42 U.S.C. § 1452c: Nullification of right of…

Summary

When HUD or its foreclosure agent forecloses on a single‑family mortgage given for a loan under section 1452b, the person who buys the property at the foreclosure sale gets the title and the right to possess it, except for any earlier liens. If the property is vacant and abandoned, the borrower or anyone else cannot “redeem” the property or regain possession after the sale. The proper state official or trustee must sign and give a deed or other paper that transfers title to the buyer, following local procedures and ignoring any claim of redemption. If another lender forecloses and HUD buys the property, HUD gets title and possession the same way and there is no right of redemption. To prove title, court foreclosures must say in the papers and judgment that the sale follows these rules and there is no redemption right. Power‑of‑sale foreclosures must include that statement in the sale ad and in the deed or an affidavit. “Mortgage” means any instrument that creates a lien to secure payment. “Single‑family mortgage” covers a 1- to 4-family residence.

Title 42, §1452c

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(a)In general

Whenever with respect to a single family mortgage securing a loan under section 1452b of this title, the Secretary of Housing and Urban Development or its foreclosure agent forecloses in any Federal or State court or pursuant to a power of sale in a mortgage, the purchaser at the foreclosure sale shall be entitled to receive a conveyance of title to, and possession of, the property, subject to any interests senior to the interests of the Secretary. With respect to properties that are vacant and abandoned, notwithstanding any State law to the contrary, there shall be no right of redemption (including all instances any right to possession based upon any right of redemption) in the mortgagor or any other person subsequent to the foreclosure sale in connection with such single family mortgage. The appropriate State official or the trustee, as the case may be, shall execute and deliver a deed or other appropriate instrument conveying title to the purchaser at the foreclosure sale, consistent with applicable procedures in the jurisdiction and without regard to any such right of redemption.

(b)Foreclosure by others

Whenever with respect to a single family mortgage on a property that also has a single family mortgage securing a loan under section 1452b 1 of this title, a mortgagee forecloses in any Federal or State court or pursuant to a power of sale in a mortgage, the Secretary of Housing and Urban Development, if the Secretary is purchaser at the foreclosure sale, shall be entitled to receive a conveyance of title to, and possession of, the property, subject to the interests senior to the interests of the mortgagee. Notwithstanding any State law to the contrary, there shall be no right of redemption (including in all instances any right to possession based upon any right of redemption) if the mortgagor or any other person subsequent to the foreclosure sale to the Secretary in connection with a property that secured a single family mortgage for a loan under section 1452b 1 of this title. The appropriate State official or the trustee, as the case may be, shall execute and deliver a deed or other appropriate instrument conveying title to the Secretary, who is the purchaser at the foreclosure sale, consistent with applicable procedures in the jurisdiction and without regard to any such right of redemption.

(c)Verification of title

The following actions shall be taken in order to verify title in the purchaser at the foreclosure sale:

(1)In the case of a judicial foreclosure in any Federal or State court, there shall be included in the petition and in the judgment of foreclosure a statement that the foreclosure is in accordance with this subsection and that there is no right of redemption in the mortgagor or any other person.

(2)In the case of a foreclosure pursuant to a power of sale provision in the mortgage, the statement required in paragraph (1) shall be included in the advertisement of the sale and either in the recitals of the deed or other appropriate instrument conveying title to the purchaser at the foreclosure sale or in an affidavit or addendum to the deed.

(d)Definitions

For purposes of this section: (1)

(2)The term “single family mortgage” means a mortgage that covers property that includes a 1- to 4-family residence.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 1452b of this title, referred to in subsecs. (a) and (b), was repealed by Pub. L. 101–625, title II, § 289(b)(1), Nov. 28, 1990, 104 Stat. 4128. Codification Section was enacted as part of the Department of Housing and Urban Development Reform Act of 1989, and not as part of the Housing Act of 1949 which comprises this chapter.

§1452c Nullification of Right of Redemption of Single Family Mortgagors Under Rehabilitation Loan Program

Summary

Title 42, §1452c

Notes & Related Subsidiaries

Editorial Notes

References in Text

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