New-York tribune., 1916-07-25
Justice Guy Frowns Upon
Usual Foreclosure Sale
Announcements.
SAYS MERE DIAGRAM
WILL NOT SUFFICE
Owners Often Losers, lie Points
Out, Deficiency Judgments
Frequently Resulting.

Justice Charles l.. Guy, OF the Su-
preme Court, yesterday served notice
on referees in foreclosure proceedings
that he would not give judicial counte-
nance TO the practice, heretofore com
mon. of inadequate advertising OF real
estate TO be sold under foreclosure.
In an official memorandum he said
such action was contrary to the code
and frequently worked a great injury
to the owners of property TO be offered
for sale.
Justice Guy pointed out that II had
been the practice of some referees
merely 70 insert diagram OF the prop
erty TO be sold, with a brief description
thereof. which, the court suggested,
was hardly fair 10 the owner whose
entire equity might be wiped out be-
cause Of the insufliciency Of the ad-
vertisement by bringing at sale not
more than the amount OF the mort
gage and the expenses.
Called False Economy.
"This," said the justice, 'is false
| economy and is contrary to the spirit
sit in Part 2. Special Term, during the
coming week that all orders for the
sale Of real estate under foreclosure
which NAV be presented to me for
signature contain clause directing the
referee in his published advertisement
TO set forth a full description Of the
property as contained in the final judg-
ment."
The present system, the justice ex-
planned. did not create the proper com
petitive bidding at sales. Where the
bidding was limited, he said, the own
ers were losers. these losses often be-
ing serious, and not infrequently de-
ficiency judgments against the owner
resulted from inactive bidding.
"This courts attention has beer
called" continued the justice, "to some
recently published advertisements II
foreclosure proceedings where the ref
cree has failed TO comply with the re
quirements Of Section 239l, subdivision
4. Of the code of civil procedure. This
directs that notice of sale mus
specify a description of the mortgageC
property, conforming substantially tC
that contained in the mortgage.
Diagrams Not Compliance
"Such referees have in lieu thereo,
inserted diagrams of the property, witt
brief references to matters of record II
the Registers Office, Such advertise
ment is not, in my opinion, a prope
compliance with the requirement o
the statute.
"Nor does it answer the purpose 70
which the law prescribes that notices
Of sale shall be given. namely, to pro
tect the rights Of all parties in interest
including the owner of the equity, b!
furnishing prospective purchasers will
full detailed knowledge Of the propert!
TO be sold, restrictions in title and th'
amount of liens Of record against 1t, 81
as 10 invite the fullest possible com
petitive bidding at the sale.
"To require prospective purchasers
of the property in advance of a pro
posed sale TO examine records TO OBJ
tain information which the published
advertisement should give them is tC
defeat the very object of the statute
practically to prevent competitive bid
ding and insure in nearly every IN
stance the buying in Of the property by
the mortgagee for the amount due un
dor the mortgage or less"