WHAT IS THE ORDER OF REFERENCE?

In the context of foreclosure, the order of reference is when the court appoints a referee. The technical term is that the court is referring the case to the referee in order for the referee to do something with limited authority granted by the court. In foreclosure there are typically two references, the first one being when a referee is appointed to compute the amount due, and the second one being when a referee is appointed to conduct the foreclosure sale/auction. In the last few years, referees have also been appointed to supervise the mandatory foreclosure settlement conferences. A referee’s power is limited to whatever the court order appointing the referee provides. Referees do not determine the outcome  of the case or make rulings on motions. They usually just hear and supervise matters and report back to the court if necessary or appropriate. When a referee is appointed to compute the amount due, that usually occurs in connection with the lender’s motion for summary judgment or, if the homeowner has not answered the summons and complaint, then it would occur when the lender files its ex parte motion for default judgment.  Later on in the case, the lender must file a motion for a final judgment of foreclosure and sale in order to obtain a final judgment and the legal authority to schedule a sale date and advertise it according to the legal requirements. The lender will typically file a motion to confirm the referee’s report of amount due at the same time that the lender makes its motion for a final judgment of foreclosure and sale. This makes sense because the final judgment must include the amount due which comes from the referee’s report.

Usually referees do not do much work because their fee is very low and is set by the statute. Instead, the bank attorney usually prepares the referee’s report and then sends it to the referee to review and approve. It is possible but unusual for a referee computation to be conducted at an actual hearing before a court reporter. Typically the referee’s hearing on the amount due is done all on papers. The property owner does have the right to object to it. Later, when there is an actual auction, the referee will be in charge of it and responsible for how it is conducted. Subsequent to the auction, the referee is responsible for the closing that should occur within 30 days. At the closing, the high bidder will pay the referee whatever balance was due and the referee will give the bidder a referee’s deed.