North Dakota Foreclosure Laws

Answers

How are mortgage liens treated in North Dakota?

North Dakota is generally known as a lien theory state where the property acts as security for the underlying loan. The document that places the lien on the property is called a mortgage.

How are North Dakota mortgages foreclosed?

In North Dakota, the lenders generally go to court in what is known as a judicial foreclosure proceeding where the court must issue a final judgment of foreclosure. The property is then sold as part of a publicly noticed sale. A complaint is filed in District Court along with what is known a lis pendens. A lis pendens is a recorded document that provides public notice that the property is being foreclosed upon.

What are the legal instruments that establish a North Dakota mortgage?

The documents are known as the mortgage, note, and in a commercial transaction, a security agreement. Sometimes the mortgage document is combined with the security agreement.  A mortgage is filed to evidence the underlying debt and terms of repayment, which is set forth in the note.

How long does it take to foreclose a property in North Dakota?

Depending on the court schedule, it usually takes approximately 90 days to effectuate an uncontested foreclosure. This process may be delayed if the borrower contests the action, seeks delays and adjournments of hearings, or files for bankruptcy.

Other notice requirements in North Dakota include:

1. Before a legal action to commence a foreclosure can be filed, a notice of foreclosure must be served at least thirty (30) days before but not more than ninety (90) days before the action is commenced. The notice requires that certain information be referenced including the description of the real estate being foreclosed; the date and amount of the mortgage, the past due amount of interest, principal, real estate taxes, and that foreclosure will occur if these arrearages are not paid within thirty (30) days. The notice referenced can be served by registered or certified mail. Any pending default can be cured by making payment in full before the sale and upon such payment the foreclosure complaint will be dismissed.

Is there a right of redemption in North Dakota?

North Dakota has a statutory right of redemption, which allows a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs. There is a time limit to undertake such redemption which is typically 60 days after the sale for all property except agricultural which has a post sale redemption period of one (1) year.

Are deficiency judgments permitted in North Dakota?

No. A deficiency judgment may not be obtained when a property in foreclosure is residential property with four (4) or fewer units of up to forty contiguous acres if the property is homestead property. Commercial property or agricultural property more than forty acres is subject to a deficiency judgment provided that in the case of agricultural property the amount of the deficiency shall be the difference between the fair market value of the property at the time of the commencement of the action less the debt owed, and on all other property the deficiency will be based on the appraised value of the property less the debt owed.

What statutes govern North Dakota foreclosures?

The laws that govern North Dakota judicial foreclosures are found in 2005 North Dakota Century Code Chapter 32-19-01 et. seq. (Foreclosure of Real Estate Mortgages by Action)