Are you facing the possibility of foreclosure? Knowing the State law is the key to helping you through the process. Minnesota foreclosures are handled both in court (judicial) and out of court (non-judicial). What does that mean to you? Foreclosures are processed both with and without court intervention, depending on the particular case. The timeline is usually four months, not including the redemption period.
1. Pre-foreclosure Period
If you have a Power-of-Sale clause in your mortgage, then a Non-Judicial Foreclosure can be handled out of court. Most mortgage agreements require the lender to notify you before scheduling a sale.
In a Judicial Foreclosure, the process begins when the lender notifies the homeowner of the default. The lender then files a court action with the homeowner. If the court rules against the homeowner, then a sale is scheduled.
2. Notice of Sale/Auction
The notice of sale must be published for six weeks, and the occupants of the home must be notified at least four weeks in advance. The actual notice must contain several key pieces of information, such as, owner, borrower, and lender names, the mortgage date, the original loan amount, the default amount due, recording information, a property description, and the time and location of the sale.
The actual sale must be completed between 9:00 am and sunset in a public place by the sheriff's deputy or the county sheriff. This usually takes place at the sheriff's office. The property will be sold to the highest bidder, which can be the original lender. The highest bidder must be prepared to pay the full amount in cash or a cashier's check. The certificate of sale transfers ownership to the winning bidder after the redemption period. If for some reason the sale must be postponed, the sheriff will publish the postponement in the original publication.
3. Redemption Period
Minnesota law provides for a six month redemption period. However, in some cases it can be extended to twelve months. Abandoned properties can be reduced to a five week period. To determine what type of redemption period you may be facing, it is best to contact an attorney who can explain your options clearly.
If the homeowner is able to pay the total bid amount plus interest and any additional fees, they can effectively, redeem the property and regain ownership.
If at the end of the redemption period the homeowner is unable to restore ownership, the highest bidder becomes the rightful owner of the property. The homeowner will have to vacate the property, if they have not already done so.
Filing for bankruptcy may extend the redemption period by 60 days, from the date of filing. The additional time, in some cases, can allow extra time for the property to sell. It is best to seek legal counsel to determine if this is the solution for you.
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