Foreclosure Process and Laws in Nebraska

Facing foreclosure can be overwhelming, but understanding the Nebraska foreclosure process is the first step toward protecting your home and your rights. Nebraska foreclosure law specifies how foreclosure procedures work, and both federal and state laws give you rights and protections throughout the process.

In Nebraska, foreclosure typically follows a nonjudicial process, which means it can move quickly. This guide breaks down the foreclosure procedures in Nebraska, explains your legal rights as a homeowner, and provides potential options for avoiding foreclosure.

What Are My Foreclosure Rights in Nebraska?

Both federal and state laws govern foreclosure procedures in Nebraska, and your mortgage documents also give you rights during the process.

Your Mortgage Rights in Nebraska

If you get a loan to buy a home in Nebraska, you'll likely sign two documents: a promissory note and a deed of trust (which is like a mortgage).

• Promissory note.The promissory note is the document that contains your promise to repay the loan along with the repayment terms.
• Deed of trust.The deed of trust is the document that gives the lender a security interest in the property and will probably include a power of sale clause. If you fail to make the payments, the power of sale provision gives the lender the right to sell the home nonjudicially so it can recoup the money it loaned you.

You also get rights under the deed of trust and promissory note. For example, if you're late making your monthly payment, most promissory notes provide a grace period of ten to fifteen days before you'll incur late charges. To find out the grace period in your situation and the amount of the late fee, review the promissory note or your monthly billing statement.

If you default on payments, most deeds of trust require the lender to send you a breach letter (a preforeclosure notice) before officially starting a foreclosure. This notice tells you that the loan is in default. If you don't cure the default, the lender can accelerate the loan (call it due) and go ahead with the foreclosure.

Your Rights Under Federal Foreclosure Laws

In most cases, federal mortgage servicing laws require the loan servicer to contact you (or attempt to contact you) by phone to discuss foreclosure alternatives, called "loss mitigation" options, no later than 36 days after a missed payment and again within 36 days after each following missed payment. (12 C.F.R. § 1024.39 (2025).)

No more than 45 days after a missed payment, the servicer must let you know in writing about loss mitigation options that could be available and assign personnel to help you. There are a couple of exceptions to these requirements, like if you file for bankruptcy or tell the servicer not to contact you under the Fair Debt Collection Practices Act. (12 C.F.R. § 1024.39) (2025).)

Federal law also generally requires the servicer to wait until the loan is over 120 days delinquent before officially starting a foreclosure. But in a few situations, like if you violate a due-on-sale clause or if the servicer is joining the foreclosure action of a superior or subordinate lienholder, the foreclosure can begin sooner. (12 C.F.R. § 1024.41 (2025).)

Protections If You're in the Military

If you're in the military, the federal Servicemembers Civil Relief Act provides certain legal protections against foreclosure.

Other Foreclosure Rights for Nebraska Homeowners

In a Nebraska foreclosure, you'll also get the right to:

• receive notice of the foreclosure
• bring the loan current to stop the foreclosure sale
• pay off the loan to prevent a sale, and
• get any surplus funds after a foreclosure sale.

What Are the Different Types of Foreclosure in Nebraska?

If you fail to make your mortgage payments in Nebraska, the lender can foreclose on your property through either a judicial or nonjudicial method.

Judicial Foreclosures

A judicial foreclosure begins when the lender files a lawsuit seeking court approval to sell the property. If you fail to respond to the lawsuit with a written answer, the lender automatically wins the case. However, if you contest the lawsuit, the court will examine the evidence and decide the outcome. If the lender prevails, the judge will issue a judgment and order the property to be sold at auction.

Nonjudicial Foreclosures

In a nonjudicial foreclosure, the lender follows out-of-court procedures outlined in Nebraska law. After completing these steps, the lender can proceed with selling the property at a foreclosure sale. Nonjudicial foreclosures are typically faster and less expensive than judicial ones, making them the preferred choice for most lenders.

What Are the Steps in the Nebraska Foreclosure Process?

Again, most Nebraska foreclosures are nonjudicial. Here's a step-by-step guide to the Nebraska foreclosure process.

Notice of Default

To start a nonjudicial foreclosure, the trustee records a notice of default in the recorder's office in the county where the property is located. The notice gives you one month to cure the default. You’ll get two months if the property is used in farming operations, and is not located in any incorporated city or village. (Neb. Rev. Stat. § 76-1006, Neb. Rev. Stat. § 76-1012 (2025).)

The trustee also mails a copy of the notice of default within ten days after recording it to anyone who previously filed a request for notice in the county records. (Neb. Rev. Stat. § 76-1008 (2025).)

Notice of Sale

After at least one month, the trustee publishes a notice of sale in a newspaper for five successive weeks, with the last publication at least ten days but not more than 30 days before the sale. (Neb. Rev. Stat. § 76-1007 (2025).)

The trustee must send a copy of the notice of sale at least 20 days before the foreclosure sale date to anyone who previously filed a request for notice in the county records. (Neb. Rev. Stat. § 76-1008).

Foreclosure Auction

The sale is a public sale, open to all bidders. The lender usually makes a bid on the property using a "credit bid" rather than bidding cash. With a credit bid, the lender gets a credit up to the amount of the borrower’s debt. The highest bidder at the sale becomes the new owner of the property.

