Under South Dakota law, there are primarily two different types of foreclosure proceedings which may be conducted for a mortgage: (1) procedures under S.D. Codified Laws Chapter 21-47 (“Chapter 21-47”); or (2) under the “One Hundred Eighty Day Redemption Mortgage Act” (Ibid. §§ 21-49-11 through 21-49-40; referred to in this article as the “Act”).
For the Act to apply, the subject property of the mortgage must not be more than forty acres in size (see Ibid. § 21-49-11) and the mortgage must contain certain provisions (e.g., see Ibid. § 21-49-12). FNMA’s and FHLMC’s uniform mortgage for South Dakota (Form 3042) are structured to be subject to the Act (one of the advantages of which is a shorter redemption period).
While the majority of loans we handle are for properties which are 40 acres or less in size, there have been rare cases where clients have attempted to generate documents for loans secured by property which is more than 40 acres. To accommodate for these loans, we will be modifying Cx350 and Cx508 to print language which is compatible with the provisions of Chapter 21-47 (instead of the Act). When “Property More than 40 Acres” (FI 103856) equals “Yes”, the following changes will occur within these documents:
- The title of the documents will change from “Mortgage – One Hundred Eighty Day Redemption” to “Mortgage”;
- The provisions in Section 19 on both documents concerning the borrower’s right to reinstate the loan after acceleration prior to the occurrence of certain, specific events will be changed to state that the right to reinstatement is preserved until such period as Applicable Law might specify. This is done due to the multiple times under Chapter 21-47 that reinstatement may occur (g., see Ibid. §§ 21-47-8, 21-47-10, 21-47-23, & 21-47-24);
- The last paragraph in Sections 17 of Cx508 and 22 of Cx350 will change so that the language is more compatible with the foreclosure procedures outlined in Chapter 21-47 (see §§ 21-47-1 through 21-47-10 & 21-47-18);
- The language in Sections 18 of Cx508 and 23 of Cx350 will change to stipulate that in any foreclosure by action, the borrower may redeem the property in accordance with the procedures outlined in Chapter 21-52 (see Ibid. 21-49-13);
- Section 24 of Cx350 and the “Notice” in Section 17 of Cx508 will not print (and, for Cx350, subsequent paragraphs will be renumbered accordingly); and
- The language in Sections 23 of Cx508 and 27/28 of Cx350 will states that the borrower warrants that the subject property is more than 40 acres in size.
This change will take effect on May 3, 2018. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.