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Real Property – Mortgages – Foreclosure Sale – Borrowers’ Cure – Return of Bid

After respondent placed the high bid at a power-of-sale foreclosure sale, the borrowers timely cured their default and reinstated their loan. Although the 10-day upset period had elapsed by the time respondent received a return of its deposit, the return of its deposit was all it was entitled to; its rights were not “fixed” at the end of the upset period.

This appeal is dismissed.

Respondent is not the real party in interest. In a foreclosure pursuant to power of sale, a third-party bidder has no interest in the underlying property or in the deed of trust pursuant to which that property is offered for sale.

Therefore, the third-party bidder has no legal right to force a forfeiture in satisfaction of the deed of trust. Foreclosure pursuant to power of sale is not a judicial proceeding, but rather a contractual proceeding with an overlay of judicial oversight.

Respondent placed a bid and tendered a deposit of $9,505 at the foreclosure sale and proceeded to wait for the upset bid period to expire and for the sale to confirm. However, as expressly provided in the “Notice of Foreclosure Sale,” and pursuant to the terms of the deed of trust and G.S. Chapter 45, the substitute trustee was unable to convey title because petitioners reinstated their loan.

The “Notice of Foreclosure Sale” provides the high bidder’s sole remedy is the return of the deposit. Respondent received its deposit 10 days after petitioners cured the default. The substitute trustee owes no further duty to respondent.


In re Menendez (Lawyers Weekly No. 011-181-18, 9 pp.) (Robert Hunter Jr., J.) Appealed from Guilford County Superior Court (Richard Gottlieb, J.) Drew Brown for respondent; Claire Collins, Hilton Hutchins Jr., Renner St. John and R. Robert El-Jaouhari for petitioners. N.C. App.


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