In
South Dakota, lenders may foreclose
on deeds of trusts or mortgages in
default using either a judicial or
non-judicial foreclosure process.
Judicial Foreclosure
The judicial process of foreclosure,
which involves filing a lawsuit to
obtain a court order to foreclose,
is used when no power of sale is
present in the mortgage or deed of
trust. Generally, after the court
declares a foreclosure, your home
will be auctioned off to the highest
bidder.
Non-Judicial Foreclosure
The non-judicial process of
foreclosure is used when a power of
sale clause exists in a mortgage or
deed of trust. A "power of sale"
clause is the clause in a deed of
trust or mortgage, in which the
borrower pre-authorizes the sale of
property to pay off the balance on a
loan in the event of the their
default. In deeds of trust or
mortgages where a power of sale
exists, the power given to the
lender to sell the property may be
executed by the lender or their
representative, typically referred
to as the trustee. Regulations for
this type of foreclosure process are
outlined below in the "Power of Sale
Foreclosure Guidelines".
Power of Sale Foreclosure
Guidelines
If
the deed of trust or mortgage
contains a power of sale clause and
specifies the time, place and terms
of sale, then the specified
procedure must be followed.
Otherwise, the non-judicial power of
sale foreclosure is carried out as
follows:
-
A
foreclosure notice must be
published once a week for four
successive weeks in a newspaper
of general circulation in the
county where the premises are
located.
-
At least twenty-one days prior
to the date set for sale, the
lender must serve a written copy
of the notice of foreclosure
sale on the borrower and any
lien holder whose interest in
the property being foreclosed
would be affected by the
foreclosure.
-
Said notice must contain the
names of the borrower and
lender, the mortgage date, the
amount due, a description of the
premises and the time and place
of sale.
-
The sale must be made by the
sheriff of such county, or his
deputy, between the hours of
9:00 am and 5:00 pm to the
highest bidder. Any person
including the mortgagee (lender)
may bid at the sale. The winning
bidder will receive a
certificate of sale.
-
The sale may be postponed, from
time to time, by inserting a
notice of such postponement, as
soon as possible, in the
newspaper in which the original
advertisement was published, and
continuing such publication
until the time when the
postponed sale occurs.
If
the property is 40 acres or less,
and the mortgage contains a power of
sale clause, then a 180-day period
of redemption exists. If the
property is abandoned, the time
period is reduced to 60 days.
Generally, unless special short-term
redemption mortgage provisions
apply, borrowers may redeem within
one year of the date of sale.
Foreclosure Process
South Dakota Foreclosure
Laws
