Foreclosure Laws

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |

Nebraska Foreclosure Procedure

Foreclosures in Nebraska take place judicially, through the filing of petitions for foreclosure in the Nebraska District Court for the county where the property is located. If a prior lawsuit has been won by the lender for the amount due on a loan, it does not stop a lender from filing a subsequent lawsuit seeking a foreclosure sale of mortgaged premises. However, before the court will hear a petition for foreclosure, the lender must prove it has been unable to collect what was judged to be owed in the prior lawsuit. If a suit has been brought for satisfaction of a mortgage rather than a true petition for foreclosure, the lender can only seek the amount due and possession of the property rather than true foreclosure. Whenever a petition for foreclosure is filed either alone or in conjunction with a petition for satisfaction of a mortgage, then the court can decree a sale of the mortgaged premises or such part as is needed to pay off the loan and the costs of suit.

While the lawsuit is pending, the borrower has the right to bring in the past due payments, including principal and interest, and costs, and the lawsuit proceedings will be suspended (stayed). Nevertheless, the court will enter a decree of foreclosure and sale. This will not be enforced unless there is a further order of the court, which will not be given unless the borrower defaults in the future payment of any installment or a portion of one.

The court may order the entire property to be sold, or some part of it, based on a report by the sheriff as to what appears to be the most feasible. The order of sale may be stayed up to nine months after the judgment if the borrower files a written request for a delay (stay) with the clerk of the court within 20 days after the judgment is rendered. Otherwise, the order commanding the sale of the mortgaged property will be given 20 days after the judgment.

The sheriff or officer holding the sale must give public notice of the time and place of the sale by posting the notice on the courthouse door and at five other public locations in the county where the property is located. Two of the five locations must be in the precinct where the property is located. In addition, the sheriff must advertise the property for sale once a week for four weeks in a newspaper either printed in the county or generally circulated in the county. After making the sale, the sheriff or officer will report it back to the court, which will then confirm the sale. Once the sale is confirmed, the borrower has no right to redeem the property.

A deed shall be executed by the sheriff and it will vest in the purchaser the same title the borrower had. The sales proceeds will be applied to discharge the lender's debt, and if there is a surplus, it goes to other persons who are entitled to it, or it must stay with the court for three months before it can be paid to the borrower.

Deficiency

A deficiency is only possible as a continuation of a foreclosure suit, but not while the foreclosure action is pending or remains incomplete.

top of page

Nevada Foreclosure Procedure

Judicial Foreclosure Available: Yes

Non-judicial Foreclosure Available: Yes

The lender may use a deed of trust with a power of sale clause as the mortgage. This permits the lender to foreclose by following a statutory procedure for sale without the necessity of filing a lawsuit in court.

Preliminary Notices

Non-judicial Foreclosure

The borrower has three months from the date a notice of default and election to sell is recorded to perform and cure the default under the deed of trust. If the borrower fails to do so, then the property will be sold at foreclosure. Recording A notice of default and election to sell must be recorded by the deed of trust's trustee.

Mailing

A copy of the notice of default and election to sell must be mailed certified, return receipt requested, to the borrower and any owner of the property on the date the notice is recorded. The notice must be mailed to the last ad dress the lender has, but if the current address of the borrower is not known, the trustee may send it to the property in foreclosure. The trustee must send the notice of default and election to sell to the borrower within l( days of recording the same to anyone who recorded a re quest for such a notice.

Advertising and Posting

The property must be advertised and posted in the same manner as for an execution sale.

Cure

The borrower has 35 days from the first day following the day on which the notice of default and election to sell was recorded to cure the default. The borrower ma) cure the default by performing under the loan agreement Usually this would mean paying the missed payments or other sums due to the lender, but not the accelerated loan balance.

Sale
Procedures

Time

The time of sale must be specified in the foreclosure notice. It should be for a time no less than that which would be specified for an execution sale.

Place

The foreclosure sale may be made at the trustee's office, even if the office is not in the same county as the property.

Manner

The property should be sold in the manner required by law for the sale of real property on execution.

Special Procedures

The court may issue an injunction to restrain waste (destruction) of the property during foreclosure.

