How to avoid foreclosure in North Dakota

How foreclosure works in North Dakota, step by step

1. Missed payments

   Federal rules generally stop your servicer from starting a foreclosure until you are more than 120 days behind. Use this time to call your servicer about a repayment plan or loan modification and to talk with a free HUD-approved housing counselor.

   12 C.F.R. § 1024.41(f)

2. Notice before foreclosure

   The lender must serve the record owner a written notice at least 30 days and no more than 90 days before it starts the lawsuit. The notice must list the amount needed to bring your payments current, with taxes, insurance and upkeep the lender paid itemized. If you pay what is needed to fix the default within 30 days, the mortgage is reinstated as if you had never fallen behind.

   N.D.C.C. §§ 32-19-20, 32-19-21, 32-19-28

3. Summons and complaint

   The case starts when you are served with a summons and complaint. You have 21 days after service to serve a written answer, even though the papers may not have a case number yet. The complaint must say which redemption period applies and whether the lender wants a deficiency judgment.

   N.D.R.Civ.P. 12(a); N.D.C.C. § 32-19-04

4. Judgment and order of sale

   If the lender wins, the court enters a judgment for the amount due and costs and orders the home sold. The judgment must say that you keep possession of the home during the redemption period.

   N.D.C.C. § 32-19-06

5. Sheriff's sale

   The sheriff of your county sells the home at a public auction between 9 a.m. and 4 p.m. Notice of the sale must be published in the county's official newspaper once a week for 3 weeks in a row, with the last notice at least 10 days before the sale. The buyer gets a certificate of sale, and the court must confirm the sale.

   N.D.C.C. §§ 28-23-04, 28-23-07, 28-23-11, 28-23-13, 32-19-08

6. 60 day redemption period

   For most homes you can buy the home back within 60 days after the sale by paying the winning bid plus interest at your mortgage rate. You keep living in the home during this time. The court can cut out the redemption period if it finds the home was abandoned.

   N.D.C.C. §§ 32-19-18, 32-19-19, 28-24-11

7. Sheriff's deed and moving out

   If you do not redeem, the sheriff gives the buyer a deed right after the redemption period ends. If you stay, the buyer can take you to court for eviction after giving you 3 days' written notice of intention to evict.

   N.D.C.C. §§ 28-24-13, 47-32-01, 47-32-02

North Dakota foreclosure deadlines to know

These are the periods written into the law. Your own dates are on the notices you received. If a notice and this page disagree, trust the notice and ask a counselor or lawyer.

Your rights as a homeowner in North Dakota

Other North Dakota protections

• Notice before foreclosure with a 30 day right to cure

  The lender must serve a written notice 30 to 90 days before suing, stating the amount needed to bring you current. Paying within 30 days reinstates the mortgage. Proof that the notice was served must be filed with the complaint.

  N.D.C.C. §§ 32-19-20, 32-19-21, 32-19-27, 32-19-28

• No deficiency judgment on an owner-occupied home

  For residential property of four or fewer units on up to 40 acres with a home the owner occupies as a homestead, the lender cannot get a judgment for any shortfall after the sale.

  N.D.C.C. § 32-19-03

• You keep the home during redemption

  From the sale until the redemption period ends, you are entitled to possession, use and rents of the home, unless the court finds it abandoned.

  N.D.C.C. §§ 28-24-11, 32-19-06

• Out-of-court foreclosure only for state-held mortgages

  Only a mortgage held by the state or a state agency with a power of sale can be foreclosed by advertisement instead of a lawsuit. Even then, a judge can stop it and send it to court if you show by sworn affidavit that you have a valid defense or counterclaim.

  N.D.C.C. §§ 35-22-01, 35-22-04

North Dakota mortgage assistance programs

If the home is sold for more than you owe

If the sale brings in more than the judgment and costs, the extra money must be paid into court, and the court decides who gets it. You have to apply to the court for it. If the surplus is under $1,000 and no one applies within 60 days after it is deposited, the court must give it to the county. If it is $1,000 or more and no one applies within 90 days, the court may have it deposited at interest for you. Ask the clerk of district court in your case how to apply, and be wary of anyone who offers to claim it for a share.

N.D.C.C. §§ 32-19-10, 32-19-11

Ways to avoid foreclosure

Most of your options come from federal rules and from whoever owns or insures your loan, so they work the same way in North Dakota as anywhere else. What changes by state is how much time you have to use them.

• Repayment plan
• Forbearance
• Payment deferral or partial claim
• Loan modification
• Reinstatement
• Short sale
• Deed in lieu of foreclosure
• Chapter 13 bankruptcy