North Dakota foreclosure laws: how the process works and how long it takes

• N.D.C.C. § 35-22-01 et seq.: Allows foreclosure by advertisement, without a court case, only for mortgages with a power of sale held by the state or its agencies; every other mortgage must be foreclosed by court action. Sets the notice of intention to foreclose with a 30-day cure period, six weeks of published notice of sale, the sheriff's sale, and redemption.
• N.D.C.C. § 32-19-20 to § 32-19-28: Requires a written notice to the owner of record at least 30 and not more than 90 days before a foreclosure begins. The notice must state the amount needed to bring the loan current and warn that foreclosure will begin if it is not paid within 30 days. If the owner cures the default within 30 days after the notice is served, the mortgage is reinstated.
• N.D.C.C. § 32-19-18: The owner may redeem within 60 days after a foreclosure sale by paying the amount bid plus interest at the mortgage rate. Agricultural land may be redeemed within 365 days after the case is filed or the notice of sale is first published, but no earlier than 60 days after the sale. Abandoned property is an exception.
• N.D.C.C. § 32-19-01 et seq.: Framework for judicial foreclosure of mortgages through district court. Standard civil action: complaint, service, answer, judgment, court-ordered sale, and a redemption period that is usually 60 days.
• N.D.C.C. § 28-24-02: Sets a one-year redemption period after execution sales, but redemption from a foreclosure sale follows the 60-day rule in N.D.C.C. § 32-19-18.
• N.D.C.C. §§ 32-19-03, 32-19-06.1, 32-19-06.2: Bars a deficiency judgment in a foreclosure of residential property with four or fewer units on up to 40 contiguous acres occupied by the owner as a homestead. Other deficiencies are limited by value: fair market value for agricultural land over 40 acres (with a separate action due within 90 days after the sheriff's sale) and for commercial property, and a court-appointed appraiser's value in other cases.
• N.D.C.C. § 47-18-01 et seq.: Establishes a $150,000 homestead exemption for North Dakota residents. Protects equity in the homeowner's primary residence from judgment creditors. Does NOT protect against mortgage foreclosure.

The foreclosure judgment lets the owner keep possession during the redemption period, which is usually 60 days after the sheriff's sale (longer for agricultural land); after it expires, the court may order possession delivered to the purchaser (N.D.C.C. §§ 32-19-06, 32-19-18). The federal Protecting Tenants at Foreclosure Act provides 90-day notice to bona fide tenants. Former owner-occupants must vacate after the redemption period expires.

Any surplus from the foreclosure sale, above the debt and costs the court found due, must be paid into court, and the court decides who receives it. If the surplus is less than $1,000 and no application to receive it is filed with the court within 60 days after it is deposited, the court must order it forfeited to the county's general fund (N.D.C.C. § 32-19-10).

Generally first in time, first in right under North Dakota recording statutes. Property tax liens have priority over all other liens including first mortgages. County property tax foreclosure is available.

An action or proceeding to foreclose a mortgage on real estate must be started within 10 years after the claim for relief has accrued (N.D.C.C. § 28-01-15(3)). Actions on other contracts generally have a six-year limit (N.D.C.C. § 28-01-16). Consult a local attorney. No deficiency judgment is allowed after foreclosure of an owner-occupied homestead of four or fewer units on up to 40 contiguous acres (N.D.C.C. § 32-19-03). For agricultural land of more than 40 acres, a separate deficiency action must be brought within 90 days after the sheriff's sale, and the judgment can be enforced by execution only within three years after it is entered (N.D.C.C. § 32-19-06.2). For commercial property, the lender must ask for a deficiency in the foreclosure case itself (N.D.C.C. § 32-19-06.1). Consult a local attorney for specific deadlines.

• Unpaid property taxes: Property tax liens have priority over mortgage liens in North Dakota. If taxes stay unpaid for two or more years, the county auditor gives notice of foreclosure of the tax lien by June 1, and the lien is foreclosed on October 1 after the notice unless the taxes, special assessments, interest, penalties and costs are paid by then (N.D.C.C. §§ 57-28-01, 57-28-02, 57-28-05). The county auditor then issues a tax deed to the county, which sells the property at its annual sale (N.D.C.C. §§ 57-28-09, 57-28-13). The former owner, the owner's executor or administrator, or the owner's parent, spouse or child can buy the property back while the county still holds title (N.D.C.C. § 57-28-19). Excess sale proceeds are held for 90 days; the record owner can claim them in that time, and unclaimed excess goes to the state's unclaimed property administrator (N.D.C.C. § 57-28-20). Contact the county auditor for specific procedures.

$150,000. Protects up to $150,000 of equity in your primary residence from judgment creditors. Does not stop mortgage foreclosure. North Dakota's homestead exemption is $150,000. The exemption is relevant if a deficiency judgment is pursued — it protects equity from general creditors. The exemption does not protect against mortgage foreclosure itself.

North Dakota's military civil relief act gives anyone called or ordered to active service for 30 consecutive days or longer all the protections of the federal Servicemembers Civil Relief Act (SCRA) (N.D.C.C. § 37-01-43). In North Dakota law, “active service” means state active duty, such as National Guard members called out in aid of civil authorities, and not federal service ordered by the President (N.D.C.C. § 37-01-01). Under the federal SCRA, if you took out a mortgage before entering active duty, you generally can't be foreclosed on without a valid court order while on active duty and for 12 months after leaving it, and you can ask to have that mortgage's interest rate reduced to 6% while on active duty and for a year after. North Dakota has Minot Air Force Base and Grand Forks Air Force Base — significant military communities. Military families should contact their installation legal assistance office immediately if facing foreclosure.

North Dakota has a state individual income tax, and federal tax liability on canceled debt may also apply. North Dakota bars a deficiency judgment after foreclosure of an owner-occupied homestead of four or fewer units on up to 40 contiguous acres (N.D.C.C. § 32-19-03), and the $150,000 homestead exemption provides meaningful asset protection.