Foreclosure in Nebraska

How a Nebraska foreclosure works, step by step

These steps follow a deed of trust sold by its trustee. If your loan is a mortgage, the court route below applies instead.

1. Generally, the legal foreclosure process can't start until you're at least 120 days behind.
2. For a deed of trust, the trustee or the trustee's attorney first records a notice of default with the register of deeds in the county where the home is. It says you've broken a promise in the loan, what the breach is, and that the trustee has chosen to sell the home to pay the debt.
3. Every deed of trust must ask that copies of the notices be mailed to each party to it, so you're sent them as if you had asked. A copy of the notice of default goes out by registered or certified mail no later than 10 days after it's recorded.
4. The trustee must wait at least one month after the notice of default before giving notice of the sale.
5. The notice of sale is published in a local newspaper at least five times, once a week for five weeks in a row, with the last one 10 to 30 days before the sale. A copy is mailed by registered or certified mail at least 20 days before the sale.
6. On the date, time and place in the notice, the trustee sells the home at a public auction to the highest bidder.
7. The trustee's deed passes the home to the buyer without any right of redemption. Your rights in the home end the moment the trustee accepts the highest bid.

If your loan is a mortgage: the court route

A mortgage foreclosure is filed in the district court for the county where the home is. A lender with a deed of trust can also choose to foreclose this way instead of using the trustee.

• The summons tells you that to defend the case, you must file a written response with the court within 30 days after you're served.
• If the lender wins, the court can order the home sold, or as much of it as it takes to pay what's owed plus court costs.
• You can delay the sale by filing a written request with the court clerk within 20 days after the court's decree. The stay lasts nine months. But it's three months if the loan's original term ran more than 20 years past the date the case was filed and the home is on a lot in a platted subdivision or on residential land of three acres or less. If you don't ask within 20 days, the order of sale can issue right away.
• Under the rules for sheriff's sales of land, the notice is published once a week for four weeks in a row and posted on the courthouse door.
• After the sale, you must get notice by certified mail at least 10 days before any hearing to confirm it. The court confirms the sale if it was done by the rules and the home sold for fair value, or if a new sale wouldn't bring more. It then orders the officer to give the buyer a deed.

If you're served, mark the date right away. The window to answer and the window to ask for the stay are both short, and a lawyer can tell you which applies to you.

Catching up or paying off before you lose the home

Within one month after a notice of default is recorded, you can pay the lender the full amount then due, plus the costs it actually spent enforcing the loan, but not the part of the principal that wouldn't be due yet without the default. That cures the default. The loan is then back in force as if it had never been called due.

The law also lets you pay the entire amount then due at any time after the default and before the trustee's sale.

With a mortgage, you can redeem any time before the court confirms the sale, by paying the court the amount of the decree plus interest and costs.

Ask your servicer for the exact figure in writing as early as you can, and ask what date it's good through.

Who runs the sale, and where

A trustee's sale is held between 9 a.m. and 5 p.m. at the home, at the county courthouse, or at a public building with county offices in that county. Anyone, including the lender, may bid.

The trustee can postpone the sale by announcing it at the set time and place. A new published notice is needed only if the sale moves more than 45 days past the original date.

In a court foreclosure, a sheriff or another person the court authorizes holds the sale in the county where the home is.

How long it takes

Foreclosure generally can't legally start until you're at least 120 days behind. Once it starts, how long you have until the sale depends on your state.

For FHA loans, HUD's time frame runs from the first legal action until the lender has clear title to the home and possession of it. In Nebraska, that's 8 months either way: for a mortgage, the first legal action is filing a court petition, and for a deed of trust, it's publishing the notice of sale.

With a deed of trust, the notice of sale can't start until at least one month after the notice of default, and it runs five weeks. In a court case, you have 30 days to respond after you're served, and if you ask within 20 days of the decree, the sale is put off for three or nine months.

These are official markers, not a forecast. Your case can move faster or slower, so don't count on extra time.

Deficiency, surplus and redemption

After a trustee's sale, the lender has three months to sue for the rest of the debt, called the deficiency. The court can't award more than the debt, interest and sale costs minus the home's fair market value on the sale date.

While a mortgage foreclosure case is going on, and after the decree, the lender can't bring a separate lawsuit to collect the debt unless the court allows it.

If a trustee's sale brings in more than is owed, the balance goes to the people legally entitled to it. In a court sale, any surplus is paid into court for you, or for others entitled to it, as the court orders.

A trustee's sale has no right of redemption afterward. With a mortgage, your right to redeem lasts until the court confirms the sale. If the sale price is less than the decree, the court can refuse to confirm if it thinks the home is worth at least the decree amount.

Protections when you sell, lease or get offers

The Nebraska Foreclosure Protection Act covers the home you live in as your main residence once any foreclosure has started, including a recorded notice of default or a lawsuit.

• A foreclosure consultant can't take any pay until every promised service is fully done.
• An equity purchaser is someone who, as a business, buys title to a home in foreclosure. You can cancel the deal until midnight of the third business day after you sign, or until noon on the last business day before the sale, whichever comes first. Until that time runs out, the buyer can't take a deed from you or get you to sign one.
• If you sell and keep an option to buy the home back, the contract must give you a right to cure any default within 30 days that you can't waive. A buyback price more than 25 percent above what the buyer paid is presumed unconscionable.

The equity purchaser rules touch how I buy whenever I take title to your home while it's in foreclosure: a cash offer, taking over payments or seller financing. If a deal ever let you rent the home back with a right to buy it back, the buyback rules would apply too. And don't stop talking to your lender while you weigh any offer, including mine.

Free help in Nebraska

• Nebraska Department of Banking and Finance: mortgage and foreclosure help. The Department explains that the Nebraska Foreclosure Protection Act protects homeowners from people who prey on vulnerable consumers.
• Nebraska Attorney General: Protect the Good Life. The Attorney General's consumer site, where you can report a scam or file a complaint.
• Nebraska Judicial Branch: legal resources and information. How to find a lawyer or free legal help.
• Nebraska Judicial Branch: self-help center. Court information for people who represent themselves.
• CFPB: find a housing counselor. Search HUD-approved counseling agencies in Nebraska.