According to RealtyTrac (an online marketplace for foreclosure properties and real estate data), Delaware has one of the highest foreclosure rates in the country as of early 2014 with one in every 657 homes in foreclosure. If you’re facing a Delaware foreclosure, you should 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 prior to 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 below along with citations to the statutes so you can read the law yourself.
The citations to Delaware’s foreclosure statutes are primarily found in Delaware Code Annotated Title 10, Chapter 49, Sections 5061 through 5067.
You can find a link to the Delaware Code on the State of Delaware’s website at http://delcode.delaware.gov. If you need help locating the statutes, see Finding Your State’s Foreclosure Laws.
The important parts of Delaware’s foreclosure laws are summarized below. You can find more detailed articles on various aspects of Delaware’s foreclosure law in Nolo’s Delaware Foreclosure Law Center.
Delaware foreclosures are judicial, which means the lender must sue the borrower in court in order to foreclose.
Delaware law requires the following notices.
Notice of intent to foreclose. Prior to initiating 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.
Notice regarding alternatives to foreclosure. In Delaware, the foreclosing party must give the borrower an opportunity to apply for an alternative to foreclosure under federal loss mitigation programs such as the Home Affordable Modification Program (HAMP) and the Home Affordable Foreclosure Alternatives Program (HAFA). To meet this requirement, in its notice of intent to foreclosure the foreclosing party will include a list of the loss mitigation programs that it participates in and instructions on how to apply for help under those programs. Del. Code Ann. tit. 10, § 5062A.
Summons and complaint. To officially start the foreclosure, the foreclosing party files a lawsuit in court and provides notice of the suit to the borrower by serving him or her with 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. (Learn more about the difference between a foreclosure summons and complaint.)
Mediation notice. 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. (Learn more about foreclosure mediation in Nolo’s article Delaware's Foreclosure Mediation Program.)
Notice of sale. 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.
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 may be eligible for the program if he or she has had a loss of 15% or more of his or her income due to either:
To learn more about the eligibility criteria for DEMAP and how the program works, go to www.destatehousing.com/HomeOwnership/hb_demap.php.
“Reinstating” is when you catch up on the defaulted mortgage's missed payments (plus fees and costs) in order to stop a foreclosure. (Learn more about reinstatement to avoid foreclosure.)
Delaware law does not provide the borrower with the right to reinstate before the sale. However, the terms of the mortgage contract may permit the borrower to reinstate or the foreclosing party may agree to a reinstatement.
In some states, you can redeem (repurchase) your home within a certain period of time after the foreclosure.
While there is no statutory post-foreclosure right to redeem in Delaware, 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. (To get details on redemption rights in Delaware, see Nolo’s article If I lose my home to foreclosure in Delaware, can I get it back?)
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. (For a summary of the deficiency law in Delaware, see Delaware Laws on Post-Foreclosure Deficiency Judgments.)
If the former homeowners don’t leave the home after a Delaware foreclosure, the foreclosing party may proceed with an eviction as an extension of the foreclosure action.