Foreclosure Law in Minnesota
In Apple Valley, Minnesota, foreclosure is a process through which a lender that issued a mortgage loan retakes possession of the property that was purchased with the mortgage in the event that the borrower has defaulted on his or her payments.
If an ordinary consumer faces foreclosure, it normally involves a home that was purchased with a mortgage from a bank. The bank will normally try to sell the house at a public option, with the hope of at least covering the remaining debt, to avoid taking a large loss.
In every state, including Minnesota, homeowners have the option to go through what is known as a foreclosure by judicial sale. Basically, this means a court will oversee the sale of the house to ensure that the bank makes reasonable efforts to sell it for as high a price as possible (to help avoid a deficiency that the borrower may have to pay), and to ensure that any money which might be left over from the sale (after the balance on the mortgage is paid) goes to the borrower.
In some states, original mortgages are recognized as "non-recourse" loans, making the above problem a non-issue. This basically means that once the mortgaged property is sold by the lender, the debt is discharged, even if the sale nets less than the remaining balance on the mortgage. The borrower will simply have to write this off as a loss. However, this usually does not apply to refinanced or second mortgages.
How to Possibly Avoid Foreclosure in Apple Valley, Minnesota
To avoid foreclosure, communicating with your lender is key. Let's face it - if you're in a situation where foreclosure looks like a possibility, your life is not going to be easy for some time. While it's difficult to step up and acknowledge unpleasant facts, doing so will make your life much easier in the long run. If your lender is aware of your situation, it's far more likely that you'll be able to work something out with them.
You should remember that the bank doesn't really want your house. They approved a mortgage hoping to make a profit from interest, and that's what they'd much rather do. They aren't in the business of buying and managing real estate. Therefore, banks will sometimes go to surprising lengths to accommodate your financial hardship, especially if it's temporary.
If you face sudden expenses, such as medical bills or a lawsuit, which put a serious but relatively short-term strain on your finances, you should notify your lender immediately. You might find that they are willing to accept lower payments, if this will prevent you from defaulting.
As a last resort, some borrowers consider a "short sale." In a short sale, the homeowner sells the house to the highest bidder, and uses the proceeds to pay off the remaining debt. If there is any extra from the sale, it goes to the borrower. If the sale price is worth less than what's left of the mortgage in Minnesota, the remaining debt is absolved.
Can a Apple Valley, Minnesota real estate attorney help?
If you are facing foreclosure in Apple Valley, Minnesota, and want to do everything practicable to save your house, the assistance of a brilliant real estate lawyer might prove invaluable.