State of Minnesota Foreclosure Law Summary

Which law provision governs foreclosure in Minnesota?
The laws which govern are found in Chapter 580.01 et. seq.(Mortgages, Foreclosure of Minnesota Statutes (2004).

What happens during Judicial Foreclosure in Minnesota?
It involves filing a law suite to obtain a court order. This is done when no power of sale is present in mortgage/deed. Once foreclosure is declared, property is auctioned off to highest bidder.

What happens during Non-Judicial Foreclosure in Minnesota?
Non-judicial foreclosure is conducted only when power of sale clause exists in deed of trust/mortgage. This clause allows borrower pre-authorizes the sale of property to pay off the balance loan in the incidence of their default. In such cases power is given to lender to sell the property by himself or his representative who generally referred as trustee. Guidelines for such procedure are mentioned under “Guidelines for power of sale foreclosure”.

Guidelines for power of sale foreclosure
If the deed of trust/mortgage contains a power of sale clause with specified time, place and terms of sale, then it should be followed.

To carry out Non-judicial foreclosure in Minnesota, following conditions should be fulfilled.
4.No lawsuit to collect the on the mortgage is already underway
5.mortgage and any assignments of the mortgage to new lenders have been recorded
6.a notice has been given eight (8) weeks before the foreclosure on a homestead

If all of these conditions are fulfilled then non-judicial foreclosure happens as follows:
The notice of sale should have name of the borrower, lender, original loan amount, current loan amount with default, date of mortgage, the description of the property, time, date and place of the sale. This notice should be recorded at the county office where property is located. The sale is conducted by the sheriff; he must read an itemized statement, which is filed by lender, of the amount due at the time of the sale. The highest bidder receives certificate of sale after winning. Lender can also go for deficiency judgment with a restriction to the amount of fair market value of the property and unpaid balance of the loan. The borrower gets one year of redemption period.

This is legal information; it should not be treated as legal advice.