Foreclosure Process and Laws in South Dakota

If you fail to make your mortgage payments in South Dakota, the lender can eventually initiate the foreclosure process, which can lead to the sale of your home. In South Dakota, the foreclosure process will be either judicial or nonjudicial, depending on the circumstances.

South Dakota foreclosure laws, in conjunction with federal regulations, provide clear guidelines on how foreclosures proceed while also ensuring that homeowners are afforded certain rights and protections throughout the process.

What Are My Foreclosure Rights in South Dakota?

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

Your Mortgage Rights in South Dakota

If you get a loan to buy a home in South Dakota, you'll likely sign two documents: a promissory note and a mortgage.

• Promissory note. The promissory note is the document that contains your promise to repay the loan along with the repayment terms.
• Mortgage. The mortgage 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 mortgage gives the lender the right to sell the home through the foreclosure process 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 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 South Dakota Homeowners

In addition, South Dakota homeowners facing foreclosure get the right to:

• receive notice of the foreclosure
• pay off the loan to prevent a sale
• file for bankruptcy
• redeem the home after the sale, and
• get any excess money after a foreclosure sale.

What Are the Different Types of Foreclosure in South Dakota?

If you fail to make your mortgage payments in South Dakota, 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 South Dakota 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 South Dakota Foreclosure Process?

In a South Dakota nonjudicial foreclosure, the lender must serve you (the borrower) a notice of sale at least 21 days before the sale date. The lender must also publish the notice in a newspaper at least once each week for four successive weeks. (S.D. Codified Laws § 21-48-6.1, § 21-48-6 (2025).).

Even if the lender starts a nonjudicial foreclosure, you can require the lender to foreclose judicially through the court system by making an application in the appropriate court. (S.D. Codified Laws § 21-48-9 (2025).). To learn the process and deadline for converting a nonjudicial foreclosure into a judicial one, talk to a local attorney. Or, the lender might opt to foreclose judicially from the beginning.

South Dakota also permits “voluntary” foreclosures. In this type of foreclosure, the lender and borrower mutually agree that the lender may take immediate possession of the property. The borrower agrees to forfeit the right to redeem the property and the lender agrees to forfeit the right to go after the borrower for a deficiency judgment. (S.D. Codified Laws § 21-48A-1 (2025).)

Foreclosure Sales in South Dakota

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.

What Are the Options Available for Borrowers During Foreclosure in South Dakota?

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

Reinstating the Loan

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

Right to reinstate the loan in a nonjudicial foreclosure. South Dakota law doesn’t provide a borrower with the right to cure the default and reinstate the loan before the foreclosure sale in a nonjudicial foreclosure. But the mortgage contract might provide reinstatement rights. If you’re facing a nonjudicial foreclosure, check the mortgage you signed when taking out the loan to find out if it gives you a right to reinstate, and, if so, how long you have in which to do so.

Right to reinstate the loan in a judicial foreclosure. If the foreclosure is judicial, you do get the right to reinstate under state law. If you pay the reinstatement amount before the court enters a judgment in a judicial foreclosure, the court will dismiss the foreclosure action. But if you reinstate after judgment, but before the sale, the court will stay (postpone) the foreclosure action. If you default again, the foreclosure can continue. (S.D. Codified Laws § 21-47-8, § 21-47-10 (2025).)

Redemption Period After a Foreclosure Sale in South Dakota

Some states have a law that gives a foreclosed homeowner time after the foreclosure sale to redeem the property. Under South Dakota law, you’ll get one year, 180 days, or 60 days to redeem the home after the foreclosure, depending on the circumstances.

In general, the borrower gets one year to redeem the home after a foreclosure sale. (S.D. Codified Laws § 21-52-11 (2025).) However, if the mortgage is a short-term redemption mortgage, the redemption period is 180 days after the purchaser from the foreclosure sale records a certificate of sale in the land records. (S.D. Codified Laws § 21-49-30, § 21-52-11 (2025).) If you abandon the home, the purchaser can ask the court to reduce the redemption period to 60 days. (S.D. Codified Laws § 21-49-13(8), § 21-49-38 (2025).)

You also get the right to redeem the property before the sale.

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 probably 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 South Dakota

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.

Deficiency judgments after nonjudicial foreclosures in South Dakota. South Dakota law allows the lender to get a deficiency judgment after a nonjudicial foreclosure. If the lender purchases the property, the amount of the deficiency is limited to the difference between the total debt and the property’s fair market value. (S.D. Codified Laws § 21-48-14 (2025).)

Deficiency judgments and judicial foreclosures in South Dakota. Deficiency judgments are also sometimes allowed in judicial foreclosures. The court will take the property’s value into account and look at other factors when deciding whether a deficiency exists. (S.D. Codified Laws § 21-47-16, § 21-47-17 (2025).)

Getting Help from a South Dakota Foreclosure Lawyer

Foreclosure laws are complicated. 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 or legal aid office immediately to learn about your rights. A lawyer can also tell you about different ways to avoid foreclosure. Likewise, a HUD-approved housing counselor can provide helpful information (at no cost) about various alternatives to foreclosure.