1.2.13 Is It Possible to Set Aside the Foreclosure Sale?
Generally, an irregularity in the foreclosure process, including an unconscionably low sales price, may be grounds to invalidate a completed foreclosure sale. If the mortgage was foreclosed upon by power of sale, the homeowner must generally initiate an action to set aside the sale. If the foreclosure was conducted by judicial process, the homeowner may file a motion in the foreclosure action to set aside the foreclosure judgment or to attack the sale. Some states have sale confirmation processes in which objections to the sale must be made. See § 10.3.3, infra. An advocate should consider the following:
- ● Was there any irregularity in the conduct of the sale? See § 10.3.3.2, infra.
- ● Did the homeowner receive all the required notices? Was the sale properly advertised? See §§ 10.3.3.3, 10.3.3.4, infra.
- ● Was the sales price grossly inadequate? Was this inadequate price coupled with some irregularity in the sale, or unfair action by the mortgage holder? See § 10.3.3.5, infra.
- ● Is filing bankruptcy advisable? In some states, a debtor can cure a default on a home loan in a chapter 13 bankruptcy, even after a foreclosure auction has taken place. See § 10.3.4, infra.
- ● Can the consumer redeem the property? In some states, a right of redemption allows the borrower to retain the home after a sale by paying the balance of the mortgage, plus foreclosure costs. Some borrowers can redeem through refinancing the debt or curing the arrearage through a bankruptcy. See §§ 9.4.2, 10.2.2, infra.