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Buyer’s Remorse: Vacating a Foreclosure Sale You Won by Mistake
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Buyer’s Remorse: Vacating a Foreclosure Sale You Won by Mistake

January 9, 2023 Banking & Financial Services Industry Legal Blog

Reading Time: 3 minutes

Did you win a foreclosure sale, only to find out later that you did not get what you thought you were bargaining for?  If so, you then started wondering what you could do about it.  Can you get the sale vacated and set aside, and get your purchase money back?  In most cases, the answer is “no,” and you are stuck with the property.  However, there is a limited set of circumstances that may allow you to fix your mistake by getting the sale vacated.

Foreclosure document passing between people

Florida Courts have held that a foreclosure sale may be vacated and set aside on equitable grounds due to surprise, accident, or mistake imposed on complainant, and/or irregularity in the conduct of the sale. See Morain-Allen Co. et al., v. Brown et al., 98 FL. 203 (FLA.1929); Arsali v. Chase Home Finance, LLC., et al., 121 So.3d 511 (FLA. 2013).  In Arsali v. Chase Home Fin. LLC, 121 So. 3d 511, 517 (Fla. 2013), the Florida Supreme Court provided “that proof of an inadequate bid price is not a necessary requirement in an action to set aside a judicial foreclosure sale,” rather, the Court recognized that equitable considerations alone suffice to vacate a foreclosure sale.  One such equitable ground for vacating a judicial sale is mistake. See e.g. Kerrigan v. Mosher, 679 So. 2d 874, 875 (Fla. 1st DCA 1996) (vacating the foreclosure sale due to a unilateral mistake and because the property was sold for inadequate consideration).

Foreclosure sales may also be vacated pursuant to Rule 1.540(b), Florida Rules of Civil Procedure.  Rule 1.540(b) provides in relevant part:

(b) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud; etc. On motion and upon such terms as are just, the court may relieve a party or a party’s legal representative from a final judgment, decree, order, or proceeding for the following reasons:

  1. mistake, inadvertence, surprise, or excusable neglect;


(3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party;

Fla. R. Civ. P. 1.540; see also Goldfarb v. Daitch, 696 So. 2d 1199 (Fla. 3d DCA 1997) (affirming “order of the trial court that, among other things, granted appellee Daitch’s ‘Verified Emergency Motion to Vacate Order of Disbursement of Funds’ filed pursuant to Florida Rule of Civil Procedure 1.540.”)  

If your case is one of your mistake and surprise, misrepresentation or misconduct (possibly fraud) on behalf of the lender, and a substantial unconscionable windfall to the borrower, then equity should dictate vacating the foreclosure sale.  Did you purchase the property for an amount substantially greater than the judgment amount, based on your belief that the judgment was on the first mortgage, and that the property would be free and clear of all inferior liens after the sale?  If so, you should immediately contact an attorney to discuss your options for promptly objecting to the sale.

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