Foreclosure and Foreclosure Process in Minnesota
Minnesota foreclosure sale and foreclosure process do happen in any neighborhood. Some day you have missed a payment; your lender may call to remind you that the payment was due and attempt to arrange payment. You may receive a number of calls if you continue to fail to make your payment, and you are defaulting on your mortgage. Defaulting mortgage can ultimately lead to you losing your home-foreclosure in Minnesota.
It is sad to say that, but Minnesota foreclosure process is actually designed to protect homeowners and give them a fair and reasonable opportunity to keep their home. The foreclosure process in Minnesota ensures the homeowner has time to secure additional funds, seek help from friends and family, contact lender for loan assistance or government programs, or even short sell the home to satisfy the debt.
Minnesota Foreclosure
State of Minnesota uses a judicial and non-judicial foreclosure process and offers a right of Redemption. The redemption period is the time after the sale when the homeowners have the right, but not the obligation, to reclaim their property. In order to get their home back, the homeowners have to pay off the outstanding mortgage balance and all costs- taxes, penalties, interest, and other qualifying expenses incurred during the foreclosure process and file an affidavit for having paid. If you are unable to reclaim the property, you can continue to live in the home until the end of redemption period. For residential property in Minnesota, typically there are six months redemption period for homeowners. At least you can save as much as possible before you look for a new place at end of the redemption period.
Minnesota foreclosure process and foreclosure process timeline
When homeowner is in 30-45 days late, your lender calls and sends out missed payment notice letters. Minnesota foreclosure process typically begin after you have made no payments for 60 days or more.
Home foreclosure process in Minnesota step by step
Step 1: Homeowner in Minnesota will receive default/intend to foreclosure notice. Notice of Default or the foreclosure notice is an official announcement to the public that the Minnesota foreclosure process has begun for a particular property.
Step 2: Lender forwards mortgage account to foreclosing attorney initiating foreclosure process in Minnesota .
Step 3: Homeowner will receive a pre foreclosure notice from lender. If you have already tried the loan assistance and government programs from your lender without a workout result, you should consider short sale your Minnesota property during the pre-foreclosure period.
Step 4: foreclosure sale (Sheriff’s Sale) date is scheduled by foreclosing attorney. A short sale should be considered still even if the foreclosure process has started.
Step 5: By law, foreclosure and foreclosure sale in Minnesota is a public process.
Since most foreclosure sales in Minnesota are by advertisement which does not involve court action but requires notice commonly. Since Minnesota foreclosure is public-these foreclosure sales notices must be published in the local newspaper for several consecutive weeks. In Minnesota usually they will be published for 6 consecutive weeks.
The foreclosure sale (Sheriff’s Sale) notice must include the borrower, owner, and lender names; the original loan amount; the mortgage date; recording information; the default amount due; a property description; the time and location of the sale; and the redemption period.
Step 6: Usually lender sends a person to deliver the notice of the foreclosure sale (Sheriff’s Sale) to homeowner 4 weeks before the foreclosure sale (Sheriff’s Sale) date in Minnesota. In some cases the foreclosure sale may be postponed once a written, signed offer is received and approved by your lender- Minnesota Short sale. After the publication process is complete, the foreclosure sale will proceed.
Step 7: Foreclosure sale (Sheriff’s Sale) happens.
The county sheriff or sheriff’s deputy conducts the foreclosure sale between 9:00 a.m. and sundown at a public place, usually the sheriff’s office. If homeowner is not able to bring the mortgage current, the lender sells the property at a public auction to recover its losses, including the balance of the loan as well as the costs of collecting the debt and foreclosing on the property. Anyone may bid at the sale, and the property is sold to the winning bidder. In many cases, the lender will purchase the property at the foreclosure sale (Sheriff’s Sale) and becomes the holder of the sheriff’s certificate.
Step 8: After the foreclosure sale (Sheriff’s Sale) has been held, for residential property in Minnesota, the redemption period is typically six months. The certificate of sale will be effectively transferred ownership and possession rights to the winning bidder (lender, in many cases) after the redemption period.
Step 9: The homeowner can continue to live in the home until the end of the redemption period. If the owner wants to keep the property, owner must pay off the amount bid at the Sheriff’s sale, plus interest and any other related fees; if the owner wants to sell the property, the homeowner still has the right to sell and retain any equity that may exist. In general there is six months redemption period for residential homeowners in Minnesota. Minnesota short sale process can still be completed during the six months redemption period after the foreclosure sale (Sheriff’s Sale). Most banks still consider short sale process in Minnesota and accept the final approval for the Minnesota short sale transaction.
Step 10: By the end of redemption period, the homeowner has to vacate the property. The lender holds the sheriff’s sale certificate becomes the rightful owner of the property in Minnesota (known as an REO property). If the homeowner has not moved out by the end of the redemption period, they will be asked to vacate the premises by a specific date. If they do not comply, the new owner which is lender can start the foreclosure eviction process in Minnesota by filing an “unlawful detainer”, which goes on record and can negatively affect future credit.
As a general rule, if the first mortgage is foreclosed by advertisement which is used by most type of foreclosure in Minnesota, there will be no deficiency judgment after the foreclosure in Minnesota. However, if you have junior mortgages, including a home equity line of credit or home equity loan, a junior lien holder could choose to sue and seek a deficiency judgment after Minnesota foreclosure process for the amount due under the junior lien. There are Ten Facts for Mortgage Debt Forgiveness from IRS you may want to know. The best way to determine what is happening in your situation is to ask a Minnesota real estate foreclosure attorney.
