Foreclosure Process Overview
Both in-court and out-of-court foreclosure proceedings are used in Minnesota. The ideal timeline for a Minnesota foreclosure is approximately four months, not including the redemption period.
In Minnesota, a court foreclosure begins when a lender notifies the borrower of the default. The lender then files a court action against the borrower. If the court rules against the borrower, a sale is scheduled.
The majority of Minnesota foreclosures are handled out of court through a power-of-sale clause contained in the mortgage. Under most mortgages, a lender must mail a default notice to the borrower before scheduling the sale.
With both types of foreclosure proceedings, the borrower can stop the foreclosure any time before the foreclosure sale by paying the default amount, plus fees and allowable costs.
Notice of Sale / Auction
The notice must include the borrower, owner, and lender names; the original loan amount; the mortgage date; recording information; the default amount due; a property description; the time and location of the sale; and the redemption period. The notice must be published for six weeks, and the occupants of the property must be given the notice in person at least four weeks prior to the sale.
The county sheriff or sheriff’s deputy conducts the foreclosure sale between 9:00 a.m. and sundown at a public place, usually the sheriff’s office. Anyone may bid at the sale, and the property is sold to the winning bidder. If not the lender, the winning bidder must be prepared to pay the full amount in cash or cashier’s check. The sheriff may postpone the sale by publishing a notice in the newspaper where the original notice of sale was published. After the sale, the sheriff gives a certificate of sale to the winning bidder. The certificate of sale effectively transfers ownership and possession rights to the winning bidder after the redemption period.
In Minnesota, a borrower usually has a six-month redemption period, but some property types and mortgages allow for a 12-month redemption period. During this time, the borrower can redeem the property by paying the total amount of the bid plus interest and any applicable costs.
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