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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: a description of the real estate the date and amount of the mortgage the amount due for principal, interest and taxes
paid by the lender, stated separately 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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