Sheriff Sale

Massachusetts Bankruptcy Lawyers Anthony Bucacci and Robert Simonian (508)673-9500

What Is a Sheriff’s Sale?

In a sheriff’s sale, law enforcement sells off properties that are in the end stage of foreclosure.

If you default on your mortgage loan, the lending bank can go through a specific legal process called “foreclosure” to sell your home to repay the outstanding debt. Depending on state law and the circumstances, the bank will either:

  • file a lawsuit in court to foreclose (a judicial foreclosure), or
  • follow specific out-of-court procedures, which are set out in state law, to complete a nonjudicial foreclosure.

After the bank fulfills all of the legal requirements for foreclosure, the home is sold to a new owner at a public sale. With judicial foreclosures, a sheriff’s sale is customarily used as this last step in the foreclosure process. The successful bidder at the sale becomes the new owner of the property.

How Does a Sheriff’s Sale Work?

A sheriff’s sale is usually an auction, which local law enforcement conducts. The sale is open to the public. The sale typically either takes place in the sheriff’s office or at the county courthouse, frequently on the front steps. Some auctions are held online. Once completed, a sheriff’s deed is issued, giving the home’s title to the high bidder, and the deed is recorded in the county records.

Property Tax Sales

Property tax sales and foreclosure sales are separate processes, but depending on state law and local procedures, either might involve a sheriff’s sale. This article focuses on sheriff’s sales for properties in foreclosure due to unpaid mortgage payments.

Notice of a Sheriff’s Sale

Homeowners generally get notice of a sheriff’s sale in the foreclosure paperwork or through a mailed notice of sale. Also, advertisements of foreclosure sales are normally published in newspapers of general circulation, typically four to six weeks before the sale. Many county sheriffs also maintain a list in their office or on a website of the properties going to auction.

The Foreclosing Bank Is Usually the High Bidder

The foreclosing bank submits the first bid at the auction, which is a credit bid. With a credit bid, the bank gets a credit in the amount of the borrower’s debt. The bank can bid the full amount of the debt, including foreclosure fees and costs, or it might bid less. Most of the time, the bank is the winning bidder at the sale because no one else tries to buy the property. If the bank buys the property at the sale and gets title to the home, the property is considered “Real Estate Owned” (REO).

You Might Be Liable for a Deficiency Judgment

When the winning bid at the sheriff’s sale is less than the borrower’s total debt, the bank might be able to seek a deficiency judgment against the foreclosed homeowner. Whether or not the bank can get a deficiency judgment depends on state law.

Other Parties Can Also Bid

After the bank makes its credit bid, another person or entity can submit a higher bid and win the auction. Unlike the bank, a third party will likely need to put down a money order or certified check for a percentage of the property price at the time of the sale. This requirement varies from place to place. Some places require the winning bidder to pay a specified amount, say $10,000, immediately after the sale, with the balance due shortly after that. If the winning bidder doesn’t pay the balance within a set time frame, the deposit might become non-refundable, and the property could be re-listed. Or the purchaser might have to pay the full amount of the winning bid at the time of the sale. The buyer then gets the property in “as is” condition.

Again, the Bank Might Be Able to Get a Deficiency Judgment

If a third party is the high bidder at the auction, the proceeds are used to repay the borrower’s debt. But if the sale amount isn’t sufficient to pay off the full amount of the debt, the bank might be able to (again, if state law allows it) get a deficiency judgment against the foreclosed homeowner.

What Is a Trustee’s Sale?

A trustee’s sale is effectively the same as a sheriff’s sale. It is the last step in a nonjudicial foreclosure. The main difference is that a trustee, the party that handles the nonjudicial foreclosure process in some states, holds the auction.

What Homeowners Can Do to Stop a Sheriff’s Sale

As a homeowner, you can take action to try to prevent a sheriff’s sale from happening and keep your home. You could potentially, depending on your circumstances, as well as state and federal law:

  • challenge the foreclosure in court (check the foreclosure papers you received or consult with an attorney to find out the deadline to respond to the foreclosure action)
  • apply for a loan modification or other loss mitigation option (be sure to apply before any deadline under state law or federal law expires)
  • reinstate the loan (again, don’t miss the deadline set by state law or your mortgage contract)
  • file for bankruptcy, or
  • pay off the full amount of the mortgage debt.

What Happens After the Sheriff’s Sale

You might, depending on state law, also have options for a brief period after the auction. If state law provides a post-sale redemption period, you can repurchase the home and keep it. Or state law might give you the right to live in the home during the redemption period, even if you don’t exercise your right to redeem. But if you don’t move out when your legal right to occupy the home ends, you’ll most likely get evicted.

Under limited circumstances, you might be able to challenge the sheriff’s sale by filing a motion to set aside (nullify) the sale. A court might set aside the sale if you can show that there was fraud, mistake, or irregularity in the conduct of the sale. For instance, if the bank failed to send you appropriate notice or the auction wasn’t properly advertised in the newspaper as required, these failings can be grounds for an objection to the sale.

