When a mortgage held by the state as security for the investment of permanent school funds of the state is in default and the foreclosure thereof is deemed advisable, the Bank of North Dakota, acting on behalf of the board of university and school lands, may accept from the owner of the record title of the land covered by the mortgage a deed conveying the land to the state. Such deed transfers and extinguishes all title, interest, and right of redemption of the grantor but does not extinguish the mortgage lien on the land. Such lien may be foreclosed subsequently in the manner provided by law. The deed may be recorded in the office of the recorder of the county wherein the land is situated, and the mortgage held by the state may be released and satisfied. A deed of conveyance from the date of its execution has the same legal effect for all purposes as a sheriff’s deed would have if the mortgage involved had been foreclosed.