Can the lender come after you for the rest? Deficiency judgments in North Dakota

Deficiency rules in North Dakota, point by point

• No deficiency on your homestead

  Any foreclosure of an owner-occupied home

  The lender may not get a deficiency judgment when it forecloses residential property with 4 or fewer units, on up to 40 contiguous acres, with a home you live in as your homestead.

  N.D.C.C. § 32-19-03

• The complaint must say if a deficiency is sought

  When the foreclosure lawsuit is filed

  The foreclosure complaint must contain enough facts to show whether a deficiency judgment will be sought and against which people. Read that part of the complaint closely and answer if it wrongly seeks a deficiency against your home.

  N.D.C.C. § 32-19-04

• Other property: the appraised value cap

  In the foreclosure case

  For property that is not a protected homestead, such as a rental or second home, the deficiency can be no more than the amount due minus the value set by a licensed appraiser the court appoints at the lender's request. The cost of that appraisal is added to the case costs.

  N.D.C.C. § 32-19-03

• Second mortgages can sue on the note instead

  Debts made on or after August 1, 1993

  A lender holding a mortgage other than a first mortgage on a home of 4 or fewer units can sue you on the promissory note if it gives up its right to foreclose. That is a separate path from a deficiency after foreclosure.

  N.D.C.C. § 32-19-07

• Short sale or deed in lieu: the written deal controls

  Before you sign

  The homestead rule applies to foreclosures. We found no North Dakota statute on deficiencies after a short sale or a deed in lieu, so get any waiver of the remaining balance in writing.

• How a judgment is collected

  Judgments docketed since August 1, 2021 are canceled after 20 years

  If a deficiency judgment is entered on non-homestead property, wage garnishment is limited to the lesser of 25 percent of disposable earnings or the amount above 40 times the federal minimum wage each week, reduced by $20 for each dependent living with you.

  N.D.C.C. §§ 28-20-35, 32-09.1-03

• If you get a deficiency demand

  Act within the answer deadline on the summons

  If the property was your homestead, tell the court and the lender in writing that § 32-19-03 bars a deficiency. Legal Services of North Dakota can help you answer the complaint.

  N.D.C.C. § 32-19-03

The short answer in North Dakota

Common questions in North Dakota