Tom defaults on his mortgage in Fargo, North Dakota. His lender, Heartland Savings, wants to foreclose. Which of the following correctly describes the foreclosure process Heartland Savings must follow under North Dakota law?
Correct Answer
B) Heartland Savings must file a lawsuit in district court and obtain a court judgment before the property can be sold at a foreclosure sale
North Dakota is an exclusively judicial foreclosure state. Under NDCC Chapter 32-19, a lender must initiate a lawsuit in district court, prove the default, and obtain a court judgment before the mortgaged property can be sold at a foreclosure sale. There is no power-of-sale or non-judicial foreclosure option available in North Dakota, regardless of what language appears in the mortgage document. This is one of the most frequently tested North Dakota-specific financing concepts.
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