Getting Help From a Foreclosure Attorney

As with any legal situation, the law has many nuances and complexities that vary from state to state. If you’re going through a foreclosure and have further questions about the process, consider talking to a local foreclosure lawyer. If you want to learn about different alternatives to a foreclosure, like a modification or short sale, a HUD-approved housing counselor is an excellent resource that will help you at no cost.

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Mortgage Relief and Foreclosure Prevention

There will be a great need for mortgage relief and foreclosure prevention in Massachusetts and the entire country.  The CFPB stated today “we are at really an unusual point in history.”  Nobody has ever before seen this many mortgages in forbearance at one time that are expected to exit forbearance all at one time.”

This may be the calm before the storm. If mortgage companies don’t get it right when all these forbearance periods end.

With stimulus money and no federal student loan payments, people have been able to firm up their finances. People are paying off car loans, clearing off credit card debts or other old debt. Many are actually establishing a savings account for the first time in a long while.

What Mortgage Relief and Foreclosure Prevention is Expected

The CFPB hopes to have a plan to prevent a sharp rise in foreclosures this fall.  The present proposal would:

  • Establish a pre-foreclosure review period once forbearance ends
  • Delay the start of any Covid-related foreclosure to 2022
  • Provide mortgage servicers with streamlined loan modification options
  • Revise mortgage servicer communication rules to keep borrowers better informed.

Here is what to know.

The deadline for borrowers affected by Covid-19 to request or extend a forbearance plan is June 30.  This is also the end of a foreclosure moratorium on federally backed mortgages.  For borrowers who are behind in mortgage payments now, it’s imperative to act before June 30 to ask for a 180 day forbearance, and if needed, a second 180 day forbearance.  This will get you a year.  If that isn’t done, then the new CFPB rules would at least block servicers from filing a foreclosure lawsuit until after December 31, 2021.

The new rules if they are approved, will apply to all mortgages, not just those that are federally backed.

Certain fees such as late fees and stop payment fees would be waived.  If a loan modification were to include any catch up payments, servicers will not be allowed to charge extra fees or interest on those payments.  The new rules would be in effect until August 31, 2022 but may not apply to smaller lenders with less than 5,000 loans.

If you have the threat of a foreclosure, you can call us anytime or visit our website for more information.


Talk To Us About Your Options:

We always tell potential clients to talk to us first to see if bankruptcy is in their best interest. The consultation is always free. Talk with Attorney Robert Simonian or Attorney Anthony Bucacci in private and in total confidentiality to see if filing bankruptcy in Massachusetts is right for you.

We can almost always come up with a solution to your financial problem. We have filed over 10,000 cases in the past 26 years and there are very few scenarios that we have not seen. We are known for our hard work, diligence, creativity and problem solving abilities. Often we are the bankruptcy attorneys other attorneys come to with difficult cases. Call today to see what we can do for you and what options are available. Often people believe they are the only ones with financial problems and are embarrassed of their situation. This is simply not true and many famous people have had to file for bankruptcy to get a fresh start.

Why Call Bucacci & Simonian:

We are known as one of the best bankruptcy attorneys in Southeastern Massachusetts serving the Bristol County and Plymouth County areas. We can help you with mortgage foreclosure relief.  Please inquire with anyone as to our reputation. Reputation is everything and we are very proud of ours. We have received numerous awards from various agencies and courts including the Bankruptcy Court in Boston, Massachusetts.

Using our knowledge and skill we have had several clients complete their five year Chapter 13 bankruptcy plans where they own their home FREE & CLEAR OF MORTGAGES. We understand how important it is to save clients’ homes from foreclosure, keep their cars from being repossessed and stop creditors from suing them and attaching their wages or attempting to seize their assets. This can be stopped almost instantly and we make every effort to be very available to your clients and can accommodate emergency situations. One of our most famous cases involved saving a clients’s multi-family home.

What to Avoid:

Do not attempt to file for bankruptcy on your own if you are seeking mortgage foreclosure relief. You can make your situation much, much worse. If the bankruptcy petition is not correct you could lose your home, your car or possessions or you could be asked to file a different kind of bankruptcy where you have to make monthly payments when it could have been avoided. If you are not properly represented a bankruptcy trustee may foreclose on your house, allow your car to be repossessed, seize a tax refund or other assets. You could file under the wrong chapter, apply the wrong exemptions, fail to file all of the necessary forms or not understand the significance of important forms.

Protect Yourself:

Call us today for a free and complete bankruptcy consultation. We can protect you from your creditors and protect your home, cars, jewelry and other assets. Creditors and collection lawyers have a job to do and it may seem that they are heartless and will take anything they can from you. They are represented and you should be too. Call us today. The Federal Bankruptcy Court indicated that seeking the advice of a qualified attorney is strongly recommended.

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