§3709 Presale reinstatement

Summary

The foreclosure commissioner must stop a foreclosure and cancel the sale only in certain cases. Except where other federal rules say otherwise, that can happen if the Secretary orders it before or at the sale; if the borrower applies at least three days before the sale and the commissioner finds the claimed default did not exist when the notice was served; or if, before the public auction ends, the borrower pays what would have been owed in principal and interest had the loan not been accelerated for a monetary default, or, for a nonmonetary default, cures the problem and pays all amounts due under the mortgage (but not extra sums that would have been due only because of acceleration), plus any secured expenditures and foreclosure costs eligible to come from sale proceeds. The Secretary can refuse cancellation if the owner has before caused a foreclosure to be stopped by curing a default. Before canceling for the reasons above, the commissioner must give the Secretary a reasonable chance to explain why the foreclosure should go forward. If a foreclosure is canceled, the mortgage continues as if the lender had not accelerated it, and a new foreclosure can later be started under the same rules.