Foreclosures For Sale Updated On: 03/17/10
Minnesota Foreclosure Laws
Minnesota Foreclosure Laws
Minnesota usually follows the title theory wherein the title of the property stays as guaranty till the loan in question is paid off in full. The legal document through which the title is secured is generally referred to as a mortgage. Mortgages usually contain the information that could also be found in deeds of trust, and while following a non-judicial foreclosure, both can function in the same way.
The State of Minnesota primarily follows the non-judicial foreclosure procedure to foreclose on properties. No court-action is required in this process but a foreclosure by advertisement notice is looked-for. At the preliminary signing of the mortgage, a power of sale clause is normally added in the document, through which a property can be foreclosed on by an attorney if the borrower defaults on the loan, thereby allowing the unpaid loan to be taken care of; this, at times, is called a bond.
Auctions, which a sheriff conducts, are the most familiar way for foreclosure properties to be sold and lenders normally have attorneys acting as their representatives, to bring into effect the sale. Being a non-judicial process, some very strict requirements for notices exist in Minnesota and a power of sale clause has to be incorporated within the legal loan document for this procedure to be practiced.
Before a foreclosure is initiated, a power of attorney must be filed for by the attorney who is to conduct the proceedings for foreclosure, which should indicate the pending foreclosure. A date for the notice of foreclosure sale should then be published in a general circulation newspaper within the county where the property is situated by the attorney, on behalf of the lender.
All of the owners/occupants of the foreclosure property have to be served with the foreclosure notice as mentioned above, no later than four weeks before the sale. This notice period goes up to eight weeks in the case of homestead property.
The property is then auctioned off by a sheriff to the party that places the highest bid; this could be the lender too. The sale generally takes place between 08:00am and sunset. The sheriff can postpone the sale of foreclosure by placing a postponement notice at the sale’s originally scheduled location.
Lenders in Michigan can also opt for a judicial foreclosure path through a court, where the foreclosure’s final decision is announced by the court. This procedure is referred to as a foreclosure by action. The sheriff then sells the property at a publicly notified sale. A lis pendens, which is a document that is recorded to make known publicly the foreclosure on the property, in conjunction with a complaint, needs to be filed in the court.
The legal document that is made use of is referred to as a mortgage; or a security agreement in cases of commercial transactions. From time to time, the security agreement is merged with the mortgage. A mortgage needs to be filed to corroborate the debt in question and its repayment terms, which are included in the note.
It roughly takes around 60 to 90 days to get into effect a foreclosure that is not contested; this depends on the time the various notices require. If the procedure is contested by the borrower, and if a delay or an adjournment of the sale is sought; or if bankruptcy is filed for, the process can be slowed down.
A redemption period of six months post the foreclosure-sale is in place, where if a borrower can take care of the loan amount that needs to be paid and the costs, the foreclosed property can be reclaimed.
This period is increased to twelve months in case the amount that is due is lesser than two thirds of the amount originally on the loan, as on the date that the foreclosure notice is filed and the area of the property is in excess of ten acres; or if the area of the property is in excess of forty acres.
In cases of mortgages that have been executed post 12/31/1989 and the properties have been abandoned, the redemption period can be reduced to five weeks by an order from the court. An affidavit containing the expenses and costs incurred needs to be filed ten days prior to the end of the redemption period; else, recovery of these might not be possible.
If a foreclosure property sells for lesser than the amount which is secured by the mortgage in question, a deficiency judgment can be acquired. Judgments of deficiency, though, use the property’s fair market value as a limit and subtract from it the balance of the unpaid loan amount.
Non-judicial foreclosures in Minnesota are governed by laws that are part of Chapter 580.01 et. seq. (Mortgages; Foreclosure of Minnesota Statutes (2004).
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