Minnesota Foreclosure Timeline: Explained by Home Destination help for homeowners and borrowers in foreclosure proceedings to reinstate your mortgage loan with junior lien. Home Destination brings homeowners a clear view of the foreclosure process time line and deadlines for best chances to gain a foreclosure review.
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In Minnesota, generally lenders foreclosure proceedings do not begin until you are a few of months behind in your payments. Whether or not you are able to reinstate your mortgage loan, this will have a negative impact on your credit report. Read more about short sales and foreclosures to know which is best for your situation. Learn why short sales are on the increase.
Comparing State Foreclosure Timelines
The four states that took the longest to complete the foreclosure process were New York (1,056 days), New Jersey (966 days), Florida (861 days) and Illinois (628 days).
In Minnesota, a court foreclosure begins when a lender notifies the borrower of the default. The lender then files a court action against the borrower. If the court rules against the borrower, a sale is scheduled. The majority of Minnesota foreclosures are handled out of court through a power-of-sale clause contained in the mortgage. Under most mortgages, a lender must mail a default notice to the borrower before scheduling the sale.
Minnesota Law Allows For Both Judicial and Non-judicial Foreclosures
With both types of foreclosure proceedings, the borrower can stop the foreclosure any time before the foreclosure sale by paying:
the default amount
and allowable costs
Stages Of A Minnesota Foreclosure
Begins With Months Of Missed Mortgage Payments
In a homeowner has missed three - six months of mortgage payments, the lender orders a trustee to record a Notice of Default (NOD). At the County Recorder's Office. This puts the borrower on notice that he or she is facing foreclosure and starts a reinstatement period that typically runs until five days before the home is auctioned off.
Notice Of Foreclosure
A notice of foreclosure must be served on all occupants and/or owners of the property being foreclosed upon at least four weeks before the foreclosure sale. If the home involved is a homestead property, then an eight weeks notice is mandated before the sale.
Duration Of The Foreclosure Process
The timing of the different required notices can varry. Overall, it generally takes 60-90 days to execute an uncontested non-judicial foreclosure. The process could be delayed if the borrower contests the action in court, files for bankruptcy, seeks delays or other adjournments of sales.
Minnesota Overview of Judicial And Non-Judicial Foreclosure
National Mortgage Settlement Helps Foreclosure Review Process Timeline and Deadlines
Minnesota is a “Title” Theory State.
Meaning that the main vehicle used to secure a Minnesota property is a Trust Deed. A trust deed ensures that the property remains in trust until the time matures the underlying loan and the lender is paid in full. Only after this is the title transferred to the owner. Therefore, trust deeds contain a power of sale clause, giving the trustee the rights to repossess the property if the owner should be delinquent with their loan repayments. If this is the case a non-judicial foreclosure takes place. To date, these have run approximately 60 days if not contested. Minnesota law state that the notice of foreclosure has to be personally served on the borrower at least four weeks prior to the date of the sale of the property.
Judicial Foreclosure Proceedings
Minnesota laws give lenders the right to go to court in what is known as a judicial foreclosure proceeding. This means that the court must issue a final judgment of foreclosure, and is called a "foreclosure by action". The property is then sold as part of a publicly noticed sale by your local sheriff's office. A complaint must be filed in court along with an "alis pendens". A recorded document, called "lis pendens", that provides public notice that the property is being foreclosed upon is recorded.
Duties Of The Mortgage Servicer Prior To Foreclosure
Counsel and assist you, the homeowner, to overcome delinquencies if you miss loan payments. For instance, a forbearance, or deferral of principal and interest payments, may be extended to help you out of financial difficulties. If the loan becomes seriously in default, foreclosure might be necessary to protect the investor's interest in the property and salvage the borrower's equity, if any.
What If I Have A Junior Lien And Face A Minnesota Foreclosure?
On completion of a foreclosure the lender has rights to pursue a deficiency judgment and the borrower has rights of redemption. Any redemption action on the part of the borrower will nullify the sale of the property, however, junior liens held by the lender will be revived and may alter or limit the borrower's options. The home owner has a period of between 6 and 12 months to institute this action.
|Day 1-17||Day 17-39||Day 45-90|
|Receive file, order title report, and send debt validation notice; Draft Power of Attorney and forward to client.||Prepare Notice of Sale; Publication commences - six weeks.||Deadline for Service of Notice of Sale; Sheriff issues Certificate of Sale.|
Important Things To Do If In A Minnesota Foreclosure
Do not ignore the letters from your lender. If you're having problems making your payments, call or write to your lender's Loss Mitigation Department without delay. Explain your situation. Be prepared to provide them with financial information, such as your monthly income and expenses. Without this information, they may not be able to help.
Stay in your home for now. You may not qualify for assistance if you abandon your property.
Take action. Ask for help immediately. Delays only reduce your options. Your mortgage company is typically your first source for help and information.
NOTE: IMPORTANT GOVERNMENT DISCLOSURE: The brokerage is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.
This entry was posted on Monday, April 2nd, 2012 and is filed under Real Estate Articles from Jenna Thuening.
Jenna Thuening Certified Distressed Property Expert on helping homeowners understand the Minnesota foreclosure timeline
Eden Prairie MN 55334
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