Foreclosure process in North Dakota

Judicial or non-judicial?

Judicial. The Century Code says a plaintiff “shall bring an action in district court” to foreclose a mortgage on real property (§ 32-19-01). Foreclosure by advertisement, the non-judicial route, is allowed only for mortgages held by the state or its agencies; every other mortgage “must be foreclosed by action” (§ 35-22-01). So a typical home loan from a bank or mortgage company goes through the court.

Timeline step by step

The notice must describe the property, give the date and amount of the mortgage, itemize the amount needed to bring principal and interest current plus advances for taxes, insurance and maintenance, and state that suit will start if the amount is not paid within 30 days (§ 32-19-21). The lender may serve it by mail (§ 32-19-22). Service is not required if the property is abandoned, or after three failed mail attempts that came back refused or unclaimed (§ 32-19-23).

The statutes do not set a total number of days from the first missed payment to the sale; the court schedule varies from case to case.

You stay in the home meanwhile. The judgment must provide that the owner keeps possession, rents, use and benefit of the property during the redemption period, unless the court finds the property abandoned (§§ 32-19-06, 32-19-19).

Right of redemption

After the sale, the owner has 60 days to redeem, except for abandoned property and agricultural land (§ 32-19-18). To redeem, the owner pays the amount bid at the sheriff’s sale plus interest on that amount at the rate of the mortgage debt. Lienholders junior to the mortgage may redeem in order of priority if the owner does not.

Two exceptions matter. If the court finds the property abandoned, it can shorten or eliminate the redemption period (§ 32-19-19). Agricultural land follows a different clock, up to 365 days from filing of the suit but never ending earlier than 60 days after the sale.

If you disagree with the amount needed to redeem, deposit the amount you calculate with the sheriff along with a written explanation. That deposit counts as redemption as of the date of deposit, subject to paying any extra amount the court later finds due (§ 32-19-18.1).

Deficiency judgments

A deficiency is the gap between what you owe and what the sale brings in. In North Dakota, a plaintiff may not obtain a deficiency judgment on residential property of four or fewer units, on up to 40 contiguous acres, containing an owner-occupied homestead (§ 32-19-03). Other property can face a deficiency, but only for the difference between the amount due and the appraised value set by a licensed appraiser, not the sale price (§ 32-19-03). The complaint must state whether a deficiency will be sought (§ 32-19-04).

If the sale brings more than the debt and costs, the surplus goes to the court. If it is under $1,000 and no one applies within 60 days after deposit, the court sends it to the county’s general fund (§ 32-19-10). Claim any surplus promptly.

Help for homeowners in default

• Call your servicer first. Under 12 CFR § 1024.41, if a servicer gets a complete loss-mitigation application more than 37 days before a foreclosure sale, it must evaluate you for all options and send a written decision within 30 days.
• Housing counselors. The CFPB lists HUD-approved housing counselors who often charge little or nothing; its finder line is (855) 411-2372.
• Cure the default. The 30-day cure window in § 32-19-28 is the cheapest way out.
• Sell the home. Selling before the sheriff’s sale can pay off the loan; see capital gains on a home sale for the tax side.
• Get legal advice. A court case with deadlines is a good time for a North Dakota attorney.

Buying a foreclosed home? The seller-disclosure statute does not apply to foreclosure sales or to a lender’s later resale after foreclosure (see seller disclosure).