Minnesota
Foreclosure Law
Summary
Quick
Facts
-
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:
- 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.
- 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.
- 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.
More information on Minnesota
foreclosure laws.
DISCLAIMER
