Delaware Foreclosure Laws
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Delaware is referred to as a lien theory state wherein the property stays as a guarantee for the said home-loan. A mortgage is the document through which the lien is placed on the property.
Lenders in Delaware go through a judicial foreclosure process that is pursued through the court and the final ruling on the foreclosure is made by the court. The most prevalent procedure is called scire facias. The sale of the property then is through a publically notified sale. A superior court is one which has jurisdiction over foreclosures. A complaint, along with a lis pendens (a recorded document which is used to provide public notice about the property being foreclosed upon) needs to be filed in the court. To respond, the borrower (defendant) is given a twenty day period.
The scire facias process is one of its kinds, where a defence has to be presented by the borrower showing that the mortgage on which the action is taking place is not in default. The lender, in this case, does not have to prove the default. A fourteen day notice needs to be given before the scheduled foreclosure sale.
The legal paperwork is called mortgage or note, and in commercial transactions, a security agreement. There are instances when the security agreement is fused with the mortgage document. In order to authenticate the loan in question and its repayment terms, which are included in the note, a mortgage needs to be filed.
Keeping in mind, the schedule of the court, it generally takes around 175 to 200 days for an uncontested foreclosure to come into effect. If the borrower chooses to contest the action, and if a delay or adjournment of the hearing is sought, or if the borrower ends up filing for bankruptcy, the process can be deferred.
Delaware does not have a statutory right of redemption post confirmation. A foreclosed property cannot be reclaimed by the owner upon payment of the unpaid loan and costs. After the foreclosure sale, a confirmation hearing is usually held on a thirty day notice. A property can usually be redeemed by the borrower during this period, but not after.
If a property ends up selling for less than the outstanding amount on the loan at the public sale, the lender may obtain a deficiency judgment. This results in the borrower owing to the lender the difference of the original loan amount and what the property was sold for at the auction.
Foreclosures in Delaware are governed by the laws present in the Delaware Code: Title 10 (Courts and Judicial Procedure), Part III Procedure, Chapter 49. Executions, Subchapter XI, Scire Facias on Mortgage.
