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Total Debt Bids in Kansas

Posted By USFN, Monday, October 14, 2019
Updated: Thursday, October 10, 2019

by Blair Gisi, Esq. 
SouthLaw, P.C.
USFN Member (IA, KS, MO, NE)

A persistent borrower who has appealed her foreclosure several times has forced the Kansas Court of Appeals to clarify its position on total debt bids.

Upon the third review of this case by the Court of Appeals (as noted in the outset of the opinion), the appellant in JPMorgan Chase Bank, Nat'l Ass'n v. Taylor, 2019 Kan. App. Unpub. LEXIS 575 (Ct. App. Aug. 30, 2019) sought reconsideration of the confirmation of sale arguing it was “manifestly unjust.”

The basis for appellant’s claim was that even though JPMorgan Chase had successfully bid its total debt, the fair market value of the property was $50,000 to $60,000 higher and, therefore, her equity was being “stolen” by JPMorgan Chase.

The appellant’s Motion for Reconsideration was denied by the District Court which found that the bid was adequate since it was for the full amount of the in rem foreclosure amount and pursuant to K.S.A. §60-2415, a sale for the full amount of the judgment, taxes, and interest and costs of sale shall be deemed adequate.  The court went on to further recognize that, “The district court is generally only required to consider the fair market value of the foreclosed property if the bid is ‘less than the full judgment, taxes, interest, and costs.’” Taylor at 8 citing Olathe Bank v. Mann, 252 Kan. 351, 362, 845 P.2d 639 (1993).

Based on the foregoing and the fact that there was no actual evidence presented to rebut the presumption that a full debt bid is confirmable, the Court of Appeals found no abuse of discretion by the district court in denying the Motion for Reconsideration.

It was also pointed out that while the appellant was arguing her equity was being “stolen”, even if the bid was for less than the fair market value, the appellant is entitled to redeem the property for that amount, so it is ultimately to her benefit since she could pay the lesser amount and retain her equity.

While this case does not drastically affect the foreclosure landscape in Kansas, it does serve as an important reminder of the utility in bidding total debt or waiving the personal deficiency in precarious or prolonged foreclosure cases.

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