Deficiency

If the foreclosure fails to generate sufficient proceeds to pay off what remained due on the loan, then the lender may sue for a deficiency within three months after the foreclosure sale. A hearing will be held to determine the market value of the property. Notice of such hearing must be served at least 15 days before the hearing. An appraiser may be appointed by the court, on its own motion or on request, to have the foreclosed property appraised to find the market value. At the hearing, the greater of the market value or the foreclosure sale price must be credited against what remained unpaid on the loan. The court may award a deficiency judgment for the difference. The deficiency judgment must be sought within six months after the date of foreclosure. Even if multiple properties are being foreclosed on by the lender, the deficiency must be sought within two years of the initial foreclosure on the first of the multiple properties.

Redemption

A deed of trust sale gives the foreclosure purchaser clear title free of any right of redemption for the old borrower. There is a one year redemption on judicial sales.

top of page

New Hampshire Foreclosure Procedure

New Hampshire has two broad classes of mortgage foreclosures:

  1. foreclosures made on mortgages without power of sale clauses
  2. foreclosures made on mortgages with power of sales clauses.

Foreclosures made without power of sale clauses are conducted similar to strict foreclosures, in which the lender must work to obtain possession of the premises. Foreclosure made with power of sale clauses revolve around giving the proper notices and conducting proper foreclosure sales.

Although mortgages with power of sale clauses are much more common than those without, it is still possible to have a mortgage without a power of sale clause in New Hampshire . In this event, the foreclosure works much like strict foreclosure in other New England states. In order to foreclose, a lender must recover possession lawfully, and hold it for a required length of time (one year in New Hampshire ), before title becomes final in the name of the lender. There are three ways to recover possession.

  1. In entry under process, the leader files a lawsuit and obtains a court order authorizing entry.
  2. In entry and subsequent publication, the lender peaceably enters the premises and continues occupation for a year. An affidavit from the party and witnesses as to the time, manner and purpose of the entry should be recorded. A notice stating the time at which the possession by the lender for the purpose of foreclosure was commenced should be published three weeks successively, with the first publication to be at least six months before the right to redeem would be foreclosed. The notice should give the date of the mortgage and a description of the property. A copy of the notice, and a sworn affidavit as to when; where and how it was published should also be recorded.
  3. In possession and publication, the lender already is in possession and simply publishes a notice stating that from a certain day forward, the lender retains possession because the mortgage conditions were broken by the borrower, and that the purpose of the lender’s continued possession is foreclosure. The date of the mortgage and a description of the premises should also be stated. The day stated in the notice should be not later than four weeks after the initial advertisement. The notice should be published in a newspaper of general circulation in the county where the real estate is located. A copy of the notice and an affidavit stating when, where and how it was published should be recorded.

It is possible to foreclosure a mortgage with a power of sale clause in New Hampshire by filling a lawsuit in court and obtaining a court decree commanding the sale of the property, with a confirmation of the completed sale by the court. On the other hand, it is much more common to publish and serve notice of a foreclosure sale in the proper manner, and then sell the property at the sale to the highest bidder.

A foreclosure sale without court action must be preceded by the appropriate notices. The borrower must be sent a notice at least 25 days before the sale. The notice should contain the following warning: "You are hereby notified that you have the right to petition the Superior Court for the county in which the mortgaged premises are situated, with service upon the mortgagee ( lender), and upon such bond as the court may require, to enjoin the scheduled foreclosure sale." Unless the borrower sues prior to the foreclosure sale, the borrower may not challenge the foreclosure in court at a later date. The lender should also publish a notice of the foreclosure sale once a week for three weeks in a newspaper of general circulation in the county or town where the property is located. The first publication must not be less than 20 days before the foreclosure sale.

