If you are a residential homeowner who is or may be facing foreclosure in Nebraska, this article will help you locate the law governing the foreclosure process in your state and provides a summary of the key information you will need to know. This article will help you answer the following questions:
- What is the most common foreclosure process in Nebraska?
- What rights do you have to cure or reinstate your mortgage?
- Can your lender sue you for the deficiency after foreclosure?
Locating Nebraska’s Foreclosure Laws
To find out what is covered in Nebraska’s foreclosure laws, you need to turn to Nebraska’s statutes. The citation to Nebraska’s foreclosure law is Nebraska Revised Statutes Sections 76–1001 to 76–1018, which is referred to as the Nebraska Trust Deeds Act. The act covers nonjudicial foreclosures.
Nebraska’s foreclosure statutes can be found by taking the following steps:
- Start at the website of the Nebraska Legislature at http://nebraskalegislature.gov.
- On the menu on the left of the screen, click “Bills and Laws.”
- Click “Law Search,” which is the second item under the heading “Search Bills and Laws.”
- Click “Nebraska Revised Statutes,” which is the first link under “Browse the Laws.”
- Scroll down and click “Chapter 76: Real Property.”
- Scroll down to find Section 76–1001, which is the first section in the Nebraska Trust Deeds Act.
Clicking on a section takes you to the language of the statute.
Judicial foreclosures are covered in Nebraska Revised Statutes Sections 25-2137 to 25-2155. To find the sections of the Nebraska statute covering judicial foreclosures, follow Steps 1 to 4 above, click “Chapter 25: Courts; Civil Procedure,” then scroll down to Section 25-2137.
Summary of Nebraska’s Foreclosure Laws
A summary of the most important information in Nebraska’s foreclosure laws relevant to residential homeowners is presented below. Because nonjudicial foreclosures are the most common type of foreclosure in Nebraska, this information focuses on nonjudicial foreclosures. “Mortgage lender” refers to the bank or financial institution holding the mortgage, and “borrower” refers to the residential homeowner.
Nonjudicial Foreclosure
A mortgage lender does not need to sue the borrower in court to foreclose. Once a borrower has defaulted on his or her mortgage, the lender has the right to sell the property securing the mortgage, subject to certain requirements. Neb. Rev. Stat. § 76–1005.
Notice Requirements
To initiate the foreclosure process, the mortgage lender must first file a notice of default with the office of the register of deeds in the county where the property is located. Neb. Rev. Stat. § 76–1006. Within one month of filing the notice of default, the lender must publish a notice of sale once a week, for at least five consecutive weeks, in a newspaper of general circulation in the county where the property is located. The last publication must be between ten and 30 days prior to the date of the foreclosure sale. Additionally, the notice of sale must specify the time and place of the sale as well as describe the property to be sold. Neb. Rev. Stat. § 76–1007.
The borrower’s right to receive a copy of the notice of default and notice of sale depends on whether the borrower requested such notices to be mailed to him or her prior to the lender filing the notice of default. Neb. Rev. Stat. § 76–1008(3). If the borrower did make such a request, the lender must mail the notice of default to the borrower no later than ten days after filing it, and the lender must also mail the notice of sale at least twenty days prior to the date of the foreclosure sale. Neb. Rev. Stat. § 76–1008(2).
Right to Cure
A homeowner has up to one month after the lender files the notice of default to prevent the foreclosure sale by making any missed payments on the mortgage or by curing any other deficiency, as well as paying for the mortgage lender’s foreclosure fees or expenses. The foreclosure fees or expenses are limited to the greater of fifty dollars or one-half of one percent of the unpaid principal due on the loan, not including the portion that would not be due had the default not occurred. Neb. Rev. Stat. § 77–1012.
Right of Redemption
Homeowners do not have a right of redemption. Neb. Rev. Stat. § 76–1010(2).
Deficiency Judgment
The lender has the right to sue the borrower for the deficiency within three months after the date of the foreclosure sale. The amount of the deficiency is limited to the lesser of these two amounts:
- the difference between the amount of the outstanding mortgage debt and the property’s fair market value at the time of the foreclosure sale, or
- the difference between the amount of the outstanding mortgage debt and the foreclosure sale price. Neb. Rev. Stat. § 76–1013.
