U.S. Bank National Association v. Darlene Vertullo, 610 B.R. 399

Debtor defaulted on a mortgage; lender (U.S. Bank) conducted a power-of-sale foreclosure auction on Jan. 11, 2017; a third party was the high bidder but the foreclosure deed was never recorded.
Debtor filed chapter 13 on April 26, 2018 (after a prior dismissed chapter 13), proposed a plan to cure arrears and retain the residence, and sought to make postpetition payments to U.S. Bank.
U.S. Bank moved for relief from the automatic stay, arguing the auction extinguished the Debtor’s interest and the property was no longer estate property.
Debtor objected, relying on N.H. Rev. Stat. § 479:26 (60-day recording requirement) and In re Beeman to argue the sale was incomplete and her cure rights survived until deed recordation.
The bankruptcy court denied stay relief and confirmed the amended plan. The BAP reversed both orders, holding LaPointe’s “gavel rule” controls: a debtor’s cure right ends when the auction concludes if the sale was conducted in accordance with state law.

Issue	Plaintiff's Argument (U.S. Bank)	Defendant's Argument (Vertullo)	Held
Whether Debtor retained a § 1322(c)(1) right to cure after a power-of-sale foreclosure auction when the foreclosure deed was not recorded within 60 days under NH law	Auction terminated mortgagor’s interest when gavel fell; property not part of estate; stay should be lifted	Sale was void as to mortgagor (and cure rights survived) because deed/affidavit were not recorded within 60 days under RSA 479:26; follow Beeman	BAP applied LaPointe and the “gavel rule”: a foreclosure sale occurs at the auction (if conducted in accordance with state law), so cure rights ended when the gavel fell; reversed denial of stay relief and reversed confirmation; remanded.

In re LaPointe, 505 B.R. 589 (B.A.P. 1st Cir. 2014) (BAP adopted the “gavel rule”: § 1322(c)(1) cuts off cure rights when the auction concludes if sale complied with state law)
Connors v. Mortg. Elec. Registration Sys., 497 F.3d 314 (3d Cir. 2007) (Third Circuit endorses auction-as-sale interpretation of § 1322(c)(1))
Cain v. Wells Fargo Bank, N.A., 423 F.3d 617 (6th Cir. 2005) (Sixth Circuit holds cure rights end when gavel falls)
In re Beeman, 235 B.R. 519 (Bankr. D.N.H. 1999) (construed NH law to treat sale as incomplete until deed recordation; contrary to LaPointe)
Barrows v. Boles, 687 A.2d 979 (N.H. 1996) (NH Supreme Court discussion of when mortgagor’s interests terminate under state foreclosure law)
Grella v. Salem Five Cent Sav. Bank, 42 F.3d 26 (1st Cir. 1994) (stay-relief motions require only a colorable claim to property of the estate)