The actual foreclosure sale must be held on site at the house or on the real property that is being foreclosed, unless the mortgage specifies a different location. A report of the sale must be made in ten days. The person who sells the property at the foreclosure sale must record the deed, a copy of the notice of sale and an affidavit describing the sales procedure to be recorded within 30 days of the sale. Title passes with the recording of the deed.

top of page

New Jersey Foreclosure Procedure

Foreclosures in New Jersey take place by filing a lawsuit. New Jersey doesn’t use privately conducted mortgage foreclosure sales. A lender begins by filing a complaint of foreclosure in the Superior Court. Constructive notice can be given by recording a lis pendens with the clerk or register of the county where the land is located. A lender may file a foreclosure suit simply to collect the unpaid payments rather than the entire unpaid principal balance. If so, the lender can get a judgment for the missed payments and yet hold the mortgage and the note intact for the rest of the loan balance. The property may be sold through a foreclosure sale with the mortgage lien and note still in place so that the buyer at the foreclosure sale holds title subject to the existing mortgage lien and note. In this type of sale, however, the lender may not collect a deficiency judgment against the borrower.

Preliminary Notices

In New Jersey once the lender wins a judgment to foreclose on the real estate, whether in part, as just described, or in whole, by a writ of execution, the sheriff or another officer will conduct the sale. The foreclosure notice must be posted in the county office of the county where the property is located, and on the property in foreclosure. The notice must be advertised in two newspapers in the county, one of which must be either the county seat or the largest municipality in the county. The person seeking the foreclosure must notify the property owner and any other parties to the foreclosure lawsuit at least ten days before the sale. The newspaper ad must disclose any title defects, unless the court has ordered the foreclosure sale completed free of any liens. The buyer can back out of the purchase the ad did not disclose the title defects, or if the sale was not ordered to be free of liens. The buyer must by satisfying the court that a defect in title exists.

Sale Procedures

The sheriff may then proceed to sell the property in the manner directed by the court. The sheriff must deliver the deed unless an objection to the sale is made within ten days after the sale, or the objection is made before the deed was delivered, if delivery is past ten days from the sale. Unless there are valid objections, the court will confirm the sale. Thereafter the sheriff must file a report of the sale with the court within a reasonable time.

Deficiency Judgments

Deficiency judgments are permitted in New Jersey . A lawsuit for a deficiency must be commenced within three months from the date of the foreclosure sale, or confirmation of the sale if confirmation was required. Although the deficiency suit is a separate lawsuit, it can only be brought against a person who was joined to the foreclosure lawsuit and who is personally responsible for the mortgage debt. Such a person must be served with the process. On a note that is dated on or after May 1,1980 , the debtor may dispute the deficiency by introducing evidence of the fair market value of the mortgaged premises at the time of the foreclosure sale. The deficiency is limited to the difference between the fair market value of the premises and the balance due on the loan. However, a borrower should object to the foreclosure sale price prior to the confirmation of the sale. The failure to do so may set the borrower up for a larger deficiency. However, some New Jersey courts are refusing to confirm the foreclosure sale unless the lender agrees, as part of the confirmation, not to sue the borrower for a deficiency greater than the difference between the fair market value and the balance owed on the loan.

Redemption

Redemption is possible during the ten days a borrower has to object after a foreclosure sale. If the borrower objected to the sale, then redemption is possible anytime until the court rules on the objections, which may be longer than ten days.

If the lender sues the borrower for deficiency, the effect is to reopen the foreclosure sale, which would otherwise have been final and proof against a right of redemption. A deficiency gives a borrower the right to bring an action to redeem the property within six months after the lender’s deficiency judgment is rendered. However, persons who answered the deficiency suit, disputing its amount, and lost may not redeem.

top of page

New Mexico Foreclosure Procedure

Judicial Foreclosure Available:Yes

Non-judicial Foreclosure Available:Yes

A lender must file a lawsuit and undertake judicial foreclosure unless the loan is covered by the Deed of Trust Act, which allows non-judicial foreclosure. However, the Deed of Trust Act applies only to business and commercial loans on real estate in excess of $500,000 and then only if the borrower agreed, in writing, to the deed of trust arrangement. Otherwise, in a typical foreclosure on a house, whether under a mortgage, trust deed or deed of trust, the lender must arrange to file a lawsuit, win a judgment ordering foreclosure and arrange a foreclosure sale in the manner required by law.

Judicial Sale

Once the lender wins a judgment, then it can go ahead and arrange to sell the property to pay off what the borrower owes, in accordance with the court judgment. A notice of sale must first be given, then a sale can take place in 30 days.

