Homeowners Can Postpone Forced Sales In Minnesota Foreclosures

On June 15 of last year the State of Minnesota changed the Minnesota foreclosures laws. These changes are meant to combat the snowball effect of lowered property values that occurs in a neighborhood when a home owner is forced to walk away from his or her home, leaving it in the hands of the mortgage holder. The new regulations affect homeowners, lenders and municipal governments.

The new regulations give homeowners facing a Minnesota foreclosure the chance to postpone a forced sale date by five months. Previously, the choice to postpone a sale was only available to the lender. The intention behind the change is to give laid-off workers who have fallen behind in their mortgage payments additional time to find new employment and, hopefully, get their mortgage up to date.

Postponing the sale date is only a viable solution if a homeowner has a reasonable belief that they can increase their income, i. E., find employment, and catch up on what is owed. The alternative is to allow the sale and either come up with the balance due on the post-sale mortgage amount within six months or be forced into bankruptcy. Given the recession, the later is more likely than the former.

The criteria to qualify for and secure a forced sale date postponement are relatively easy to meet. The option is only applicable to homestead residences. Under law, only one homestead residence is permitted per resident. The homestead property can have from one to four units and must be the owners primary residence.

To take advantage of the postponement option, homeowners must have been served with a forced sale date. Once served the homeowner must complete an Affidavit of Postponement and file it with the relevant county clerks office and the office of the sheriff who is to conduct the auction sale. A copy must also be provided to the lawyer handing the foreclosure for the lender. These steps must be completed no later than 15 days before the forced sale date.

Under Minnesota foreclosures law, a homeowner whose residence has been sold in a forced sale has a six month redemption period. If the balance owing on the mortgage after the sale has not been paid in full by the end of the redemption period the mortgage holder may force the mortgagee into personal bankruptcy. Under the new regulations, the redemption period allowed for homeowners is shortened in the extreme.

Under the terms of the new statute, homeowners who are successful in postponing a forced sale date but are unsuccessful in bringing the mortgage current within the 5 month postponement period have their redemption period reduced from five months to five weeks. This is a comfort to lenders because it means the Minnesota foreclosures process is not lengthened the time it takes for the process to be completed.

There are no second chances when it comes to Minnesota foreclosures laws. One per customer. This is as true for those who successfully get their mortgage current within the 5 month period as it is for those who fail to do so. Even if a homeowner uses a postponement to get back on their feet and up to date with their payments, and even if they keep those payments current for years, they can never ask for a postponement of a forced sale again.

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