12 U.S.C. § 3760: Conduct of sale; adjournment

Summary

Foreclosure sales must be public auctions held between 9:00 AM and 4:00 PM local time. The sale must take place where the notice says, at a usual place for real estate auctions in the county, at a courthouse, or on the property being sold. If the property is in more than one county, the sale may be in any one of those counties. If more than one property is being sold, the foreclosure commissioner decides the order. The foreclosure commissioner must run the sale fairly. The commissioner must accept written, sealed single-price bids from the Secretary and others and announce them at the sale. The commissioner can act as auctioneer or hire one and pay them from the sale commission. The Secretary and anyone who submitted a written single-price bid may bid. The commissioner, close relatives, related businesses, and employees may not bid, except they may be directed to bid for the Secretary. The commissioner may cancel or postpone the sale if it would be unfair or more time is needed to consider withdrawing the property. A postponement can be to a later hour the same day or for 9 to 31 days, with a revised notice published on any 3 separate days before the new date and mailed at least 7 days before. The commissioner can require a cash deposit as stated in the notice. A winning bidder who breaks the sale terms may lose the deposit or owe costs. Sales held under these rules are legally presumed to have been fair and the price presumed to be the fair market value.

Title 12, §3760

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(a)In general

(1)Manner and time

A foreclosure sale pursuant to this chapter shall be held at public auction and shall be scheduled to begin between the hours of 9 o’clock ante meridian and 4 o’clock post meridian local time.

(2)Location

The foreclosure sale shall be held at a location specified in the notice of default and foreclosure sale and such location shall be at a place where foreclosure real estate auctions are customarily held in the county or counties in which the property 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 1 of the counties in which any part of the security property is situated.

(3)Sale of multiple properties

The foreclosure commissioner may designate the order in which multiple security properties are sold.

(b)Duties of foreclosure commissioner

(1)Conduct of sale

(A)In general

The foreclosure commissioner shall conduct the foreclosure sale in accordance with the provisions of this chapter and in a manner fair to both the mortgagor and the Secretary.

(B)Written bids

Written one-price sealed bids shall be accepted by the foreclosure commissioner from the Secretary and other persons for entry by announcement by the foreclosure commissioner at the sale.

(C)Auctioneer

The foreclosure commissioner may serve as auctioneer, or, in accordance with regulations of the Secretary, may employ an auctioneer to be paid from the commission provided for in section 3761(5) of this title.

(2)Eligible participants

(A)In general

The Secretary, and any other person who has submitted a written one-price bid, may bid at the foreclosure sale.

(B)Prohibited participants

The foreclosure commissioner or any relative, related business entity, or employee of the foreclosure commissioner or a related business entity shall not be permitted to bid in any manner on the security property subject to foreclosure sale, except that the foreclosure commissioner or an auctioneer may be directed by the Secretary to enter a bid on the Secretary’s behalf.

(c)Adjournment or cancellation of sale

(1)General authority

The foreclosure commissioner may, before or at the time of the foreclosure sale, adjourn or cancel the foreclosure sale if the commissioner determines, in the commissioner’s discretion, that—

(A)circumstances are not conducive to a sale which is fair to the mortgagor and the Secretary; or

(B)additional time is necessary to determine whether the security property should be withdrawn from foreclosure, as provided in section 3759 of this title.

(2)Adjournment to same or later day

The foreclosure commissioner may adjourn a foreclosure sale to a later hour the same day by announcing or posting the new time and place of the foreclosure sale, or may adjourn the foreclosure sale for not less than 9 and not more than 31 days, in which case the commissioner shall serve a notice of default and foreclosure sale revised to recite the fact that the foreclosure sale has been adjourned to a specified date, as well as any other information the foreclosure commissioner deems appropriate. Such notice shall be served by publication and mailing in accordance with section 3758 of this title, except that publication may be made on any of 3 separate days before the revised date of foreclosure sale, and mailing may be made at any time not less than 7 days before the date to which the foreclosure sale has been adjourned.

(d)Cash deposits

The foreclosure commissioner may require a bidder to make a cash deposit in an amount or percentage set by the foreclosure commissioner and stated in the notice of foreclosure sale before the bid is accepted. A successful bidder at the foreclosure sale who fails to comply with the terms of the sale may be required to forfeit the cash deposit or, at the election of the foreclosure commissioner after consultation with the Secretary, shall be liable to the Secretary for any costs incurred as a result of such failure.

(e)Presumption of validity of sale

Any foreclosure sale held in accordance with this chapter shall be conclusively presumed to have been conducted in a legal, fair, and reasonable manner. The sale price shall be conclusively presumed to be reasonable and equal to the fair market value of the property.

Editorial Notes

Codification Section is based on section 811 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.

§3760 Conduct of Sale; Adjournment

Summary

Title 12, §3760

Notes & Related Subsidiaries

Editorial Notes

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