Contents

The notice of sale should specify the date, time and place of sale. It should also give a legal description of the property.

Advertising

The notice of sale must be published once a week for four consecutive weeks. The last ad must be published at least three days before the foreclosure sale.

Cure

The borrower may prevent the foreclosure by paying the amount of the judgment.

Time

The sale may not take place until 30 days after the date the court grants a judgment in favor of the lender.

Manner

The property will be sold to the highest bidder. However, if the sale fails due to lack of bidding, then the property may be offered again for sale any time before the return date on the writ of execution issued by the court to enforced its judgment.

Redemption

After the sale, the real estate may be redeemed by the former borrower or owner by paying, at any time within nine months from the date of sale, the amount of the successful foreclosure bid, with interest at 10 percent a year, plus taxed and costs. The parties may agree to a shorter term, but not less than one month. For good cause, however, the court can increase the period to not more than nine months.

Once the borrower files the suit for redemption and serves it on the lender, the lender has 30 days to respond. Sometime after the response, or by default, the court will hold a hearing to determine the amount of money necessary for redemption. At the conclusion of the hearing, the clerk of the court will issue a certificate of redemption.

Deficiency

A lender may obtain a deficiency judgment. The matter is unregulated by statute.

top of page

New York Foreclosure Procedure

Judicial Foreclosure Available:Yes

Non-Judicial Foreclosure Available:Yes

Preferred Method: Judicial Foreclosure

Judicial foreclosure (foreclosure by lawsuit) is the primary method of foreclosure in New York . Although non-judicial foreclosure is available, it is seldom used. Non-judicial foreclosure procedures are sufficiently intricate to lead to potential title disputes. Such problems might make it very difficult to evict a tenant. Junior lien holders might also dispute the title and tie the matter up in litigation. Thus most lenders will elect a judicial foreclosure.

Judicial Foreclosure

Judicial foreclosure begins when the lender files a lawsuit. The lender will sue the borrower and any person who has a claim to the ownership or a possession interest. The lender, as plaintiff, has a summons and a complaint served on the borrower. The summons commands the borrower to come to court and answer the lender’s complaint; the complaint is the lawsuit proper, which describes the lender’s legal and factual basis for foreclosure. A notice of lis pendens must be filed. The lis pendens is a notice that a lawsuit is pending, the outcome of which affects title. Often, the borrower fails to answer. In that event, the court will appoint a referee to compute a figure for the foreclosure. The court may then sign a judgment of foreclosure and sale. If the borrower appears and defends against the lawsuit, then the court will determine the merits of the defense. The referee will need an oral hearing. If the lender wins, then a judgment of foreclosure and sale will be awarded.

Typically the foreclosure sale is advertised for 4 to 6 weeks. The sale is made by public auction to the highest bidder. The lender may bid, as well. The lender must distribute the proceeds according to the terms of the judgment signed by the judge. Surplus money will normally be held by a referee.

Deficiency

If the mortgage contains an express covenant to pay, then the lender may seek a deficiency judgment against the borrower if the court ordered sale does not produce sufficient funds. The lender can ask the court for a deficiency judgment for the amount left unpaid after the foreclosure sale. The motion for the deficiency judgment must be made within 90 days after the foreclosure sale. The court must determine the market value and credit the greater of the market value or the foreclosure sales price against what remains unpaid on the loan.

Redemption

After the judicial foreclosure, there is no redemption period. This is true of non-judicial foreclosure, as well.

top of page

North Carolina Foreclosure Procedure

North Carolina offers two methods of foreclosure:

  1. by filing a lawsuit seeking foreclosure
  2. by conducting an out-of-court foreclosure sale under the terms of a power of sale clause in a deed of trust.

In the event the lender elects to foreclose by filing a lawsuit, it will try to get a default judgment. Once the lender gets a judgment, the court clerks for the Superior Court have the power of the judge to appoint commissioners to make the foreclosure sale, receive the reports on the sale and confirm the reported sale. They may order the execution and delivery of a deed to the property. The clerk may also issue a writs of assistance to evict any occupants, provided ten days' advance notice is given to such occupants.

