-five days prior to the date originally set for foreclosure sale, whether or not the notice describes a sale adjourned as provided in this chapter. Notice under clauses (A) and (B) of this para- graph shall be mailed at least twenty-one days prior to the date of foreclosure sale, and shall be mailed to the owner or mortgagor at the Page 1559 TITLE 12—BANKS AND BANKING § 3710 address stated in the mortgage agreement, or, if none, to the address of the security prop- erty, or, at the discretion of the foreclosure commissioner, to any other address believed to be that of such owner or mortgagor. Notice under clause (C) of this paragraph shall be mailed at least ten days prior to the date of foreclosure sale, and shall be mailed to each such lienholder’s address as stated of record or, at the discretion of the foreclosure com- missioner, to any other address believed to be that of such lienholder. Notice by mail pursu- ant to this subsection or section 3707(b) of this title shall be deemed duly given upon mailing, whether or not received by the addressee and whether or not a return receipt is received or the letter is returned. (2) A copy of the notice of default and fore- closure sale shall be published, as provided herein, once a week during three successive calendar weeks, and the date of last publica- tion shall be not less than four nor more than twelve days prior to the sale date. The infor- mation included in the notice of default and foreclosure sale pursuant to section 3706(a)(4) of this title may be omitted, in the foreclosure commissioner’s discretion, from the published notice. Such publication shall be in a news- paper or newspapers having general circula- tion in the county or counties in which the se- curity property being sold is located. To the extent practicable, the newspaper or news- papers chosen shall be a newspaper or news- papers, if any is available, having circulation conducive to achieving notice of foreclosure by publication. Should there be 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 in at least three public places in each such county at least twenty-one days prior to the date of sale. (3) A copy of the notice of default and fore- closure sale shall be posted in a prominent place at or on the real property to be sold at least seven days prior to the foreclosure sale, and entry upon the premises for this purpose shall be privileged as against all persons. If the property consists of two or more non- contiguous parcels of land, a copy of the no- tice of default and foreclosure sale shall be posted in a prominent place on each such par- cel. If the security property consists of two or more separate buildings, a copy of the notice of default and foreclosure sale shall be posted in a prominent place on each such building. Posting at or on the premises shall not be re- quired where the foreclosure commissioner, in the commissioner’s sole discretion, finds that the act of posting will likely cause a breach of the peace or that posting may result in an in- creased risk of vandalism or damage to the property. (Pub. L. 97–35, title III, § 369, Aug. 13, 1981, 95 Stat. 426.) § 3709. Presale reinstatement (a) Grounds Except as provided in sections 3707(b) and 3710(c) of this title, the foreclosure commis- sioner shall withdraw the security property from foreclosure and cancel the foreclosure sale only if— (1) the Secretary so directs the commis- sioner prior to or at the time of sale; (2) the commissioner finds, upon application of the mortgagor at least three days prior to the date of sale, that the default or defaults upon which the foreclosure is based did not exist at the time of service of the notice of de- fault and foreclosure sale; or (3)(A) in the case of a foreclosure involving a monetary default, there is tendered to the foreclosure commissioner before public auc- tion is completed the entire amount of prin- cipal and interest which would be due if pay- ments under the mortgage had not been accel- erated; (B) in the case of a foreclosure involv- ing a nonmonetary default, the foreclosure commissioner, upon application of the mort- gagor before the date of foreclosure sale, finds that such default is cured; and (C) there is ten- dered to the foreclosure commissioner before public auction is completed all amounts due under the mortgage agreement (excluding ad- ditional amounts which would have been due if mortgage payments had been accelerated), all amounts of expenditures secured by the mort- gage and all costs of foreclosure incurred for which payment from the proceeds of fore- closure is provided in section 3711 of this title, except that the Secretary shall have discre- tion to refuse to cancel a foreclosure pursuant to this paragraph (3) if the current mortgagor or owner of record has on one or more previous occasions caused a foreclosure of the mort- gage, commenced pursuant to this chapter or otherwise, to be canceled by curing a default. (b) Views of Secretary Prior to withdrawing the security property from foreclosure in the circumstances described in subsection (a)(2) or (a)(3), the foreclosure commissioner shall afford the Secretary a rea- sonable opportunity to demonstrate why the se- curity property should not be so withdrawn. (c) Mortgage subsequent to reinstatement In any case in which a foreclosure commenced under this chapter is canceled, the mortgage shall continue in effect as though acceleration had not occurred. (d) Subsequent foreclosures If the foreclosure commissioner cancels a fore- closure sale under this chapter a new foreclosure may be subsequently commenced as provided in this chapter. (Pub. L. 97–35, title III, § 369A, Aug. 13, 1981, 95 Stat. 427.) § 3710. Foreclosure sale (a) Time of sale; public auction; location The date of foreclosure sale set forth in the notice of default and foreclosure sale shall not be prior to thirty days after the due date of the earliest installment wholly unpaid or the ear- liest occurrence of any uncured nonmonetary default upon which foreclosure is based. Fore- closure sale pursuant to this chapter shall be at public auction, and shall be scheduled to begin