Minnesota Foreclosure Process and Laws

 


Quick Facts About the Foreclosure Process in Minnesota

Judicial Foreclosure Available: Yes

Non-Judicial Foreclosure Available: Yes

Primary Security Instruments: Deed of Trust, Mortgage

Timeline: Typically 60 days

Right of Redemption: Yes

Deficiency Judgments Allowed: Yes

In the state of Minnesota, deeds of trusts or mortgages may be forclosed by the lenders through judicial as well as non-judicial procedures.

Judicial Foreclosure
The judicial process is used for cases where the power of sale is unavailable in the deed of trust and the mortgage. Basically, the judicial foreclosure process requires a lawsuit in order to obtain foreclosure from the court. Once this is is granted, the house will then be ready to be auctioned off.

Non-Judicial Foreclosure
In cases where the “power of sale” caluse is state in either the mortgage or deed of trust, the non-judicial process is used. This power of sale gives the lender the option to sell the house in cases when they are unable to pay the remaining balance of the loan. This also gives the lender or even the trustee an option whether to allow the sale of property. To better understand this, the “Power of Sale Foreclosure Guidelines” will further explain the process of actually doing this.

Power of Sale Foreclosure Guidelines
The Power of Sale clause indicates the following which must be followed:

  • Time
  • Terms of Sale
  • Place
  • Procedure

Specifically in the state of Minnesota, there are specific conditions that must be met before a non-judicial foreclosure can be done especially if the power of sale is incomplete.

  • There is an existing notice that has been submitted 8 weeks before the foreclosure.
  • There is no existing lawsuit on the mortgage payment.
  • There are no records of new mortgage lenders.

The non-judicial process can now be completed once all of these are met.

  1. Provide a notice of sale. This must include the property description, name of lender, both the original and updated loan amount and the date of mortgage.
  2. Indicate in the notice the details of the sale which includes the time, date and the place where the property is located.
  3. It is the sherrif of the location which will be in charge of the sale. It is very important that he will state the amount which is due during the sale. All of these should be indicated in the notice, created by the lender.
  4. The property will be sold to the highest bidder. He should receive the certificate of sale.
  5. It is an option for the lender to complete a deficienty budget which will be valid for 1 year in order to get back the property. This is only limited to the amount of the fair marker value of the house and the balance (based on original loan).

Foreclosure Avoidance Counseling

HUD-approved housing counseling agencies are available to provide you with the information and assistance you need to avoid foreclosure. As part of President Obama’s comprehensive Homeowner Affordability and Stability Plan (HASP), you may be eligible for a special Making Home Affordable loan modification or refinance, to reduce your monthly payments and help you keep your home.

If you need help understanding the Making Home Affordable programs, you can use this search tool to find a counseling agency in your area that will provide you with free foreclosure prevention services. If you are eligible for the loan modification or refinance program, the counselor will work with you to compile an intake package for your servicer.

Foreclosure prevention counseling services are provided free of charge by nonprofit housing counseling agencies working in partnership with the Federal Government. These agencies are funded, in part, by HUD and NeighborWorks® America. There is no need to pay a private company for these services.

Minneapolis Field Office

International Centre
920 Second Avenue South, Suite 1300
Minneapolis, MN 55402-4012

Phone: (612) 370-3000

Fax: (612) 370-3220
TTY: (612) 370-3186

Jurisdiction: State of Minnesota

Dexter Sidney

Field Office Director

Office Hours: 8:00 a.m. to 4:30 p.m.
Monday through Friday