Minnesota Foreclosure Laws

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Judicial Foreclosure Available:	Yes
Non-Judicial Foreclosure Available:	Yes
Primary Security Instruments:	Deed of Trust, Mortgage
Timeline:	Typically 60 days
Right of Redemption:	Yes
Deficiency Judgments Allowed:	Yes

In Minnesota, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure

Judicial Foreclosure involves the sale of the mortgaged property under the supervision of a court. The property is subject to auction by the county sheriff or some other officer of the court. The proceeds first go to the lender to satisfy the mortgage; then other lien holders; and, finally, to the borrower if any proceeds are left. All parties must be notified of the foreclosure. A judicial decision is announced after pleadings at a hearing in a state or local court.

Non-Judicial Foreclosure (Power of Sale)

Also known as Foreclosure by power of sale, Non-Judicial Foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. This process involves the sale of the property by the mortgage holder without court supervision. It is generally more expedient than foreclosure by judicial sale. As in judicial sale, the mortgage holder and other lien holders are respectively first and second claimants to the proceeds from the sale.

Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. However, in Minnesota, a non-judicial foreclosure may only occur if: 1) no lawsuit to collect the on the mortgage is already underway; 2) the mortgage and any assignments of the mortgage to new lenders have been recorded; and 3) a notice has been given eight (8) weeks before the foreclosure on a homestead.

If all of these conditions have been met, then the foreclosure may proceed as follows:

1. A notice of sale, containing the borrower and lender(s) name, the original loan amount and current amount of default, the date of the mortgage, a description of the property and the time, place and date of the foreclosure sale, must be recorded in the county where the property resides.


2. The sheriff of the county in which the property is located must conduct the sale on the date specified in the notice of sale. At some point during the sale, the sheriff must read an itemized statement, which has been filed by the lender, of the amount due at the time of the sale. The property is sold to the highest bidder, who will receive certificate of sale.


3. Lenders may pursue a deficiency judgment, but it is limited to the amount of the fair marker value of the property and the unpaid balance of the original loan. Borrowers have up to one (1) year to redeem the property by paying the past due amount on the loan.

United States Foreclosure Law