12 U.S.C. § 3710 — Foreclosure sale

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 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-