When we use the word “foreclosure” we are usually talking about a the foreclosure of a mortgage.
A mortgage is a document giving a lien on a piece of rel estate to secure the repayment of a loan.
Most mortgages in Minnesota are foreclosed by advertisement. (There is an alternate method of foreclosure, not usually used). When the person who gives the mortgage (called a “mortgagor”) fails to pay on time, or otherwise defaults, the mortgage company will send a notice of default.
The notice will give you a deadline to get current. If you do not do so, the mortgage company, through its attorneys, will publish a notice once a week for six weeks in a legal newspaper. The notice will be served on the occupant of the property. After the publication the property will be subject to a sheriff’s sale.
At the sale the deputy will offer the property for sale at an auction; typically only the mortgage company will bid and will win the auction. That starts a six month “period of redemption”. During that six months “all” the mortgagor has to do is to pay the amount that the mortgage company bid at the sheriff’s sale, plus running interest and expenses paid, such as taxes and insurance. (In real life this usually means the mortgagor has to sell the property.)
If the mortgagor does not pay during that six months, creditors with a lien on the property can pay the redemption amount. If no one pays the mortgage company, it becomes the owner of the property and then will list it for sale. The mortgagor loses the property, will likely be forced to move out, loses all their investment and monthly payments and any equity in the property.
One important date is the date scheduled for the foreclosure sale. If we act before the sheriff’s sale there are several steps we can take to try to save the property.
There are all sorts of wrinkles and exceptions to what I just said; if you are behind on your mortgage payments feel free to call me at 320-252-4473.
