appellate court reviews the district court's approval of
the sale of foreclosed real estate at a sheriff's sale
only for abuse of discretion. A court abuses its discretion
if no reasonable person would agree with its decision or the
decision is based on a factual or legal error.
Under K.S.A. 60-2415, the court may decline to confirm a
sheriff's sale where the bid is substantially inadequate.
In this case, in which there was no deficiency judgment
against the borrower and the sheriff's sale bid was 86%
of the total judgment, the district court did not abuse its
discretion when it concluded the bid was not substantially
K.S.A. 2017 Supp. 60-261, if an error doesn't affect a
party's substantial rights, it's harmless and not
grounds for reversal. In this case, although the district
court initially granted the motion to confirm the
sheriff's sale before the time for other parties to
respond had expired, the court held a hearing later on a
motion to reconsider. Because the court's substantive
ruling was not an abuse of discretion and it ultimately gave
all parties the chance to be heard, the court's initial
error in acting too quickly in approving the motion is
harmless and not grounds for reversal.
4. In a
typical reverse mortgage, the borrower, age 62 or older,
takes out a loan, secured by a mortgage that allows the
borrower to take draws against the loan over time. Repayment
isn't required during the borrower's lifetime.
Because no repayments are made on the loan, the redemption
period under K.S.A. 2017 Supp. 60-2414(m) will be three
months, not the longer period available when loan default
occurs after one-third of the original indebtedness has been
from Riley District Court; John F. Bosch, judge. Affirmed.
K. Goldwyn, appellant pro se.
M. Haddad, and Beverly M. Weber, of Martin Leigh PC, of
Kansas City, Missouri, for appellee.
McAnany, P.J., Leben and Schroeder, JJ.
Goldwyn appeals the confirmation of the foreclosure sale of a
house she had inherited from her mother. Resolution of some
issues she raises may be instructive to Kansas citizens and
lawyers because of the context in which this case arises-the
use of what's known as a reverse mortgage.
mother, Bernice Enlow, took out the reverse mortgage for
$262, 500 in 2007 from Urban Financial Group. Using her home
as collateral, the reverse mortgage gave her the ability to
take loans-up to $262, 500-from Urban Financial Group. And
unlike traditional real-estate loans secured by a mortgage,
Enlow wouldn't have to make payments to repay the loans
she took out. Instead, the loan wouldn't become due and
payable until her death (assuming, as was true here, that the
home wasn't also the residence of a co-borrower, which
would have postponed repayment until both borrowers had
structured, this was essentially the reverse of a traditional
real-estate loan and mortgage. In the typical mortgage and
loan, the borrower receives the full loan amount at the
outset to buy the house. The borrower then pays the loan off
in installments over a period of years, with the mortgage
released when the loan (plus interest) is fully paid. In the
reverse mortgage, the borrower takes the loan proceeds out
over time and no payments are made on the loan balance during
the borrower's lifetime. Among other things, this lets a
retired person live off the equity in their home while
continuing to live there. See generally 24 C.F.R. §
206.1 et seq. (2017) (containing regulations for federally
insured reverse mortgages, which are available to homeowners
age 62 or older); Schieke, The Advisability of Reverse
Mortgage to Pay for Care Needs, 47 Md. B.J. 26 (May-June
2014) (providing an overview of reverse mortgage programs).
Enlow died, Goldwyn became the homeowner-but, at the
lender's option, all the advances received under the
reverse mortgage became due. When Goldwyn didn't pay that
balance-through refinancing or otherwise-that led to a
foreclosure judgment for $190, 446 in favor of Reverse
Mortgage Solutions, Inc., which had purchased the mortgage
from Urban Financial Group.
Goldwyn, now the homeowner, was the defendant in that
foreclosure lawsuit, the judgment was taken "in
rem" (Latin for "against a thing"), meaning
that the lender's sole recourse was against the property.
With an in rem judgment, the lender can take the real estate
and sell it to pay the judgment, but it can't collect
from the debtor's other assets.
that background on how Goldwyn ended up owning this house,
which was subject to a reverse mortgage, let's turn next
to how the mortgage-foreclosure process works. It came into
play here when Goldwyn either chose not to pay off the
outstanding loan (perhaps by getting a new loan from another
lender) or wasn't able to do so.
Kansas, mortgage-foreclosure proceedings happen in two steps.
First, the mortgage holder must obtain a foreclosure
judgment. In that stage, the court must determine whether
there has been a default in the mortgage, whether the
mortgage holder is entitled to judgment, and the amount and
form of the judgment. Second, after getting the foreclosure
judgment, the mortgage holder can proceed with a
sheriff's sale of the property. Title to the property
transfers to a new owner when the court approves ...