Mortgage foreclosure proceedings in the state of Delaware have mainly been in the
jurisdiction of the Superior Court. However for many years, case law has required that a
mortgage which is not under seal be foreclosed upon through the court of equity, the
Chancery Court. Monroe Park v. Metropolitan Life Ins. Co., 457 A.2d 734, 736 (Del.
1983). In the Monroe Park case, the court specifically stated that “….unless the seal
requirement is abolished by statute, a mortgage must be under seal to be enforceable
by law.” Earlier this year, the necessary abolishment finally occurred.
House Bill 353 was signed by the Governor on June 28, 2016. This bill abolished the
requirement that a foreclosure action on a mortgage which is not under seal must be
heard in the Court of Chancery. The new statute, codified at 25 Del.C. § 2101(b), is
beneficial to borrowers and lenders alike. Bringing all mortgage foreclosure proceedings
within the jurisdiction of one court provides more continuity of decision making, as the
judges of the Superior Court see significantly more foreclosure actions that those in the
Chancery Court. Additionally, HB 353 provides a more expeditious process, as the
Superior Court allows for the entry of default judgment in those situations where the
borrower does not appear or respond. An action in Chancery requires a motion, notice
and a hearing which typically added 2-3 months to the foreclosure process despite the
fact that the matter was uncontested. Finally, the Superior Court and the Department of
Justice administer a mediation program which became mandatory in 2012. (See 10
Del.C. §5061, et. al.) For those cases which used to be heard in the Court of Chancery,
borrowers were not afforded this opportunity to mediate with the lender. As a result of
the statutory change, all borrowers now have equal access to this program.
While there is often comfort in long standing traditions and well-established laws,
sometimes, change is good.
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