Stop Foreclosure in Minnesota


How to Stop Foreclosure in Minnesota

There are some Minnesota foreclosure laws that are different from that which you can find in other states. For one, the home foreclosure process that begins in this state primarily informs that borrower of his or her inability to pay for his or her dues. The state allows two type of foreclosure process which are also known as judicial and non-judicial closure. The first one requires the intervention of the court while the latter doesn’t.

One thing you have to realize though is that most foreclosure processes in Minnesota are non-judicial because most mortgages contain a power of sale clause that basically means that the lender is authorized by the borrower to sell his or her property in the condition that he or she can no longer pay for it. The process usually takes between 60 and 90 days to process and the process can be stopped any time unlike in other states.

When the power of sale is attached to the previous agreement, it is necessary to have this type of agreement followed otherwise more problems can be encountered. When these things are met, certain information need to be filled out to serve as a record or a proof of statement.

Minnesota properties that are not paid by the borrowers can also be sold at auctions and when this is done, it automatically has a redemption period, By this we mean that at any given time, and with the condition that the owner can already pay for the home, it can be released from auction and sold once again to the previous owner. There would also be paperwork and a lot of notices involved to help make the process more legal and much easier to understand and settle.

These information are just a few and you can gather more through your reading on online websites you can find.

Synopsis of Minnesota Foreclosure Laws

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 Minnesota, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure

The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Non-Judicial Foreclosure

The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A “power of sale” clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the “Power of Sale Foreclosure Guidelines”.

Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. However, in Minnesota, a non-judicial foreclosure may only occur if: 1) no lawsuit to collect the on the mortgage is already underway; 2) the mortgage and any assignments of the mortgage to new lenders have been recorded; and 3) a notice has been given eight (8) weeks before the foreclosure on a homestead.

If all of these conditions have been met, then the foreclosure may proceed as follows:

  1. A notice of sale, containing the borrower and lender(s) name, the original loan amount and current amount of default, the date of the mortgage, a description of the property and the time, place and date of the foreclosure sale, must be recorded in the county where the property resides.
  2. The sheriff of the county in which the property is located must conduct the sale on the date specified in the notice of sale. At some point during the sale, the sheriff must read an itemized statement, which has been filed by the lender, of the amount due at the time of the sale. The property is sold to the highest bidder, who will receive certificate of sale.
  3. Lenders may pursue a deficiency judgment, but it is limited to the amount of the fair marker value of the property and the unpaid balance of the original loan. Borrowers have up to one (1) year to redeem the property by paying the past due amount on the loan.

Where to go to for Foreclosure Help

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

Stop Foreclosure Early

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