In an effort to modernize the process for the sale of foreclosed-upon property and extend participation to more members of the public, the Senate Community and Urban Affairs Committee advanced legislation sponsored by Senator Troy Singleton that would permit online foreclosure sales in an electronic, online forum that is open to the public.
“Currently, public foreclosure auctions are generally held at county administration buildings, limiting the number of people who can participate,” said Senator Singleton (D-Burlington), the Chair of the Senate Community and Urban Affairs Committee. “Moreover, evidence from jurisdictions that have permitted online sales indicates that, due to increased participation in the bidding process, the proceeds from such sales are higher than traditional, in-person foreclosure sales. This benefits both creditors and debtors, while freeing up county employees to spend their time on other responsibilities.”
The bill, S-2639, would authorize a sheriff, or other officer or person who is authorized to conduct such a sale of real estate, to execute the sale through online means and to contract with a vendor for online foreclosure sale services. The total of all fees charged by a vendor or entity to the sheriff or other individual authorized to conduct the sale would be capped at $1000 per auction, and would be taken directly from a purchaser’s deposit, and not reduce or impact sheriff’s fees. In addition, vendors would still be required to provide a non-electronic option for bidders.
All bidders in the online foreclosure sale would be required to have their identity verified prior to placing a bid, complete a registration process in which they provide any information necessary to properly contact them and complete the sale, and provide information necessary to be checked against the federal Office of Foreign Assets Control Sanctions List prior to the finalization of the purchase.
The bill was advanced in a unanimous vote.