12 U.S.C. § 3763 — Transfer of title and possession

Page 1568 TITLE 12—BANKS AND BANKING § 3762 Editorial Notes CODIFICATION Section is based on section 812 of title VIII of S. 2281, One Hundred Third Congress, as reported July 13, 1994, which was enacted into law by Pub. L. 103–327. § 3762. Disposition of sale proceeds (a) Priority payments Money realized from a foreclosure sale shall be made available for obligation and expenditure in the following order: (1) Costs of foreclosure To cover the costs of the foreclosure pro- ceeding described in section 3761 of this title. (2) Tax liens To pay valid tax liens or assessments if re- quired by the notice of default and foreclosure sale. (3) Prior liens To pay any liens recorded before the record- ing of the mortgage which are required to be paid in conformity with the terms of sale in the notice of default and foreclosure sale. (4) Service charges and advances To pay service charges and advances for taxes, assessments, and property insurance premiums. (5) Interest To pay any outstanding interest. (6) Principal To pay the principal outstanding balance se- cured 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 agree- ment). (7) Late charges or fees To pay any late charges or fees. (b) Other payments (1) Other lienholders and the mortgagor Any surplus of proceeds from a foreclosure sale, after payment of the items described in subsection (a) shall be paid in the following order: (A) First, to holders of liens recorded after the mortgage in the order of priority under Federal law or the law of the State in which the security property is located. (B) Second, to the appropriate mortgagor. (2) Disputed claims If the person to whom such surplus is to be paid cannot be located, or if the surplus avail- able is insufficient to pay all claimants and the claimants cannot agree on the allocation of the surplus, or if any person claiming an in- terest 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 deposited by the foreclosure commissioner with an appropriate official or court author- ized under law to receive disputed funds in such circumstances. If a procedure for the de- posit of disputed funds is not available, and the foreclosure commissioner files a bill of interpleader or is sued as a stakeholder to de- termine entitlement to such funds, the fore- closure commissioner’s necessary costs in- curred in taking or defending such action shall be deductible from the disputed funds. (Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.) Editorial Notes CODIFICATION Section is based on section 813 of title VIII of S. 2281, One Hundred Third Congress, as reported July 13, 1994, which was enacted into law by Pub. L. 103–327. § 3763. Transfer of title and possession (a) Delivery of deeds The foreclosure commissioner shall, upon de- livery of a deed or deeds to the purchaser or pur- chasers (which shall be without warranty or cov- enants to the purchaser or purchasers) obtain the balance of the purchase price in accordance with the terms of sale provided in the notice of default and foreclosure sale. Notwithstanding any State law to the contrary, delivery of a deed by the foreclosure commissioner shall be a con- veyance of the property, and constitute passage of title to the mortgaged property, and no judi- cial proceedings 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. (b) Right of possession A purchaser at a foreclosure sale held pursu- ant to this chapter shall be entitled to posses- sion upon passage of title under subsection (a) to the mortgaged property, subject to any inter- est or interests not barred under section 3765 of this title. Any person remaining in possession of the mortgaged property after the passage of title shall be deemed a tenant at sufferance sub- ject to eviction under local law. (c) Death of purchaser If a purchaser dies before execution and deliv- ery of the deed conveying the property to the purchaser, the foreclosure commissioner shall execute and deliver the deed to a representative of the decedent purchaser’s estate upon payment of the purchase price in accordance with the terms of sale. Such delivery to the representa- tive of the purchaser’s estate shall have the same effect as if accomplished during the life- time of the purchaser. (d) Bona fide purchaser The purchaser of property under this chapter shall be presumed to be a bona fide purchaser. (e) No right of redemption (1) In general There shall be no right of redemption, or right of possession based upon a right of re- demption, in the mortgagor or others subse- quent to a foreclosure completed pursuant to this chapter. Page 1569 TITLE 12—BANKS AND BANKING § 3766 (2) Certain provisions Section 1710(l) of this title and section 1452c of title 42 shall not apply to mortgages fore- closed under this chapter. (f) Taxes When a