Delaware Foreclosure Laws

Questions

Answers

How are mortgage liens treated in Delaware?

Delaware is known as a lien theory state where the property acts as security for the underlying loan. The document that places the lien on the property is called a mortgage.

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How are Delaware mortgages foreclosed?

In Delaware, the lenders go to court in what is known as a judicial foreclosure proceeding where the court must issue a final judgment of foreclosure. The most common procedure is known as scire facias. The property is then sold as part of a publicly noticed sale. The court with jurisdiction over a foreclosure is known as the Superior Court. A complaint is filed in the court along with what is known a lis pendens. A lis pendens is a recorded document that provides public notice that the property is being foreclosed upon. The defendant has twenty (20) days to respond. The scire facias method is unique in that the defendant has to present a defense that the subject mortgage upon which the action is based is not in default as opposed to lender having to prove it is in default. Notice must be given fourteen (14) days in advance of the foreclosure sale.

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What are the legal instruments that establish a Delaware mortgage?

The documents are known as the mortgage, note, and in a commercial transaction, a security agreement. Sometimes the mortgage document is combined with the security agreement. A mortgage is filed to evidence the underlying debt and terms of repayment, which is set forth in the note.

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How long does it take to foreclose a property in Delaware?

Depending on the court schedule, it usually takes approximately 175-200 days to effectuate an uncontested foreclosure. This process may be delayed if the borrower contests the action, seeks delays and adjournments of hearings, or files for bankruptcy.

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Is there a right of redemption in Delaware?

No, Delaware has no post confirmation statutory right of redemption, which allows a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs. Usually there is a confirmation hearing scheduled on thirty (30) days notice after the sale. A borrower can usually redeem during that period but not after.

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Are deficiency judgments permitted in Delaware?

Yes, a deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount that the underlying mortgage secures. This means that the borrower still owes the lender for the difference between what the property sold for at auction and the amount of the original loan.

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What statutes govern Delaware foreclosures?

The laws that govern Delaware foreclosures are found in Delaware Code : Title 10 (Courts and Judicial Procedure), Part III Procedure, Chapter 49. Executions, Subchapter XI, Scire Facias on Mortgage. To view these statutes on the Web, you can visit:


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