North Dakota Foreclosure Law
- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: No
- Primary Security Instrument: Mortgage
- Timeline: Usually 90 days
- Right of Redemption1: Yes
- Deficiency Judgments2 Allowed: Yes
Lenders in the state of North Dakota may foreclose on a mortgage in default using a judicial foreclosure process.
Judicial Foreclosure
A judicial process of foreclosure requires that the lender file a lawsuit and attain a court order to foreclose on a particular property. This type of process is generally used when no power of sale is present in the mortgage or deed of trust. A power of sale is a clause found in a deed of trust or mortgage that authorizes the sale or transfer of land as outlined by the terms of that clause.
Judicial Foreclosure Procedure
The lender must give the borrower no less than thirty (30) days advance notice of their intent to foreclose. Notice is sent to the borrower no later than ninety (90) days before the suit is filed. Under North Dakota law, the lawsuit paperwork must require that the attorney bringing the suit hold a power of attorney to act on behalf of the lender. 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 yield enough money to pay off the outstanding loan balance.
The foreclosure sale can be stopped by the borrower paying the defaulted amount, plus foreclosure costs, prior to the time the sale is confirmed by the court.
The foreclosure sale is conducted by the sheriff or their deputy in the county where the property is located. The property is sold to the highest bidder. After the sale and the borrower’s redemption period have ended, the buyer will receive a certificate of sale.
Generally, borrowers have a period of one (1) year to redeem, but this period of time can be reduced to six (6) months if the mortgage includes short-term redemption rights. Lenders retain the right to file a deficiency judgment.
1 A borrower’s right to reacquire property lost due to a foreclosure.
2 A personal judgment against the borrower for the remaining balance on the loan after a foreclosure sale.
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