When a borrower defaults on mortgage payments in Delaware, the servicer on behalf of the “lender” will eventually begin a foreclosure. Delaware Foreclosure law specifies how foreclosures work, and both federal and state laws give borrowers rights and protections throughout the process.
In Delaware, borrowers likely sign two documents: a promissory note and a mortgage. The promissory note is the document that contains the promise to repay the loan and includes all the repayment terms. The mortgage is the document that gives the lender a security interest in the property. A Mortgage is a Lien against the property. If a borrower fails to make the payments, the mortgage provides the lender with the right to sell the home at a foreclosure sale in order to recoup the money it loaned for the purchase.
Once a borrower defaults on a mortgage or deed of trust, the Delaware foreclosure process begins with the filing of a complaint in court. The borrower is given instructions to appear in court within 20 days. The borrower is tasked with providing evidence to the court as to why the foreclosure should not occur. The pre-foreclosure period of giving notice to the borrower could last up to three months if a borrower cannot be found to be officially given notice. If the borrower does not appear in court within the required time frame, the court could rule that the borrower is in default, with or without evidence from the borrower. Eleven days after the court rules the borrower in default, the lender may submit a request that the county sheriff conduct a foreclosure sale of the property.
Notice of Sale & Auction
Once the court instructs the sheriff to hold a sale, it typically takes between 2- and 3 months for the sheriff to properly advertise and give notice of the sale according to Delaware Foreclosure Law. The sheriff is required to post the sale notice on the property and in other public places at least 14 days before the sale date. The notice must include the date, time, and location of the sale, as well as a property description and the location of the property. The notice must also be delivered to the borrower a minimum of 10 days before the sale date. The notice of sale must be published in two local newspapers chosen by the sheriff, appearing no more than three times per week for two weeks before the sale.
The foreclosure sale is conducted by the sheriff and takes place either at the property or at the local county courthouse.
After the sale, confirmation by the court is required. This usually takes another 1 to 3 months. When complete, the sheriff transfers ownership to the winning bidder.
Prior to confirmation, the borrower may contest the sale procedure, however, the borrower has no right of redemption after the sale.