Abandonment

For residential property of four units or less, or three acres or less, abandonment shall be presumed in the following circumstances:

Personal Inspection

The lender has made a personal inspection of the premises and the inspection does not reveal anyone who is presently occupying or about to occupy the premises.

Borrower Fails to Respond to Proper Notice

The lender has posted a notice at the time the personal inspection was made, and mailed it by certified mail, return receipt requested, to the borrower's last known address. The notice must state that the lender considers the premises to be abandoned, and that the redemption period in such event will be only 30 days. If the borrower does not respond to these notices within 15 days by mailing to the lender (first class mail) a letter stating the premises are not abandoned, then the premises are considered to be abandoned. Obviously, a borrower who wants to preserve his or her rights should get busy and write the lender to show the premises are not abandoned or else the borrower will lose most of the benefits of the right of redemption.

Deficiency

A lender is restricted to foreclosing against the property as the sole remedy, unless the lender has a separate document that obligates the borrower to pay a sum certain, such as a promissory note, or the borrower has otherwise agreed to pay a sum in a specific amount stated in the mortgage document. In order to recover a deficiency amount, which would be the balance due on the mortgage minus the sum collected at the foreclosure sale (or credited if the lender bids by canceling out some of the borrower's obligation), the lender must file a lawsuit. The borrower can defend by showing the foreclosure sale price was less than the true value of the property at the time and place of the sale. If the sale was for substantially less than the true value, the deficiency sum the lender can recover may be either defeated or reduced by crediting the property's fair value against the unpaid loan balance at the time of the foreclosure.

However, these defenses do not apply if the lender forecloses by court action rather than by foreclosure by advertisement.

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