Nebraska Foreclosure Laws: Process, Timeline and Your Rights

Both. A trust deed that expressly includes a power of sale can be foreclosed out of court by the trustee under the Nebraska Trust Deeds Act, or, at the lender's (beneficiary's) option, in court like a mortgage. Mortgages are foreclosed by filing a complaint in the district court of the county where the property is located.

For a trustee's sale, the trustee or the trustee's attorney must first record a notice of default in each county where the property is located, describing the breach and the election to sell. Within 10 days after recording, a copy must be mailed by registered or certified mail to the parties to the trust deed and to anyone who recorded a request for notice; if the borrower's address is unknown, the notice of default must be published once a week for 3 weeks. The notice of sale must be published in a newspaper of general circulation in the county once a week for 5 consecutive weeks, with the last publication at least 10 but not more than 30 days before the sale, and must be mailed by registered or certified mail to the same people at least 20 days before the sale. For farm property outside a city or village, the notice of default must also state that the default may be cured within two months and give the amounts owed.

For a trustee's sale, the notice of sale may be given only after at least one month has passed since the notice of default was recorded (two months for farm property covered by § 76-1006(1)(b)). The notice of sale must then be published for 5 consecutive weeks, with the last publication 10 to 30 days before the sale. A sale postponed more than 45 days beyond the noticed date must be re-noticed like the original. In a court (judicial) foreclosure, the homeowner can ask, within 20 days after the decree, that the sale be stayed; the stay is generally nine months, but three or six months for certain residential mortgages depending on the original loan term.

Yes, for trust deeds. Within one month after the notice of default is recorded (two months for farm property covered by § 76-1006(1)(b)), the borrower, a successor, or a junior lienholder may pay the entire amount then due (not counting principal that would not be due without the default), plus costs actually incurred and trustee's fees capped at the greater of $50 or one-half of 1% of the unpaid principal. The foreclosure is then dismissed and the loan reinstated as if it had never been accelerated.

There is no redemption after a trustee's sale: the trustee's deed conveys the property without any right of redemption, and the owner's rights end when the trustee accepts the highest bid. In a court (judicial) foreclosure, the owner can redeem at any time before the court confirms the sale by paying into court the amount of the decree with interest and costs (plus 12% interest on the purchase price to a buyer who was not the plaintiff).

Allowed after a trustee's sale, with limits. The lender must file the deficiency lawsuit within three months after the sale. The court must find the property's fair market value on the date of sale and cannot award more than the debt (with interest, costs and trustee's fees) minus that fair market value, and never more than the debt minus the sale price.

Yes, for condominiums. A condo association has a lien on a unit for assessments once they are due and a notice of the lien amount is recorded, and it may foreclose the lien like a mortgage after giving reasonable notice to affected lienholders. The lien is ahead of other liens except those recorded before the declaration, a first mortgage or deed of trust recorded before the association's lien notice, and real estate taxes. The homestead exemption does not apply to it. The lien ends unless enforcement starts within three years after the assessments are fully due.

Yes. A seller of residential property with one to four units must give the buyer a signed written disclosure statement of the property's condition (appliances, electrical, heating and cooling, water and sewer systems, defects, environmental hazards, title conditions, utilities, private transfer fees, and carbon monoxide alarm compliance). It must be delivered on or before the date the buyer becomes bound to purchase, and the buyer must acknowledge receipt in writing. Exemptions include foreclosure and trustee's sales, court-ordered sales, transfers between co-owners or to relatives, and never-occupied new construction.

The owner, occupant, or anyone with a lien or interest may redeem property sold for taxes until the buyer files an application for a tax deed with the county treasurer (the redemption must be received before close of business that day). To redeem, pay the county treasurer the certificate amount with interest at the statutory rate, later taxes the buyer paid with interest, and the issuance and administrative fees. A buyer generally may apply for a tax deed within nine months after three years from the sale (two years for vacant and abandoned property), or must foreclose the tax certificate in court in some cases.

The Nebraska Department of Banking and Finance's Mortgage & Foreclosure Help Resources page says homeowners who are behind on payments or facing foreclosure can dial 2-1-1 or (402) 444-6666 to reach a referral specialist who can locate a free housing counseling service. It lists free nonprofit counselors (Family Housing Advisory Services of Omaha, High Plains Community Development Corp. in Chadron, and Credit Advisors Foundation in Omaha) and explains the Nebraska Foreclosure Protection Act, which protects homeowners from foreclosure-rescue fraud.