1 A borrower's right to reacquire property lost due to a foreclosure.
2 A personal judgment against the borrower for the remaining balance on the loan after a foreclosure sale.
Minnesota foreclosure law details
Lenders in the state of Minnesota may foreclose on a deed of trust or mortgage in default using either a judicial or non-judicial foreclosure process. Foreclosure is either by court action or by advertisement.
Judicial Foreclosure
The judicial process of foreclosure in Minnesota requires that a lawsuit be filed by the lender and that the lender obtain a judgment for the amount owing and a court order requiring that the property be sold. Before attempting any foreclosure, the lender is required to give at least thirty (30) days notice of the default. Complex mandatory mediation procedures are followed in situations involving agricultural property.
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 basically states that in the event the loan is defaulted, the borrower pre-authorizes the sale of property to pay off the balance on a loan. The lender or their representative is given the authority to sell the property. The procedure for this type of foreclosure process is explained in the Power of Sale Foreclosure Procedure listed below.
Power of Sale Foreclosure Procedure
If the mortgage contains a power of sale clause, Minnesota allows for the property to be foreclosed by advertisement, if the following conditions are met:
- The mortgage is in default,
- No lawsuit to collect on the mortgage is underway,
- The mortgage and any assignments of the mortgage to new lenders have been recorded and notice given eight (8) weeks prior to the foreclosure.
Deficiency judgments filed by the lender are allowed, but limited to the amount of the fair market value of the property and the remaining unpaid balance on the original loan after the sale of the property.
While unusual in the state of Minnesota, borrowers do have up to one (1) year to redeem the property by paying the past due amount on the loan instead of the entire loan balance after acceleration.