A mortgage is a contract or agreement that includes a promissory note in which the mortgagor (borrower) agrees to repay the loan to the mortgagee (the lender—often a bank) and agrees that the real property that is the subject of the mortgage will serve as security or collateral for payment of the loan.

If the mortgagor (borrower) fails to timely make the loan payments, the lien created by the mortgage allows the mortgagee (lender) to seek judicial foreclosure on the property (a forced sale effected through the courts) and use the proceeds to pay the balance of the loan—plus any additional fees and penalties the mortgagor (borrower) is obligated to pay.

Some states use a mortgage agreement to secure the repayment of a loan for the purchase of real property and some states use a deed of trust.

In a mortgage, the mortgagor (borrower) retains title to the property (ownership) and grants the mortgagee (lender) a lien on the property. The mortgagor and mortgagee are the only two parties to the transaction and if the mortgagor defaults on the loan, the mortgagee must seek judicial foreclosure of the lien through the courts to sell the property and use the proceeds to satisfy the loan.

In a deed of trust, the grantor (borrower) transfers title (ownership) of the property to a third party (the trustee—often a title company) to hold title to the property as security or collateral, protecting the grantee (lender) until the grantor (borrower) repays the loan in full.

When a deed of trust serves as the security or collateral for the loan on the property, the lender may sell the property without going through the court system—and this is known as nonjudicial foreclosure. Nonjudicial foreclosure is usually less time-consuming and less expensive for the lender.

In South Dakota, a mortgage is a legal instrument that involves a promissory note where the borrower (mortgagor) agrees to repay the lender (mortgagee) and pledges the property as collateral for the loan. If the borrower fails to make payments, South Dakota law permits the lender to initiate a judicial foreclosure process, which involves the courts to force the sale of the property to satisfy the debt, along with any additional fees and penalties. South Dakota primarily uses the mortgage system rather than a deed of trust. Therefore, in the event of a default, the lender must go through the judicial foreclosure process; there is no provision for nonjudicial foreclosure in South Dakota for mortgages. The borrower retains the title to the property while granting a lien to the lender as security. It's important to note that the specific procedures and requirements for foreclosure are governed by state statutes and can be complex, so consulting with an attorney for guidance in such matters is advisable.