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Minnesota Foreclosure Law Summary
Quick Facts
- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed
of Trust, Mortgage
- Timeline: Typically 60 days
- Right of Redemption: Yes
- Deficiency Judgments Allowed: Yes
In Minnesota, lenders may foreclose on deeds of trusts
or mortgages in default using either a judicial or non-judicial
foreclosure process.
Judicial Foreclosure
The judicial process of foreclosure, which involves filing
a lawsuit to obtain a court order to foreclose, is used
when no power of sale is present in the mortgage or deed
of trust. Generally, after the court declares a foreclosure,
your home will be auctioned off to the highest bidder.
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when
a power of sale clause exists in a mortgage or deed of
trust. A "power of sale" clause is the clause
in a deed of trust or mortgage, in which the borrower
pre-authorizes the sale of property to pay off the balance
on a loan in the event of the their default. In deeds
of trust or mortgages where a power of sale exists, the
power given to the lender to sell the property may be
executed by the lender or their representative, typically
referred to as the trustee. Regulations for this type
of foreclosure process are outlined below in the "Power
of Sale Foreclosure Guidelines".
Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a power of
sale clause and specifies the time, place and terms of
sale, then the specified procedure must be followed. However,
in Minnesota, a non-judicial foreclosure may only occur
if: 1) no lawsuit to collect the on the mortgage is already
underway; 2) the mortgage and any assignments of the mortgage
to new lenders have been recorded; and 3) a notice has
been given eight (8) weeks before the foreclosure on a
homestead.
If all of these conditions have been met, then the foreclosure
may proceed as follows:
- A notice of sale, containing the borrower and lender(s)
name, the original loan amount and current amount of
default, the date of the mortgage, a description of
the property and the time, place and date of the foreclosure
sale, must be recorded in the county where the property
resides.
- The sheriff of the county in which the property is
located must conduct the sale on the date specified
in the notice of sale. At some point during the sale,
the sheriff must read an itemized statement, which has
been filed by the lender, of the amount due at the time
of the sale. The property is sold to the highest bidder,
who will receive certificate of sale.
- Lenders may pursue a deficiency judgment, but it is
limited to the amount of the fair marker value of the
property and the unpaid balance of the original loan.
Borrowers have up to one (1) year to redeem the property
by paying the past due amount on the loan.
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