If a bidder, say a third party, is the highest bidder and offers more than you owe, and the sale results in surplus funds (money over and above what's needed to pay off all the liens on your property), you're entitled to that surplus money.

The purchaser at the foreclosure sale receives a trustee's deed following the sale. (Neb. Rev. Stat. § 76-1010 (2025).)

Nebraska Foreclosure Eviction Laws

If the foreclosed homeowner doesn’t leave the property after a Nebraska foreclosure sale, the new owner must go to court and get an eviction order.

What Are the Options Available for Borrowers During Foreclosure in Nebraska?

You might be able to prevent a foreclosure sale by reinstating the loan, redeeming the property before the sale, filing for bankruptcy, or working out a loss mitigation option, like a loan modification, short sale, or deed in lieu of foreclosure.

Right to Reinstate Before a Foreclosure Sale in Nebraska

“Reinstating” is when a borrower pays the overdue amount, plus fees and costs, to bring the loan current and stop a foreclosure.

Again, under Nebraska law, you get one month (two, if the property is agricultural) to reinstate the loan after the trustee records the notice of default. (Neb. Rev. Stat. § 76-1006). Also, the deed of trust might give you more time to reinstate, or your lender might allow you to pay the money you owe to bring your account current.

Redeeming the Property

Some states have a law that gives a foreclosed homeowner time after the foreclosure sale to redeem the property. Under Nebraska law, though, foreclosed homeowners don’t get a right of redemption after a nonjudicial foreclosure. (Neb. Rev. Stat. § 76-1010 (2025).)

You can redeem the property before the sale by paying off the entire loan amount. However, in practice, borrowers rarely redeem prior to a foreclosure sale. Most homeowners facing foreclosure lack the financial means to pay off the entire loan balance, plus additional fees and costs.

Filing for Bankruptcy

If you're facing a foreclosure, filing for bankruptcy might help. Once you file for bankruptcy, something called an "automatic stay" goes into effect. The stay functions as an injunction prohibiting the lender from foreclosing on your home or trying to collect its debt, at least temporarily.

In many cases, filing for Chapter 7 bankruptcy can delay the foreclosure by a matter of months and eliminate other debts. But if you're behind in mortgage payments when you file, you won't be able to keep your home. To stay in your house, you must be current on payments and be able to protect your equity with an exemption. However, you won't owe anything after foreclosure because Chapter 7 erases mortgage debt. If you want to save your home and you're behind in payments, filing for Chapter 13 bankruptcy might be the answer. To find out about the options available, speak with a local bankruptcy attorney.

Deficiency Judgments Following the Sale in Nebraska

Sometimes, a foreclosure sale doesn’t bring in enough money to pay off the full amount owed on the loan. The difference between the sale price and the total debt is called a “deficiency balance.” Many states allow the lender to get a personal judgment, called a “deficiency judgment,” for this amount against the borrower.

In Nebraska, the foreclosing party may obtain a deficiency judgment by filing a lawsuit within three months after the foreclosure sale. The amount of the deficiency judgment is limited to the lesser of:

• the total indebtedness minus the foreclosure sale price, or
• the total indebtedness minus the fair market value of the home as of the foreclosure sale date. (Neb. Rev. Stat. § 76-1013 (2025).)

What Are the Possible Implications of Foreclosure?

The main consequence of foreclosure, other than losing your home, is that your credit scores will fall. The foreclosure will remain in your credit history for seven years, making it challenging to get future loans or credit at a low interest rate.

Also, you might face a deficiency judgment (see above) if the foreclosure sale doesn't cover the outstanding debt. You might also have trouble finding new housing because of your credit history.

Tips When Facing a Nebraska Foreclosure

• Open your mail. You'll receive certain foreclosure notices and loss mitigation opportunities in the mail. Keep an eye out for them.
• Contact your loan servicer. If you're behind in payments, communicate with your loan servicer (the lender's representative). Having an open dialogue will keep you in the loop. You can find out when the servicer begins the foreclosure process and what's happening in the process. Talking to your servicer can also lead to a solution to your payment arrears, such as a loan modification or repayment plan.
• Be informed about your rights and options. You might want to challenge the foreclosure in court by filing your own lawsuit, especially if the servicer violated state or federal foreclosure laws. Learn these laws and know your rights. Or you might want to apply for a loan modification, short sale, or deed in lieu of foreclosure, which could help you keep your home or minimize your losses. Know your options and pursue them immediately.

Resources for Nebraska Homeowners Facing Foreclosure

Legal Aid of Nebraska can provide free legal assistance to low-income homeowners facing foreclosure. They can also give you information about the Nebraska foreclosure process and tell you about your rights and options under Nebraska law.

A HUD-approved housing counselor can provide helpful information (at no cost) about various alternatives to foreclosure.

Getting Help from a Nebraska Foreclosure Lawyer

Foreclosure laws are complicated. Mortgage servicers and lenders sometimes make errors or forget steps. If you think your servicer or lender failed to complete a required step, made a mistake, or violated state or federal foreclosure laws, you might have a defense that could force a restart to the foreclosure or you might have leverage to work out an alternative. Consider talking to a local foreclosure attorney to learn about your rights. A lawyer can also tell you about different ways to avoid foreclosure.