|
If you do not FULLY understand the foreclosure process outlined on this page and how it may apply to you please take advantage of our FREE consultation by clicking here.
Judicial foreclosure available: Yes
Non-Judicial foreclosure available: No
In Delaware, if a borrower defaults, the lender can take
several remedies simultaneously. The lender could sue to collect on the note
and foreclose the mortgage. A lender could also sue on the note first, and
pursue foreclosure later. However, the lender will only be permitted to recover
the amount unpaid on the loan. Usually, the speediest process is scire facias,
a procedure which contemplates a sale of the mortgaged property for a sum that
will pay the balance on the loan, or a transfer of title tot he lender, after
the property has been exposed at a public sale, in exchange for a credit
against some part of the balance on the loan, or up to the full balance owed on
the loan.
Scire Facias
Scire Facias is a proceeding in which the borrower must
show cause that there should be no foreclosure. Usually, upon breach of the
terms of the mortgage, such as through non-payment of the note or breach of the
mortgage conditions, the lender may seek a writ of scire facias from the
Superior Court in the county in which the mortgaged property is located. The
initial filing, which must be sworn to, consists of a Praecipe and Complaint.
The Praecipe calls upon the Prothonotary to issue the writ of scire facias. The
term scire facias is the name both of the write and the proceeding it
instigates. The writ is issued upon the default of the borrower in making
payments or observing mortgage conditions, and requires the borrower to show
cause why the mortgage should not be foreclosed and the property sold.
Once the writ is issued, it will be served upon the
borrower by the sheriff. If the sheriff goes out and tries to hand the borrower
the writ without success after repeated effort, which is called return non
est., then a default liberari judgment may be obtained. (At least two
separately issued consecutive writs must be returned non est.) If the borrower
is served with the writ, it will command the borrower to appear before the
court to show cause why the mortgage premises out not to be seized and sold to
pay off the mortgage, with interest, or else pay off the lender’s losses
due to the borrower’s non-performance. If the borrower fails to appear
within 20 days after being served with the writ of scire facias, then the
lender will obtain a default liberari judgment. Otherwise the borrower must
prove why the foreclosure should not take place. Unless the court is satisfied
with the explanation, the court will authorize the property to be seized to pay
off the mortgage.
Preliminary Notices
Posting
Notices of the sale must be posted publicly and on the
property in foreclosure at least ten days before the sale date.
Delivery
A copy of the notice must be run two weeks before the
sale.
Sale Procedures
Person Conducting the Sale
The sale itself will be conducted by the sheriff.
Place of Sale
The place of sale must be either at the court house
steps or at the site of the property in foreclosure.
Post-Sale Matters
The sale must be confirmed by the court. Once confirmed,
no redemption is possible. A deed will be executed by the Sheriff to convey
title to the purchaser. Deficiency judgments are possible, but only by a suite
on the note, in addition tot he scire facias.
Unusual Procedures
Since scire facias is purely a remedy at common law,
equity law does not play a role in the proceedings. Although mortgages can be
foreclosed by an equity suite in the Delaware Court of Chancery, this method is
seldom used. Strict common law has some unusual results, however. In
particular, the borrower’s counterclaims will not he heard at the hearing
on the scire facias, because they were not part of the original mortgage. Such
counterclaims must be pursued in a separate proceeding rather than as part of
the scire facias proceeding. However, all record owners acquiring title subject
to the mortgage (terre-tenants) must be joined in the scire facias proceeding.
Also persons who have equitable or legal interests of record, such as one
pursuant to a judicial sale, must be joined. These changes were made in 1986 to
correct a constitutional problem with the old procedure.
Redemption
Once a sale is confirmed by a court, no redemption is
possible. |
