A deficiency judgment in a foreclosure sale occurs when a homeowner’s property securing a mortgage loan is sold via auction at an amount less than the amount owed on the outstanding mortgage obligation. In light of the rapidly increasing number of foreclosures hitting American homeowners, many states have implemented anti-deficiency laws, which attempt to protect already struggling homeowners from additional debt obligations following foreclosure. The state of North Dakota contains some provisions protecting homeowners from deficiency judgments.
North Dakota Anti-Deficiency Judgment Laws
In the state of North Dakota, a homeowner involved in a judicial foreclosure sale is not subject to a deficiency lien judgment, per state statute, if the following conditions are met:
- The property is a residential property less than forty (40) acres with four or less units
In the event a property is non-residential, used for commercial or agricultural purposes, or is larger than forty acres, the homeowner is only subject to a deficiency judgment based on the fair market value of the property at the time when foreclosure actions commenced. Furthermore, any other forced sale of property via foreclosure sale subject to a deficiency lien will be based on the appraisal value of the property.
Instances Where Deficiency Judgments Are Applicable in North Dakota
If a lender did not resort to using suit to bring a homeowner to turn over their property in a foreclosure proceeding, or the foreclosure is not the result of a judicial proceeding, the homeowner may still be subject to a deficiency judgment lien. This can be the case in certain instances of short sales and deed in lieu of foreclosure deals in the state of North Dakota.
Get Legal Help
In reality, the only affirmative method a homeowner can employ to protect themselves from future debt obligations following or during a foreclosure action is through the advice and counsel of a foreclosure lawyer practicing in the state of North Dakota. Every case of homeowner struggling to meet or make payments on their given home loan will present highly unique circumstances, which may result in alternative methods being available for homeowners to avoid foreclosure, or at the very least, mitigate the losses realized during the process. In short, the only method a homeowner can ascertain accurate and definitive information about their individual and personal possible foreclosure issues is through consulting with a foreclosure lawyer in the state of North Dakota.
