Minnesota Foreclosure Law Summary
Stop Minnesota Foreclosure
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.
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