Some time ago, a lender made a loan to the owner of commercial real property. The property owner defaulted on his loan payments. The lender foreclosed, and the property was sold at a foreclosure sale.
So far, so good.
But after the foreclosure sale, the property owner hired an attorney and filed suit against the lender for wrongful foreclosure. The lawsuit contained a laundry list of every possible defect in the foreclosure proceedings.
A review of the claims in the lawsuit made it clearly apparent that the attorneys filing the lawsuit had simply taken every single procedural step involved in a foreclosure proceeding and claimed that the foreclosing lender had incorrectly followed every one of them. It was equally clear that the foreclosing lender had properly followed all of the necessary steps involved in the foreclosure.
Except one. Before a property can be sold at foreclosure, a notice of the date, time and location of the sale must be published in a newspaper of general circulation. Oftentimes these notices are published as a routine matter, and after the foreclosure sale is completed nobody may ever take the time to review such published notices.
Unfortunately for the foreclosing lender in this case, the time of the foreclosure sale was published as “20:00 a.m.” That’s a problem. Potential buyers who might have shown up at the sale may not have received proper notice – and so the sales price might have been lower than it otherwise should have been. Whether or not such a defect is adequate grounds to set aside a foreclosure sale and conduct it a second time is a matter for the courts to decide. But the technical details of the published time for a foreclosure sale can be critical.