Auction by virtue of mortgage
As soon as a debtor is in default towards the mortgagee (bank), for instance by failing to pay (in time), the mortgagee is authorized to sell the mortgaged collateral in public. Mortgage deeds often state that a debtor is in default by the mere lapse of an installment, so a debtor is already in default if a payment has not been received by the mortgagee on the date agreed on for this purpose. In practice, the debtor is first given a notice of default by the mortgagee. Then the mortgagee has to be paid total amount due before the date mentioned in the letter, and in case of failure to pay, the default is created. As soon as the mortgagee has met all auction formalities, an advertisement will appear in the newspaper in which the auction is announced. This advertisement has to be published at least thirty days before the day on which the auction takes place. This advertisement will indicate that it is possible to make a private bid on the object to be auctioned. The notary has to receive this bid fourteen days before the auction takes place at the latest. The notary notifies the mortgagee of the bids received. If the mortgagee accepts a bid, a purchase agreement will be prepared in connection herewith, and it will be presented to the Court of First Instance in Aruba for approval. The auction will not take place in that case. Experience has shown that the Court of First Instance in Aruba approves this purchase agreement if the purchase price (= the bid on which the purchase agreement has been concluded) is in conformity with the value under foreclosure of the object to be auctioned. The Court of First Instance in Aruba evaluates this based on an appraisal report and the tax value. If the Court of First Instance in Aruba does not approve the purchase agreement, it will set a date on which the auction will take place as yet.