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Minnesota Judicial Foreclosure Available: Yes Non-judicial Foreclosure Available: Yes Minnesota allows foreclosure in two ways: by
advertisement and by court action. If court action is selected, the lender
must file a lawsuit and obtain a judgment for the amount due and a court
order commanding the property to be sold. Prior to attempting any
foreclosure, the lender should give at least 30 days' notice of the existence
of a default. For agricultural property, complex mandatory mediation
procedures must be followed. Non-judicial Sale by Advertisement If the mortgage contains a power of sale clause,
it may be foreclosed by advertisement. However, a number of conditions must
be met before sale by advertisement can be undertaken. There must be a default on the mortgage, no lawsuit to collect on the mortgage may be
underway, the mortgage itself and any assignments of the
mortgage to new lenders must have been recorded and the notice must be given eight weeks before
foreclosure on a homestead. If an attorney is involved in the foreclosure, the
attorney's authority must be shown by a power of attorney that has been
properly recorded. Attorney's fees are set by statute for foreclosure sales.
Hence, the borrower cannot be billed indiscriminately for attorney's fees
during the foreclosure process. Certificate of Sale After the sale, the sheriff will prepare a
certificate showing the amount of the sale and the amount left unpaid on the
loan. Special Procedure - Right of First Refusal Borrowers have a complex right of first refusal
when land is acquired by a state agency, a federal agency, a limited
partnership or a corporation (other than a family farm corporation). Once the
agency or business acquires land by foreclosure, it will ultimately try to
resell it. When it tries to resell, the old owner who lost the property in
foreclosure must be offered the property in preference to any other purchaser
at the price and terms an outside buyer is willing to accept for the
property. The lender must make a good-faith effort to let the old owner buy
it first, hence the term right of first refusal. The law applies for the
first five years after the property was foreclosed on. The right of first
refusal may not be waived or assigned, except to family members by
inheritance. Deficiency Any deficiency is limited to the difference
between the fair market value of the property, as determined by a jury, and
the unpaid balance remaining on the old loan. To recover a deficiency
judgment against the borrower, the lender must file a lawsuit against the
borrower. If the lender already seeks foreclosure by a lawsuit, then all the
lender has to do is add a claim to the existing lawsuit. However, when the
foreclosure is by advertisement, then an independent lawsuit must be filed to
recover a deficiency. Redemption Redemption is unusual in Minnesota. The borrower
or a junior lien holder has up to one year after the foreclosure to redeem
the property by making all the past due payments rather than the entire loan
balance after acceleration. Preliminary Notices Contents The foreclosure notice must name the borrower the
original lender, any takeover lender, the original loan amount, the date of
the mortgage, recording information, the amount currently due on the loan
including back taxes and unpaid insurance, a property description, the time
and place of the impending foreclosure sale and the time allowed by law for
the borrower to redeem the property. Sale Procedures Documentation Before the sale, the lender must file a verified,
itemized statement with the sheriff showing the amount due. This statement
must be read during the sale by the sheriff. Time and Place The time, place and date of the foreclosure are
set forth in the foreclosure notice. Manner In Minnesota, the actual foreclosure sale must be
conducted by public auction. The sale is to the highest bidder. |
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