In this case, a homeowner's association exercised its right under its Master Deed and conducted a non-judicial foreclosure sale to collect amounts owed by the homeowner to the association. Although the property was worth in excess of $300,000, the association purchased the property for the amount owed -- $12,000. The owner sued and asked the court to set aside the foreclosure.
In Tennessee, however, as long as the foreclosure sale is properly noticed, then "shocking inadequacy of the foreclosure sale price" is not grounds to set aside the sale. But, if sloppy bookkeeping makes it impossible to determine the correct amount owed on the date of the foreclosure sale, then the court of appeals says it is property to set aside the sale.
This case is scary for lenders as it states that the amount must be accurate. Generally, it is difficult to enjoin a foreclosure sale. But, it the lender cannot on the day of the foreclosure sale, provide an accurate accounting of the amount owed, then this case says the foreclosure sale should be set aside. Look for more lawsuits over foreclosure sales.
See Brooks v. Rivertown on the Island HOA
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