Full question:
Is it a normal procedure for Banks to return the signed original mortgage note stamped PAID In Full to the borrower after a non-judicial foreclosure?
- Category: Real Property
- Subcategory: Foreclosure
- Date:
- State: Hawaii
Answer:
In a non-judicial foreclosure, the property is sold at auction to the highest bidder, who pays with cash or certified funds. If the lender bids, they typically bid the lesser of the total debt plus costs or the fair market value determined by an appraisal. The bid price cannot be unreasonably low. If the lender does not seek a deficiency judgment, they usually bid the total debt plus costs. If they do intend to pursue a deficiency judgment, they should appraise the property and bid no more than its fair market value. Any deficiency must be pursued through the courts. When the lender bids the total debt, the mortgage note is considered paid in full.
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