| Minnesota allows for both judicial or in court and | | | | description of the property and the date of the |
| non judicial or out of court foreclosures. As with | | | | scheduled sale. The time and place of the sale |
| all states where both forms of foreclosure are | | | | must be in the notice of sale as well. |
| followed, the determining factor as to which one | | | | A power of attorney and a notice of pendency |
| the bank will use is whether or not the deed of | | | | must be filed with the county in which the |
| trust or mortgage contains a power of sale | | | | property is located, before a non judicial |
| clause. The Power of sale clause is what allows a | | | | foreclosure can proceed. The notice of sale must |
| bank to skip over the step of filing a lawsuit | | | | be advertised in a paper with circulation in the |
| against the homeowner who is having difficulty in | | | | county where the home is located, for 6 weeks. |
| making his payments. The power of sale clause | | | | This same notice of sale must be served upon |
| saves the bank both time and money. Since it is | | | | the homeowner/occupants of the property. This |
| in the banks best interest to spend less on this | | | | must be done no less than four weeks before |
| process and move as quickly to the sale of the | | | | the scheduled sale. |
| home as possible, non-judicial foreclosure is always | | | | The sheriff of the county in which the property is |
| the banks first choice of process when they can | | | | located is required to conduct the sale. The home |
| do it. | | | | will be sold to the person who is placing the |
| The only reason that a bank would not choose to | | | | highest bid at the sale. This highest bidder will |
| use the non-judicial foreclosure process is when | | | | receive a certificate of sale. |
| there is no power of sale clause in the deed of | | | | The bank may seek a deficiency judgment from |
| trust or mortgage. When no power of sale clause | | | | the person who lost the home to the sheriff's |
| exists in court or judicial process is the only | | | | sale. This means that if the bank feels that if the |
| avenue open to the bank. Most deeds of trust or | | | | amount of money generated by the auction is |
| mortgages do contain a power of sale clause, so | | | | insufficient they can try to get more money from |
| most foreclosures are done out of court. | | | | the former homeowner. In Minnesota the bank is |
| Sometimes the power of sale clause is so detailed | | | | limited in how much money they can seek |
| in its instructions as to how the sale is to proceed | | | | through a deficiency judgment. They can only |
| that it will state the date and terms and place | | | | attempt to obtain the difference between what |
| where the sale is to take place. When this is the | | | | the house sold for and what fair market value for |
| case, these instructions must be followed. Most | | | | the home is. Most banks understand that a person |
| power of sale clauses are not so specific | | | | who has lost their home to such a sale, most |
| however, and that means that most foreclosures | | | | likely has no other assets worth going after. So |
| follow the regular process. | | | | deficiency judgments are rarely sought. The bank |
| In Judicial foreclosure, once the bank has received | | | | does not want to waste time and resources |
| a court order to foreclose the rest of the | | | | pursuing a course that will not generate any |
| process leading up to the sale of the property is | | | | money. |
| done the same way as an out of court | | | | However, if the bank believes that the former |
| foreclosure. There are three conditions that must | | | | homeowner does have other property or |
| be met in this state before a foreclosure sale can | | | | resources that have enough monetary value to |
| be scheduled. | | | | make pursuing a deficiency judgment likely to |
| First of all, no lawsuit to collect on the mortgage | | | | yield them the money they want, they will do all |
| can already be in process. Secondly, the | | | | they can to get that money. |
| mortgage or any assignments to new lenders | | | | The former homeowner in Minnesota has some |
| must have been recorded with the county. | | | | post auction rights connected to the property as |
| Thirdly, a notice of sale must be given eight | | | | well. In some instances the person who loses their |
| weeks prior to the foreclosure if it is a | | | | home to a foreclosure sale has up to one full year |
| homestead. | | | | following the sale of the home to regain |
| If all of these conditions will be met, then the | | | | ownership of the house. In most cases six |
| next step is that a notice of sale must be | | | | months is the time frame for this right of |
| recorded in the county where the property is | | | | redemption. The only required amount of money |
| located. This notice of sale must contain the | | | | necessary to do this is the past due amount of |
| homeowner's name, the lender's name, the original | | | | the loan plus costs and fees, taxes, insurance and |
| loan amount, the current amount of the default, | | | | property preservation. |
| the date the mortgage was entered into, a | | | | |