Delaware Home Foreclosure Laws

If you're facing a Delaware foreclosure, it's a good idea to learn as much as you can about the state's foreclosure laws, including:

• the steps in the foreclosure process
• how much and what type of notice you'll receive before the sale
• whether you get the right to reinstate the mortgage before the sale, and
• if you could be liable for a deficiency judgment after the foreclosure.

Below are many of the key aspects of Delaware foreclosure law, along with citations to the statutes so you can read the law yourself.

Summary of Delaware's Foreclosure Laws

Delaware foreclosures are judicial, meaning the lender must sue the borrower in court to foreclose.

Notice of Intent to Foreclose Before a Delaware Foreclosure

Before starting a foreclosure lawsuit, the foreclosing party must mail the borrower a 45-day notice of intent to foreclose if the home is an owner-occupied residential property that is one to four units. (Del. Code Ann. tit. 10, § 5062B.)

Summons and Complaint in a Delaware Foreclosure

The foreclosing party officially files a lawsuit in court to begin the foreclosure. It provides notice of the suit to the borrower by serving a summons and complaint. The borrower then has 20 days to respond. If the borrower fails to respond, the court will issue an order allowing the foreclosing party to sell the property. (Del. Code Ann. tit. 10, §§ 5061, 5063.)

Mediation Notice in a Delaware Foreclosure

Along with the summons and complaint, the foreclosing party must give eligible homeowners a notice about Delaware's Automatic Residential Mortgage Foreclosure Mediation Program. (Del. Code Ann. tit. 10, § 5062C.)

Notice of Sale in a Delaware Foreclosure

Under Delaware law, the borrower is entitled to a notice of sale ten days before the day of sale. The notice of sale must also be publicly posted and published in two local newspapers for two weeks prior to the sale. (Del. Code Ann. tit. 10, § 4973.)

Special Protections for Homeowners in Distress

Delaware has a special program, the Delaware Emergency Mortgage Assistance Program (DEMAP), which provides financial assistance (in the form of a loan secured by the home) to homeowners to help prevent the foreclosure of a primary residence.

A homeowner might be eligible for the program if they've had a loss of 15% or more of income due to either:

• involuntary loss of employment or reduction in hours, or
• inability to work or reduction in hours due to an injury or illness (including an injury or illness of an immediate family member for whom he or she is the primary caregiver).

To learn more about the eligibility criteria for DEMAP and how the program works, go to the State of Delaware's official DEMAP webpage.

Right to Reinstate the Mortgage Before the Foreclosure Sale in Delaware

"Reinstating" is when you catch up on the defaulted mortgage's missed payments (plus fees and costs) to stop a foreclosure.

Delaware law doesn't provide the borrower with the right to reinstate before the sale. But the terms of the mortgage contract might permit the borrower to reinstate, or the foreclosing party could agree to a reinstatement.

Right to Redeem After Foreclosure in Delaware

In some states, you can redeem (repurchase) your home by a particular deadline after the foreclosure.

While Delaware doesn't provide a statutory post-foreclosure right to redeem, the borrower has up until the court confirms the foreclosure sale to pay off the full amount of the outstanding debt and keep the home. (Del. Code Ann. tit. 10, §§ 5065, 5066.)

Deficiency Judgment Law in Delaware

When the total mortgage debt exceeds the foreclosure sale price, the difference is called a "deficiency." Some states allow the lender to seek a personal judgment (called a "deficiency judgment") against the borrower for this amount, while other states prohibit deficiency judgments with what are called "anti-deficiency laws."

In Delaware, the foreclosing party may get a deficiency judgment by filing a separate lawsuit after the foreclosure.

When to Seek Counsel

If you want to learn more about the foreclosure process in Delaware or want to find out if you have any potential defenses to a foreclosure, consider talking to a foreclosure lawyer.

It's also a good idea to make an appointment to speak to a HUD-approved housing counselor, especially if you want to learn about different loss mitigation options.