Opinion ID: 1719022
Heading Depth: 4
Heading Rank: 1

Heading: Whether the Foreclosure Sale Was Commercially Reasonable.

Text: ¶ 16. BancorpSouth decided to foreclose on the Ronson deed, which was junior to the McInnis deed. Accordingly, the trustee announced at the foreclosure sale that the sale would be subject to the liens of the McInnis deeds of trust, which BancorpSouth held. The trial court found this announcement discouraged any potential bidders other than BancorpSouth; and therefore, the sale was not a determinant of the fair market value. ¶ 17. This Court has stated with regard to a creditor conducting a foreclosure sale of a debtor's property: if the secured creditor is authorized to foreclose by power of sale, after the debtor's default and upon compliance with the deed of trust or other instrument, the secured creditor may sell any or all of the real estate that is subject to the security interest in its then condition or after any reasonable rehabilitation or preparation for sale. Every aspect of the sale, including the method, advertising, time, place and terms, must be commercially reasonable. This is an objective standard. Wansley v. First Nat'l Bank, 566 So.2d 1218, 1223 (Miss.1990). Thus, the first question is whether, in consideration of the trustee's statement, the sale was commercially reasonable. ¶ 18. [A]bsent special circumstances, a foreclosure sale by the trustee in a junior deed of trust is made subject to prior liens on the property, and the trustee can sell and convey no better title than he acquired. Title vests in the purchaser subject to the prior lien. Reese v. Ivey, 324 So.2d 756, 757 (Miss.1976) (citing Staunton Military Academy v. Dockery, 244 N.C. 427, 94 S.E.2d 354 (1956)). Announcing the amount due on a senior deed of trust enables bidders to take the prior lien into consideration in making bids, since the successful bidder buys subject to the prior lien. Reese v. Ivey, 324 So.2d at 757. ¶ 19. The Agreement signed by BancorpSouth, the McInnises, Nelson, and Hartman provides that the parties agreed the Ronson deeds of trust would be junior to the McInnis deeds of trust. BancorpSouth asserts that the trustee's statement that the properties were subject to BancorpSouth's lien did not prohibit the foreclosure sale from being commercially reasonable. This Court agrees. In this case, the mere announcement that the properties were subject to a lien is insufficient to refute the commercial reasonableness of the sale. Thus, the trial court erred in finding that announcement prevented the sale price from serving as fair market value.