Minnesota Foreclosure Laws

In Minnesota, both judicial and non-judicial foreclosure proceedings are used, although most foreclosures are non-judicial. Not including the redemption period, most foreclosures in the state take about four months.

Pre-Foreclosure

A lender begins the foreclosure process when he or she officially informs the debtor (in writing) of default. At this point, the home is in pre-foreclosure. Once the debtor has been notified, the lender files an action in court against the debtor, if the lender is pursuing a judicial foreclosure. The court rules on the case and if the court rules for the lender, the auction of the property is scheduled.

Most Minnesota mortgages have a power of sale clause in them that permits the lender to seek foreclosure in the event of a default - without going to court. If a mortgage has such a clause, a no-judicial foreclosure procedure is used. In most such mortgage clauses, there is a requirement that the lender must mail or serve a default notice to a homeowner before deciding on the date of the foreclosure auction.

Whether a foreclosure is in-court or out-of-court, a debtor can stop the foreclosure during the pre-foreclosure stage (which lasts until the foreclosure auction) by paying the default amount as well as any accumulated costs.

Notice of Auction

Before a foreclosure auction can be held, a notice of auction (also sometimes called a notice of sale) must be published. This notice needs to list the names of the lender and debtor, the name of the property owner (if different from the debtor), the mortgage date, the loan amount, the default amount, a description of the property, the redemption period, and the time and place of the foreclosure auction. In Minnesota, this notice must be given in person to the residents living of the property at least one month before the auction. The notice must also be published in a local newspaper for six weeks. If the sale is postponed, a notice of the postponement must run in the same newspaper where the original notice of auction was printed.

The foreclosure sale itself usually takes place between 9:00am and sundown in the sheriff's office or another public place. The sheriff's deputy or the sheriff usually oversee the auction, which is open to anyone. If the winning bidder is not the lender, the bidder must pay the full bid amount upfront, by cashier's check or cash. Once this happens, the winning bidder is given a certificate of sale. Some property in Minnesota offers a one year redemption period after the auction date, but most debtors are given a six month redemption period.