mortgage foreclosed pursuant to this chapter is conveyed to the Secretary, no tax shall be imposed or collected with respect to the foreclosure commissioner’s deed (including any tax customarily imposed upon the deed instru- ment or upon the conveyance or transfer of title to the property). Failure to collect or pay a tax of the type and under the circumstances stated in the preceding sentence shall not be grounds for refusing to record such a deed, for failing to recognize such recordation as imparting notice, or for denying the enforcement of such a deed and its provisions in any State or Federal court. (Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.) Editorial Notes CODIFICATION Section is based on section 814 of title VIII of S. 2281, One Hundred Third Congress, as reported July 13, 1994, which was enacted into law by Pub. L. 103–327. § 3764. Record of foreclosure and sale (a) Statements included To establish a sufficient record of foreclosure and sale, the foreclosure commissioner shall in- clude in the recitals of the deed to the pur- chaser, or prepare as an affidavit or addendum to the deed, a statement setting forth— (1) the date, time, and place of the fore- closure sale; (2) that the mortgage was held by the Sec- retary, the date of the mortgage, the office in which the mortgage was recorded, and the liber number and folio or other appropriate de- scription of the recordation of the mortgage; (3) the particulars of the foreclosure com- missioner’s service of the notice of default and foreclosure sale in accordance with sections 3758 and 3760 of this title; (4) the date and place of filing the notice of default and foreclosure sale; (5) 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; and (6) the sale amount. (b) Effect of statements The items set forth in subsection (a) shall— (1) be prima facie evidence of the truth of such facts in any Federal or State court; and (2) evidence a conclusive presumption in favor of bona fide purchasers and encum- brancers for value without notice. Encumbrancers for value include liens placed by lenders who provide the purchaser with purchase money in exchange for a security interest in the newly-conveyed property. (c) Recordation of instruments The deed executed by the foreclosure commis- sioner, the foreclosure commissioner’s affidavit (if prepared) and any other instruments sub- mitted for recordation in relation to the fore- closure of the security property under this chap- ter shall be accepted for recordation by the reg- istrar of deeds or other appropriate official of the county or counties in which the security property is located upon tendering of payment of the usual recording fees for such instruments, and without regard to the compliance of those instruments with any other local filing require- ments. (Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.) Editorial Notes CODIFICATION Section is based on section 815 of title VIII of S. 2281, One Hundred Third Congress, as reported July 13, 1994, which was enacted into law by Pub. L. 103–327. § 3765. Effect of sale A sale, made and conducted as prescribed in this chapter to a bona fide purchaser, shall bar all claims upon, or with respect to, the property sold, for each of the following persons: (1) Notice recipients Any person to whom the notice of default and foreclosure sale was mailed as provided in this chapter, and the heir, devisee, executor, administrator, successor, or assignee claiming under any such person. (2) Subordinate claimants with knowledge Any person claiming any interest in the property subordinate to that of the mortgage, if such person had actual knowledge of the foreclosure sale. (3) Nonrecorded claimants Any person claiming any interest in the property, whose assignment, mortgage, or other conveyance was not duly recorded or filed in the proper place for recording or filing, or whose judgment or decree was not duly docketed or filed in the proper place for dock- eting or filing, before the date on which the notice of the foreclosure sale was first served by publication, as required by section 3758(3) of this title, and the executor, administrator, or assignee of such a person. (4) Other persons Any person claiming an interest in the prop- erty under a statutory lien or encumbrance created subsequent to the recording or filing of the mortgage being foreclosed, and attach- ing to the title or interest of any person des- ignated in any of the foregoing paragraphs. (Pub. L. 103–327, title II, Sept. 28, 1994, 108 Stat. 2316.) Editorial Notes CODIFICATION Section is based on section 816 of title VIII of S. 2281, One Hundred Third Congress, as reported July 13, 1994, which was enacted into law by Pub. L. 103–327. § 3766. Computation of time Periods of time provided for in this chapter shall be calculated in consecutive calendar days,