 North Dakota Loan Modification Guidelines
When you develop a definite plan of action with well-timed, well-informed
steps, you can stop the foreclosure process and save your home. We have
outlined the foreclosure process for the state of North Dakota.
The Process
In North Dakota, a lawsuit may be brought in District Court for foreclosure
or for satisfaction of a mortgage on real estate. Prior to bringing any
lawsuit, the lender must give the borrower no less than 30 days advance
notice of the lenders intent to foreclose. This notice must be sent no
later than 90 days before the suit is filed.
The notice must contain:
1. a description of the real estate
2. the date and amount of the mortgage
3. the amount due for principal, interest and taxes paid by the lender,
stated separately
4. a statement that if the amount due is not paid within 30 days from
the date of mailing or service, then a lawsuit will be filed to foreclose
The notice must also state the time period for redemption, which is either
one year, or, for small tracts with substantial balances and the properly
worded mortgages, six months.
The notice must be served by registered or certified mail addressed to
the owner of record at the post office address shown on the mortgage or
recorded by the register of deeds. The notice may be served personally
in the same manner as a lawsuit. A U.S. Post Office registry return receipt
showing the envelope was delivered to the title owner is evidence the owner
received it. If the borrower brings in the missing payments any time within
30 days after receipt of the notice, the loan must be reinstated.
North Dakota law requires the lawsuit paperwork to include several allegations
that are unusual. First, North Dakota law requires the attorney bringing
the suit to hold a power of attorney to act on behalf of the lender. The
lawsuit itself should allege this is so. Second, 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 bring in
enough money to pay off the outstanding loan balance. The lender may not
ask for a deficiency in the foreclosure suit if it has already brought
another suit just to collect on the loan. If the borrower can bring in
the missed payments plus foreclosure costs before the decree of sale is
issued by the court, then the lender's lawsuit to foreclose must be dismissed.
All sales must be made by the sheriff or deputy of the county where the
judgment is rendered. The sale must take place in the county where the
land is located. The sale will normally be at the courthouse or another
place designated by the trust deed. Whenever the real estate is sold at
foreclosure, the sheriff or deputy must give the buyer a certificate of
sale, and at the expiration of the redemption time period, a deed must
be given to the buyer. The lender cannot obtain possession during the redemption
period. However, the lender can obtain a court injunction barring the borrower
from committing waste against the property during the redemption period
if the borrower continues to occupy the premises. Any cash surplus from
the sale, beyond that needed to pay off the mortgage and the foreclosure
costs, must be paid to the borrower.
Redemption
The normal redemption period is one year. One year from the sale, if the
borrower can come up with the balance due on the loan, plus costs, the
property can be redeemed. Property sold at foreclosure can be redeemed
not only by the borrower, but by a creditor who holds a lien against the
property. A creditor who wants to redeem is called a redemptionor. Interestingly,
one redemptionor can redeem from another redemptionor who took title by
redemption. Each redemptionor must wait 60 days after the last redemption.
The amount paid to redeem must be the amount of the original purchase price
with interest as stated in the original loan documents or the one on which
foreclosure took place. In either case, the amount should elude the foreclosure
costs, plus taxes and insurance.
Short-Term Redemption
The short-term redemption time period is six months. In order to claim
short-term redemption, the mortgage must contain the following wording:
"The parties agree that the provisions of the short-term mortgage
redemption act shall govern this mortgage."
The mortgage should also contain (in capital letters) the words,
"MORTGAGE-SHORT-TERM MORTGAGE REDEMPTION"
The area covered must be ten acres or less. Short-term redemption is available
if the amount claimed upon the mortgage before foreclosure is more than
66 2/3 percent of the original indebtedness secured by the mortgage.
Moratorium
The North Dakota courts have the power to postpone an entry of judgment
in foreclosure proceedings if the balance owed on the loan is less than
the market value of the property. These provisions are applicable to persons
who would be deprived of a home.
Trustee for Commercial Property
Commercial property in North Dakota may be placed in the charge of a trustee
pending the expiration of the period of redemption. The trustee can take
possession of the premises; pay utilities, taxes and insurance; receive
rentals from tenants and evict them if they don't pay.
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