- 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.