Deed of Trust Foreclosure

In North Carolina , a deed of trust foreclosure has several unusual features. First, there must be a preliminary hearing as to whether to foreclose or not. Interested parties must receive notice of the hearing. The clerk of the court, not the judge, holds the hearing. Afterward, a notice of the foreclosure sale must be given; then the sale is conducted. A deposit must be made at the sale. After the sale, however, a very unusual procedure called an upset bid exists. An upset bid consists of making a higher bid than the foreclosure bid within a set time, which will cause the property to go through a resale, which may happen again and again! After the final sale, the sale is reported to the court clerk.

Preliminary Hearing

Under North Carolina law, a lender or trustee who has the power of sale under a deed of trust may foreclosure it by following a statutorily prescribed procedure. At the outset, a hearing must be held before the court clerk (not the judge) to determine whether the foreclosure should take place or not. Notice of the hearing must be served in the manner in which a lawsuit is served, or by certified mail, return receipt requested, or, if no other process to give notice works after diligent effort, then the notice of the hearing can be posted in a conspicuous place on the property that will be foreclosed on.

Notice of the Foreclosure Hearing

Notice of the hearing must be sent to the borrower, anyone who owes money or could owe money on the loan and every person who has a recorded claim or lien on the real estate that would be affected by the foreclosure.

The notice must describe the real estate, give the name and address of the current lender, describe the nature of the default, state whether the loan has been accelerated and mention any right the borrower has to pay cure the default.

The notice must state that the borrower has the right to appear before the clerk of the court at the date and time specified and show cause as to why the foreclosure should not be held. The notice must state that the borrower does not have to appear, and that failure to attend does not preclude the buyer from trying to cure the default or buy at the foreclosure sale.

The notice should warn the borrower that the foreclosure buyer will be entitled to possession as soon as the foreclosure buyer accepts delivery of the deed to the property. The borrower is further advised to keep the lender informed as to the borrower's latest address to aid delivery of copies of any subsequent foreclosure notices.

The right to receive a notice of hearing may be waived, but only if the debt is over $100,000 and the waiver is in writing and signed in the presence of the witness. When such written waivers are delivered to the court clerk, the clerk may skip the hearing on whether the foreclosure should take place or not.

The Hearing

The clerk will hold the hearing. During the hearing, the clerk will consider evidence as to whether the debt exists, whether a default has occurred and whether the lender has the right to foreclose. If the clerk answers those questions in the lender's favor, he or she will authorize the foreclosure. Either side may appeal the clerk's ruling to the judge within ten days. (This is likely to be fruitless.)

Notice of Sale - Contents

The notice of sale shall describe the loan instruments. It must identify the original borrowers as they are shown in the deed records within ten days prior to the posting of the foreclosure notice. If someone other than the borrower owns or claims ownership of the property in an instrument that has been recorded, then such a person must be mentioned in the notice of the foreclosure sale.

The notice must give the date, hour and place of the sale, provided such date, hour and place are consistent with the state law regulating such sales. (More details will follow on the sale itself.) The notice must describe the property and state the terms of the sale and that the property will be sold subject to taxes, special assessments and any other terms required by the deed of trust, which must be specifically described.

Notice of Sale - Posting and Publishing

The notice of the sale of the real estate must be posted at the courthouse door for 20 days prior to the sale. In addition it must be published once a week for two successive weeks. The two ads must be published at least eight days apart. The last ad cannot be published less than ten days before the sale. The notice of the sale must be mailed first class mail at least 20 days before the sale to the borrower and any other owner or record title or lien claimant at the address last known to the trustee or the lender. The notice must further be sent to anyone who has taken the time and trouble to record a request for copy of notice in the statutory form as follows:

In accordance with the provisions of G. S.. 45-21.17(5) request is hereby made that a copy of any notice of sale under the deed of trust (mortgage) recorded on ____________________19____, in Book____, page ______ records of ________________ County, North Carolina, executed by

__________________________ as trustor (mortgagor) in which _________________________

is named as beneficiary (mortgagee), and ____________________________ as trustee to be mailed to ______________________ at the following address __________________________.

