Many Minnesota homeowners are facing foreclosure during these difficult economic times. Minnesota homeowners may wonder about the foreclosure process in Minnesota and the legal consequences of a foreclosure.
This is part two of a series on Minnesota foreclosures, and covers the basics of foreclosure by advertisement. Before reading this section, you might want to read an overview of Minnesota Foreclosure Law, which provides an overview of Foreclosure by Advertisement and Foreclosure by Action.
- Minnesota Foreclosure Law
- Foreclosure by Advertisement
- Foreclosure by Action
- Deficiency Judgments
- 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 Advertisement.
Minnesota Foreclosure by Advertisement
Foreclosure by Advertisement in Minnesota is the process of foreclosing on your property by advertising the foreclosure sale rather than filing a lawsuit (action) against you. Minnesota Foreclosure by Advertisement is usually simpler, cheaper, and quicker for the bank than Foreclosure by Action.
If you are a Minnesota homeowner facing foreclosure, you may be most concerned about whether you will be liable for the amount remaining owed on the mortgage after the foreclosure sale. This amount is called a deficiency. In other words, even after the foreclosure sale, there may not be enough money from the proceeds of the sale to cover the amount of the mortgage plus the expenses in fault with the foreclosure sale. Generally, a homeowner will not be liable for the deficiency if the property was foreclosed by advertisement, but a homeowner will be liable for the deficiency if the property was foreclosed by action.
Am I Being Foreclosed by Action or Advertisement?
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.
When is Foreclosure by Advertisement Permitted in Minnesota?
Foreclosure by Advertisement cannot be used in all cases. Foreclosure by Advertisement is only available where the statutory requirements have been fulfilled. For example
- Foreclosure by Advertisement must occur within 15 years of maturity of the mortgage. See Minn. Stat. 580.01, 541.03.
- The bank has not started a lawsuit, or if one has started, the bank has discontinued it. See Minn. Stat. 580.02.
- The Minnesota Statutes include other requirements as well.
Process for Foreclosure by Advertisement in Minnesota
The process for foreclosure by advertisement in Minnesota typically involves the following steps:
- The bank will record or register mortgage and assignments that are not already recorded or registered
- A power of attorney must be executed, acknowledged, and recorded in the county where the foreclosure sale will occur
- The bank must determine the status of title and the holders all the interest in the property by doing a title search
- The bank should determine the redemption period
- The bank should contact the sheriff to determine the time and place of the foreclosure sale
- The bank must schedule the foreclosure sale
- The bank must issue a notice of the foreclosure sale as required by Minn. Stat. 580.04, 580.03, 580.032, 580.041, 580.042 or other applicable statutes
- For registered land, the bank must record the notice of foreclosure and power of attorney before publishing a foreclosure notice (see Minn. Stat. 508.57)
- The bank must publish a notice all the foreclosure sale for six weeks by advertising in the appropriate newspaper in accordance with Minn. Stat. 645.11.
Additional Minnesota Foreclosure Resources
Learn more about Minnesota Foreclosures:
- Minnesota Foreclosures 101 – Foreclosure Basics
- Minnesota Foreclosures: Foreclosure by Advertisement
- Minnesota Foreclosures: Foreclosure by Action
- Minnesota Foreclosure Deficiency Judgment
- 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 real estate attorney to understand your legal rights, risks, and options.
“Foreclosure by Advertisement must occur within 15 years of maturity of the mortgage. See Minn. Stat. 580.01, 541.03.”
Does this mean that, for a 30 year mortgage, it must be at least 15 years old (15 years since it was taken out) in order to qualify as Foreclosure by advertisement and any mortgage less than 15 years old must be processed as a foreclosure by action?
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