Minnesota Foreclosure Laws
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: Yes
Security Instruments: Mortgage, Deed of Trust
Right of Redemption Period: Yes
Deficiency Judgments Allowed: Yes
Time Frame: Typically 60 Days
Public Notice: Publication
Minnesota is considered to be a title theory state, which means that a property title will remain in trust until the loan is paid in full. In the state, a title can be secured by either a mortgage or a deed of trust. The mortgage and deed of trust serve the same purpose and have the same basic terms.
When a mortgagor defaults in Minnesota, lenders may choose to through either a judicial or non-judicial foreclosure process. The state has a statutory right of redemption period in which a borrower can try to reclaim their property by satisfying the remaining balance of their loan plus any additional costs. The period varies from six (6) to twelve (12) months or thirty-five (35) days if the property is abandoned.
Lenders are allowed to pursue a deficiency judgment, but it is limited to the amount of the fair market value of the property along with the unpaid balance of the original loan. Borrowers will have up to one (1) year to redeem the property by paying the past due amount on the loan.
Types of Foreclosures Allowed in Minnesota
Minnesota statute allows for judicial foreclosures on defaulted property. This type of foreclosure, also known as foreclosure by judicial sale, involves selling the defaulted property under court supervision. In order for a judicial foreclosure to be possible, no power of sale clause may be present in the loan documents. The lender must file a lawsuit against the borrower and obtain a court order to foreclose. The property will then be auctioned off to the highest bidder.
The state of Minnesota also allows for a non-judicial foreclosure, which is also known as foreclosure by power of sale. In order for non-judicial foreclosures in Minnesota to be possible, the loan documents must contain a power of sale clause. The purpose of the clause is to authorize the lender to sell the property in the event of default to be able to recover what is owed on the property. Non-judicial foreclosures allow for the property to be sold without court supervision.
There are two ways in which a non-judicial foreclosure in Minnesota can proceed. If the power of sale clause states a specific time, place, and outlines terms of sale, then the lender must follow the procedure that is stated. If there is no specification, then the sale must follow the following guidelines:
1. Before initiating the foreclosure, the attorney conducting the process must obtain and file a power of attorney indicating the pending foreclosure. Then the lender, through the attorney, must publish a notice of sale, containing the borrower and lender’s name, the original loan, a description of the property and the time, date and time of the foreclosure sale, as well as other relevant details. The notice must be published for six (6) consecutive weeks in a newspaper that circulates where the property is located.
2. All occupants/owners of the property must be served a foreclosure notice at least four (4) weeks prior to the sale. If dealing with a homestead property, the parties must be notified eight (8) weeks prior.
3. The sheriff of the county where the property is located will conduct the sale. E sale must take place between 8 a.m. and sundown. During the sale, the sheriff must read an itemized statement filed by the lender detailing the amount due at the time of the sale. The property will be sold to the highest bidder.
Working with a Foreclosure Attorney in Minnesota
Due to the current staggering economy, many mortgagors are finding it difficult to keep up with their payments. Although receiving a notice of foreclosure can be scary, there is still help available for mortgagors that default. If you are behind on your payments or have already received a notice of foreclosure, turn to a leading foreclosure lawyer in Minnesota right away to discuss your options and file a claim.
Foreclosure attorneys do whatever it takes to prevent your home from being repossessed. They will speak to lender and try to work out an agreement in which everyone benefits. Your foreclosure lawyer may suggest mortgage modification, refinancing or even a temporary halt in payments. Regardless of the plan, you can rest assured that your case will end with the best possible outcome when you work with an acclaimed Minnesota foreclosure attorney.
You have rights as a homeowner in Minnesota. Turn to a top team of foreclosure lawyers in Minnesota to prevent your home from being repossessed.