Foreclosure Law in Minnesota
In Delano, 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 typically involves a home that was purchased with a mortgage from a bank. The bank will typically 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 many states, mortgages fall into a category of loans identified as "non-recourse loans." This means that, if the house is sold by the lender, the entire debt is eliminated, even if the sale price was less than the remaining balance on the loan. While the loss of one's home can be personally devastating, treating a mortgage as a non-recourse loan at least means that the homeowner will be more or less free to move on with their life once the property is foreclosed and sold.
How to Possibly Avoid Foreclosure in Delano, Minnesota
It's quite important that you engage in continued communication with your bank. Lenders are surprisingly willing to make accommodations if it means they still get paid something, but in order to accommodate your situation, they have to know about it.
Throughout all this, you should remember one thing: the bank doesn't really want your house. After all, banks aren't real estate speculators, they're primarily money lenders. They stand to make a great deal of money if you are able to make your mortgage payments until it's paid off. They're likely to make much less if they're forced to sell your house.
If you experience a sudden change in your financial situation, your lender, in an effort to prevent you from defaulting, might be willing to accept lower monthly payments, at least temporarily.
As a last resort, you might consider a "short sale," which results in loss of the home, but it typically leads to a great deal of the debt on the mortgage being forgiven. Typically, a short sale in Minnesota involves selling the house for whatever price it can fetch. The proceeds from the sale go to the lender, and if it sells for less than what's left on the mortgage, the balance of the debt is forgiven.
Can a Delano, Minnesota real estate attorney help?
If you feel that your home is close to being foreclosed in Delano, Minnesota, and want to try to prevent this, the advice and assistance of an efficient real estate lawyer can mean the difference between keeping or losing your home.