A House in Foreclosure

If the bank is foreclosing on your home, you may be wondering about the process and the legal consequences of a Minnesota foreclosure.

This is part three of a series on Minnesota foreclosures, explaining foreclosure by action. For an overview of Foreclosure by Advertisement and Foreclosure by Action, read the first part on Minnesota Foreclosures.

  1. Minnesota Foreclosure Law
  2. Foreclosure by Advertisement
  3. Foreclosure by Action
  4. Deficiency Judgments
  5. Foreclosure of a 2nd Mortgage

If your not sure what a foreclosure is, go to this link for a short explanation regarding the basics of Minnesota Foreclosures.

There are two types of foreclosure in Minnesota: Foreclosure by Advertisement and Foreclosure by Action. This article covers Foreclosure by Action.

Minnesota Foreclosure by Action

Foreclosure by Action in Minnesota is the process of foreclosing on your property by legal action (a lawsuit). In other words, foreclosure by action is the process of initiating a case in the Minnesota courts and making you a party. This would typically involve you receiving a summons and complaint.

The bank, or the institution that holds the mortgage, would be the plaintiff. As the homeowner, you would be the defendant. There may also be other defendants, such as other lending institutions that have some ownership interest in the mortgage or property. Immediately after the lawsuit is initiated, the bank should file a notice of lis pendens with the county recorder or register of titles if the property is registered. The court action would then proceed. Finally, Foreclosure by Action would involve a Minnesota court judge issuing an order in your case.

Personal Liability for a Deficiency Judgment

The most important thing to know about the difference between Foreclosure by Advertisement and Foreclosure by Action, is that, in a Foreclosure by Action, you will likely be liable for any deficiency that remains after the home is sold. In other words, if the home sells for less than the amount owed to the bank, you will still be liable for this deficiency amount. Generally, you will not owe the deficiency amount to the bank in a Foreclosure by Advertisement, because a deficiency judgment is generally not available in Foreclosure by Advertisement.

Am I Being Foreclosed by Advertisement or Action?

How do you know if the property is being foreclosed by advertisement or by action? Typically, foreclosure by action wouldn’t fault you being personally served with a summons and complaint naming you in a lawsuit. Foreclosure by Advertisement would mean that there is no lawsuits or legal action against you, and instead, the bank is selling the property by advertising the foreclosure sale in a local newspaper.

Additional Minnesota Foreclosure Resources

Learn more about Minnesota Foreclosures:

  1. Minnesota Foreclosures 101 – Foreclosure Basics
  2. Minnesota Foreclosures: Foreclosure by Advertisement
  3. Minnesota Foreclosures: Foreclosure by Action
  4. Minnesota Foreclosure Deficiency Judgment
  5. Minnesota Foreclosure of a 2nd Mortgage

If you are facing a foreclosure in Minnesota, you are welcome to contact our law firm to schedule a meeting with a Minnesota foreclosure attorney to understand your legal rights, risks, and options.