Signature: __________________________

If the sale is made to someone other than the lender, or if the lender resells to a good-faith buyer and such a buyer holds the land six months, then a person who did not receive a notice of sale loses the right to challenge the foreclosure. To challenge the sale, the party must post a bond equal to what the lender is owed on the loan against the property. The bond is irrevocable, pending the final decision of the court.

Time of Sale

A sale shall begin at the time designated in the notice of sale, but never on a Sunday and always between the hours of 10 a.m. and4 p.m. The sale may be continued or postponed. However, a postponement may only be for good cause, such as bad weather, an excessive number of competing sales, illness or another good reason. The postponement must be announced at the time and place the regular sale would have taken place. A notice of the postponement must be posted on the courthouse door, and be given orally to each party who is normally entitled to notice of a foreclosure sale. The notice has to state the hour and date to which the sale is postponed and the reason for the postponement and it must be signed.

Place of Sale

The property must be sold at the courthouse door in the county where the land is located, unless the deed of trust provides for a different location. If the deed of trust gives the trustee the authority to designate a place of sale, then the place of sale will be the place the trustee designates on the notice of sale. The deed of trust may require a cash deposit at the sale and set the amount. If the required cash deposit is not specified in the deed of trust, then the trustee holding the sale may require the highest bidder at the sale to pay a cash deposit not to exceed 10 percent of the bid up to $1,000, and 5 percent of the amount by which the bid exceeds $1,000. If the high bidder fails to make the deposit at the sale, then the trustee may immediately re-offer the property for sale to any bidders.

Report

A preliminary report of the sale must be made to the court within five days after the sale. The report must give the name of the borrower; the lender; the date, time and place of the sale; recording information about the deed; the name of the foreclosure buyer; the price at which the property was sold and the name of the person making the report.

Proceeds of the Sale

The foreclosure sale proceeds should be used to pay off the costs of the sale, the taxes on the property and any special assessments. Next, the money goes to pay the balance due on the loan, and then to creditors in order of their seniority. Anything left over goes to the borrower, or his or her estate. A special proceeding is available to contest the distribution of the sales proceeds.

Upset Bids

One of the most intriguing features of North Carolina law is the upset bid on real estate sold at foreclosure. Even after the sale, a potential buyer can come in and make an upset bid. An upset bid is an increased bid whereby a bidder offers to buy the real estate previously sold at foreclosure for an amount exceeding the reported foreclosure sale price by 10 percent of the first $1,000 and 5 percent of the amount over $1,000 of the old foreclosure bid. Such a sum of cash, or a cashier's check, must be deposited with the clerk of the Superior Court, within ten days after the clerk receives a report on the old foreclosure sale. The clerk may also require a bond in the amount of the upset bid price, minus the cash deposit. The clerk may then order a resale of the property.

Resale Under Upset Bids

When the clerk offers the property for resale due to the deposit of an upset bid, then the notice of the resale must be posted at the courthouse door for 15 days prior to the sale. A newspaper ad must be published once a week for two successive weeks before the sale. Eight days must separate the two ads. The last ad must be run no less than seven days before sale. A notice of the resale must be mailed to each party. The sale will take place in the same manner as the original sale. Once again, a high bidder will emerge, who may well be the person who put down the upset bid deposit. The entire resale may be done again and again as often as upset bids are submitted!

Final Report

A final report on the sale and the disposition of the proceeds must be given to the clerk by the person who held the foreclosure sale, within 30 days after receipt of the proceeds of the sale. The final report should show what part or parts of the property were sold. The clerk must audit the report and record it. A copy of the notice of sale or resale, and an affidavit of publication should also be recorded. At this point, the sale is final. Special procedures exist to validate foreclosure sales well after they took place when the proper procedures were not complied with, or the trustee was also the lender.

Injunctions

It is possible to enjoin a foreclosure sale in North Carolina .

