Town of Madison v. Miller

The Town of Madison obtained a judgment of foreclosure by sale to satisfy unpaid property taxes. The law requires that, with one exception, the successful bidder at a foreclosure sale must pay its bid into court in cash. The exception is for the foreclosing party. Judgments of foreclosure by sale typically require all bidders except the foreclosing party to make a deposit. The judgment in this case also relieved the putative first mortgagee, Mortgage Electronic Registration Systems, Inc. ("MERS"), of the obligation to make a deposit. Waiver of the deposit suggested that MERS was being treated like a foreclosing party and would not have to pay its full bid into court. This would have relieved MERS of the deposit obligation and possibly avoided the requirement that MERS pay its total bid into court in cash. In effect, MERS was trying to set the stage to take title to the house by paying only the taxes. We pointed out to the court that the law required MERS to pay its full bid in cash and did not authorize relieving MERS of the deposit obligation. The court effectively agreed with us and vacated that part of the judgment waiving the deposit from MERS. Confronted with the possibility that it would have to pay several hundreds of thousands of dollars into court in cash or lose its putative mortgage, MERS arranged for payment of the taxes and stopped the foreclosure sale. The Millers remain in their home.