## Facts

- Ellie G. Ricker and Elizabeth Ricker owned a Maine farm subject to an operating-loan mortgage held by the Farmers Home Administration (FmHA).
- After several years of delinquency, FmHA sent each mortgagor a 30-day acceleration notice stating the account was in default and foreclosure would proceed absent cure.
- FmHA chose a nonjudicial foreclosure under Maine’s power-of-sale procedure.
- FmHA recorded a foreclosure notice in the registry of deeds and published notice of the impending foreclosure sale in a local newspaper.
- FmHA did not mail or personally serve notice of the foreclosure sale on the Rickers, despite knowing their identities and address and having previously corresponded with them about the loans.
- The Rickers did not see the published notices and learned of the foreclosure only after the sale.
- Ivan and Vivian Upton purchased the farm at the sale and received a quitclaim deed from FmHA.
- The Rickers sued the United States, federal officials, and the purchasers to set aside the foreclosure and sale; the matter was presented on cross-motions for summary judgment.

## Issues

1. Whether a federal agency’s nonjudicial foreclosure, conducted under state power-of-sale procedures with only recordation and newspaper publication and no direct notice to known mortgagors, violates Fifth Amendment due process.
2. Whether Maine’s nonjudicial foreclosure statute is unconstitutional under the Fourteenth Amendment due process clause.
3. Whether alleged failures by FmHA to make “sound loans” or supervise farming operations could invalidate the borrowers’ underlying indebtedness or defeat foreclosure.

## Decision

- The court held that FmHA’s foreclosure and sale violated the Rickers’ Fifth Amendment right to due process and were void and without effect.
- The court granted injunctive relief preventing defendants from removing the Rickers or taking further action based on the purported foreclosure.
- The court declined to invalidate Maine’s statute on its face, resolving the case on federal due process grounds tied to the federal agency’s conduct.
- The court rejected the borrowers’ attempt to void the debt based on alleged statutory and regulatory loan-making and supervision duties.

## Legal Principles

- When the federal government forecloses a mortgage, it must satisfy Fifth Amendment procedural due process even if it uses state nonjudicial foreclosure mechanisms.
- Due process requires notice reasonably calculated to inform interested parties and allow an opportunity to object; publication-only notice is inadequate when the foreclosing party knows the owners’ identity and address and can readily provide direct notice.
- Compliance with minimal state publication/recordation requirements does not, by itself, satisfy federal due process obligations for a federal agency foreclosing on identifiable individuals.
- Statutory or regulatory directives concerning agency loan quality or borrower supervision do not, without more, provide a basis for borrowers to nullify the debt obligation in this setting.
- A foreclosure conducted without constitutionally sufficient notice may be declared void, rendering the resulting deed ineffective to pass valid title.

## Conclusion

The court set aside a federal agency’s nonjudicial foreclosure and sale because the agency relied only on recordation and newspaper publication and failed to give direct notice of the sale to mortgagors it could readily reach, violating Fifth Amendment due process; the underlying debt was not invalidated on loan-supervision theories.


Ricker v. United States, 417 F. Supp. 133 (D. Me. 1976)