Deficiency

A lender may not sue for a deficiency if the loan that went into default was for the purchase price of the real estate. However, in other cases a lender may sue for deficiency, but the borrower has the right in a deficiency suit to prove the reasonable value of the property as a defense or offset to the lender's claims. The borrower is not restricted to forcing the lender to credit only the foreclosure bid against the property; the borrower can instead assert and prove the market value of the property as an offset to a deficiency suit by the lender.

top of page

North Dakota Foreclosure Procedure

In North Dakota , a lawsuit may be brought in District Court for foreclosure or for satisfaction of a mortgage on real estate. Prior to bringing any lawsuit, the lender must give the borrower no less than 30 days advance notice of the lenders intent to foreclose. This notice must be sent no later than 90 days before the suit is filed.

The notice must contain:

  1. a description of the real estate
  2. the date and amount of the mortgage
  3. the amount due for principal, interest and taxes paid by the lender, stated separately
  4. a statement that if the amount due is not paid within 30 days from the date of mailing or service, then a lawsuit will be filed to foreclose

The notice must also state the time period for redemption, which is either one year, or, for small tracts with substantial balances and the properly worded mortgages, six months.

The notice must be served by registered or certified mail addressed to the owner of record at the post office address shown on the mortgage or recorded by the register of deeds. The notice may be served personally in the same manner as a lawsuit. A U.S. Post Office registry return receipt showing the envelope was delivered to the title owner is evidence the owner received it. If the borrower brings in the missing payments any time within 30 days after receipt of the notice, the loan must be reinstated.

North Dakota law requires the lawsuit paperwork to include several allegations that are unusual. First, North Dakota law requires the attorney bringing the suit to hold a power of attorney to act on behalf of the lender. The lawsuit itself should allege this is so. Second, the lender must also declare in the original lawsuit whether or not the lender will pursue a deficiency judgment against the borrower if the foreclosure sale does not bring in enough money to pay off the outstanding loan balance. The lender may not ask for a deficiency in the foreclosure suit if it has already brought another suit just to collect on the loan. If the borrower can bring in the missed payments plus foreclosure costs before the decree of sale is issued by the court, then the lender's lawsuit to foreclose must be dismissed.

All sales must be made by the sheriff or deputy of the county where the judgment is rendered. The sale must take place in the county where the land is located. The sale will normally be at the courthouse or another place designated by the trust deed. Whenever the real estate is sold at foreclosure, the sheriff or deputy must give the buyer a certificate of sale, and at the expiration of the redemption time period, a deed must be given to the buyer. The lender cannot obtain possession during the redemption period. However, the lender can obtain a court injunction barring the borrower from committing waste against the property during the redemption period if the borrower continues to occupy the premises. Any cash surplus from the sale, beyond that needed to pay off the mortgage and the foreclosure costs, must be paid to the borrower.

Redemption

The normal redemption period is one year. One year from the sale, if the borrower can come up with the balance due on the loan, plus costs, the property can be redeemed. Property sold at foreclosure can be redeemed not only by the borrower, but by a creditor who holds a lien against the property. A creditor who wants to redeem is called a redemptionor. Interestingly, one redemptionors can redeem from another redemptionor who took title by redemption. Each redemptionor must wait 60 days after the last redemption. The amount paid to redeem must be the amount of the original purchase price with interest at the stated in the original loan documents or the one on which foreclosure took place. In either case, the amount should elude the foreclosure costs, plus taxes and insurance.

Short-Term Redemption

The short-term redemption time period is six months. In order to claim short-term redemption, the mortgage must contain the following wording:

"The parties agree that the provisions of the short-term mortgage redemption act shall govern this mortgage."

The mortgage should also contain (in capital letters) the words,

"MORTGAGE–SHORT-TERM MORTGAGE REDEMPTION"

The area covered must be ten acres or less. Short-term redemption is available if the amount claimed upon the mortgage the date of the notice before foreclosure is more than 66 2/3 percent of the original indebtedness secured by the mortgage.

Moratorium

The North Dakota courts have the power to postpone I entry of judgment in foreclosure proceedings if the balance owed on the loan is less than the market value of the property. These provisions are applicable to persons who would be deprived of a home.

Trustee for Commercial Property

Commercial property in North Dakota may be placed in the charge of a trustee pending the expiration of the period of redemption. The trustee can take possession of the premises; pay utilities, taxes and insurance; receive rentals from tenants and evict them if they don't pay.

top of page

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |