What happens if i foreclose in minnesota

The sheriff may postpone the sale by publishing a notice in the newspaper where the original notice of sale was published. After the sale, the sheriff gives a certificate of sale to the winning bidder. The certificate of sale effectively transfers ownership and possession rights to the winning bidder after the redemption period.

The redemption period is where most of the action happens. If the winning bid amount is lower than the value of the home, investors will approach the home owner and attempt to purchase the deed from them. Homeowners will also attempt to sell the home so that they can pay the redemption price and avoid having a foreclosure on their record.

In Minnesota, a borrower usually has a six-month redemption period, but some property types and mortgages allow for a month redemption period. During this time, the borrower can redeem the property by paying the total amount of the bid plus interest and any applicable costs. Once the redemption period ends, the party that owns the certificate of sale usually the bank is the new homeowner and can legally take possession of the house.

If someone is still living in the house than the new owner must go through the eviction process. Once the property is vacated the banks' loss mitigation department will officially list the home for sale with one of the Minnesota real estate listing agents that they contract with.

For example, if you just got a new job or if you are expecting a sum of money from some other source in the near future, postponement may be a good idea. Postponing the sale does not help you get more time in your home because your redemption period is shortened to 5 weeks.

If you want legal advice about how to postpone your sale contact a lawyer right away. You can also go online to create forms and get other information. You can create a Foreclosure Sale Postponement Affidavit online. You can read more about postponement and find a housing counselor at the Minnesota Home Ownership Center: www. When your house is in foreclosure, you will probably be contacted by several people and companies who will offer to help you.

You should be very careful when dealing with anyone who is not part of a non-profit organization that you are familiar with. Some companies will tell you that they will contact your mortgage company and arrange for a modification of your loan with payments that you can afford. You should not give money to anyone other than directly to your mortgage company to help you get a loan modification. Non-profit foreclosure prevention counselors are available throughout the state, and they will help you do this for free.

Also, you can contact the mortgage company yourself to try and negotiate with them. Someone may also offer to buy your home and then rent or sell it back to you. They say that they want to help you, and that this will give you a chance to save your home or fix your credit. Be careful! You always have other options. Do not sign anything that could put your home and equity at risk without talking to a trusted real estate or legal professional or a foreclosure prevention counselor.

Call the Home Ownership Center at in the metro or 1 outside the metro. You can also go to their website at www. Their foreclosure prevention counselors will talk to you about your situation, identify your options, and help you make a plan to avoid foreclosure of your home. LSC's support for this website is limited to those activities that are consistent with LSC restrictions. Skip to main content X close. Call or text your zip code to X Click here to leave this site now.

If you are faced with mortgage default or foreclosure, arm yourself with information, ask for help, and take decisive action to protect your interests. The foreclosure process takes place in several stages including default, sheriff's sale, and redemption period. Generally, the lender will provide points of contact and request that the borrower contact the lender to discuss options and may begin additional collection efforts on the mortgage.

Borrowers should take affirmative action to contact the lender at this point to try to work out any short-term or long-term payment problems.

Do not ignore messages from the lender or its legal representatives. The sooner the borrower contacts the lender to address the problem, the better. During the redemption period, the borrower may attempt to refinance the home through a new mortgage. Remember, however, that the borrower may be responsible for fees incurred during the foreclosure process in addition to the amount bid for the property at the sheriff's sale.

The total amount the borrower must pay to redeem may be more or less than the amount owed on the mortgage before the sale. Alternately, the borrower may attempt to sell the home in order to take advantage of any equity built up in the home.

If the borrower is unable to refinance or sell the home after the six-month redemption period, he or she must vacate the property. The trade-off is that the redemption period is reduced to five weeks, instead of six months.

You should consult with a mortgage professional before filing for postponement. Dual tracking is not allowed in Minnesota. If this is the case, the servicer must wait until the end of all applicable appeals before proceeding with foreclosure.

Contact the lender as soon as possible. Ask the lender what the options are. Be realistic about your financial situation. For instance, some borrowers may fall behind temporarily due to a change in work status, health issues, or other short-term economic changes.

If you are behind in your payments, consider the following tips:. Unfortunately, scam artists often attempt to take advantage of people in vulnerable financial situations such as default or foreclosure. After filing the notice of pendency, a notice of sale is published in a newspaper for six weeks before the sale. The lender also has to serve a notice of sale to you the home's occupant four weeks before the sale.

Another notice, a redemption rights notice, contains information about the homeowner's right to redeem the property see below and other rights after the sale. In addition, the lender also must provide an advice notice, which includes information about how the borrower can get help avoiding foreclosure.

Under Minnesota law, if the property is classified as a homestead, is occupied by the owner as a homestead, and contains one to four dwelling units, the borrower or homeowner can choose to postpone the foreclosure sale ; but the trade-off is a reduced redemption period see below of five weeks. You must do all this after the notice of foreclosure sale is published, but at least 15 days prior to the scheduled sale date specified in that notice.

Depending on the circumstances, the postponement will be for five months or 11 months. At the sale, the lender usually makes a credit bid.

The lender can bid up to the total amount owed, including fees and costs, or it may bid less. Sometimes, depending on state law, when the lender is the high bidder at the sale but bids less than the total debt, it can get a deficiency judgment against the borrower. Other times, state law prohibits a deficiency judgment see below. But if a bidder, say a third party, is the highest bidder and offers more than you owe, and the sale results in excess proceeds —that is, money over and above what's needed to pay off all the liens on your property —you're entitled to that surplus money.

After the redemption period ends, the new owner may file an eviction lawsuit against you the former owner. A few potential ways to stop a foreclosure include reinstating the loan, redeeming the property before or after the sale, or filing for bankruptcy. Of course, if you're able to work out a loss mitigation option, like a loan modification , that will also stop a foreclosure.

Minnesota law permits a borrower to reinstate a defaulted loan at any time before the sale. One way to stop a foreclosure is by " redeeming " the property. To redeem, you have to pay off the full amount of the loan before the foreclosure sale.

Some states also provide foreclosed borrowers with a redemption period after the foreclosure sale , during which they can buy back the home. In Minnesota, most homeowners have six months to redeem the home after the foreclosure. If the borrower abandons the home or postpones the sale, a court can reduce the redemption period to five weeks.

If you're facing a foreclosure, filing for bankruptcy might help. In fact, if a foreclosure sale is scheduled to occur in the next day or so, the best way to stop the sale immediately is by filing for bankruptcy. Once you file for bankruptcy, something called an " automatic stay " goes into effect.

The stay functions as an injunction, which prohibits the lender from foreclosing on your home or otherwise trying to collect its debt, at least temporarily. In many cases, filing for Chapter 7 bankruptcy can delay the foreclosure by a matter of months.

Or, if you want to save your home, filing for Chapter 13 bankruptcy might be the answer. To find out about the options available to you, speak with a local bankruptcy attorney.

In a foreclosure, the borrower's total mortgage debt sometimes exceeds the foreclosure sale price. The difference between the total debt and the sale price is called a "deficiency. In some states, the lender can seek a personal judgment against the debtor to recover the deficiency. Generally, once the lender gets a deficiency judgment, the lender may collect this amount from the borrower.