Delaware Foreclosure Laws: Process, Timeline and Your Rights

Judicial. After a default, the lender forecloses by filing a lawsuit (a writ of "scire facias" on the mortgage) in the Superior Court of the county where the property is located. If the lender wins, the property is sold at a sheriff's sale, which the court must confirm.

For an owner-occupied 1- to 4-family primary residence, the lender must send a "Notice of Intent to Foreclose" to all borrowers by both certified mail and first-class mail after the default, and cannot file the foreclosure until 45 days after it is sent (with exceptions such as abandoned property, small seller-financers, voluntary surrender, or certain bankruptcy situations). The notice must carry a required English/Spanish heading ("TAKE ACTION TO SAVE YOUR HOME FROM FORECLOSURE") and information about help. The complaint must then be served with a Notice of Foreclosure Mediation, and tenants and lienholders must receive written notice under court rules. Notice of the sheriff's sale is given as in other execution sales.

For a covered owner-occupied home, the foreclosure cannot be filed until 45 days after the Notice of Intent to Foreclose is sent. In mediation-eligible cases, the lender cannot seek judgment until the day after the scheduled mediation conference, and the homeowner's answer is timely if filed on or before the date of any scheduled mediation conference. No judgment may be entered (and no sheriff's sale held) on an owner-occupied 1- to 4-family home until the lender files an affidavit that the homeowner had the chance to apply for loss-mitigation programs.

The statute provides that the buyer at a confirmed sheriff's sale in a mortgage foreclosure holds the property "discharged from all equity or redemption" and from encumbrances made by the borrower. The Delaware mortgage foreclosure statutes reviewed do not provide a post-sale redemption period.

Yes. Delaware has an Automatic Residential Mortgage Foreclosure Mediation Program for foreclosures of owner-occupied 1- to 4-family primary residences (except certain small seller-financed mortgages). The required notice tells homeowners that a mediation conference will be scheduled, that the lender cannot seek judgment until the day after that conference, and that to participate effectively they must meet with a HUD-approved housing counselor and certify their intent to participate within 30 days. Mediation is face-to-face with the lender and can explore options such as loan modification, short sale or deed in lieu.

Tenants are not required to be named as defendants in a mortgage foreclosure, but they must be given written notice of the foreclosure in the manner set by the Superior Court civil rules; a copy of the mediation notice must also accompany the posted and mailed Notice to Lienholders and Tenants.

A common interest community association has a statutory lien on a unit for assessments and fines, along with related fees, interest, court costs and reasonable attorney's fees. The lien generally has priority over a first or second mortgage only for up to six months of regular common expense assessments, and only if the association has recorded a required contact document. For condominiums and planned communities the lien is foreclosed like a mortgage on real estate (or by other procedures in the declaration), but only if the owner owes at least 3 months of assessments and the executive board votes to foreclose on that unit; an association owed only fines must first get a judgment. The lien is extinguished unless enforcement starts within 3 years after the full amount becomes due. The association may also sue the owner to collect or take a deed in lieu of foreclosure.

Yes. Under the Buyer Property Protection Act, a seller of residential real property (1 to 4 dwelling units) must disclose in writing to the buyer and agents all known material defects. The disclosure must be made before the seller signs the listing agreement and updated for material changes before settlement. Sellers must also give buyers any radon test information they have and notify them of known radon hazards. Some transfers are excluded.

When a county sells real estate for delinquent taxes under the monition method, the owner may redeem within 60 days after the court approves the sale by paying the buyer the purchase price plus 15%, plus all costs (or paying it into court if the buyer refuses or cannot be found). If not redeemed, the buyer may petition the Superior Court for a sheriff's deed.

The Delaware Department of Justice runs a toll-free foreclosure hotline, (800) 220-5424, and an email address (mortgage.mediation@delaware.gov) for information about the mediation program and free housing counseling. It links to a list of HUD-approved housing counseling agencies and to the Delaware State Housing Authority's homeowner relief resources.