May 9, 2023
If you are a homeowner in Minnesota, it is crucial to understand the process of foreclosure, the reasons why it happens, and what your options are if you are facing foreclosure. Foreclosure is a legal process that allows a lender to take ownership of a property if the borrower defaults on their mortgage. It is a serious matter that can have long-term consequences for your financial well-being and credit score. In this blog post, we will provide an overview of foreclosure in Minnesota and what you need to know if you are facing foreclosure.
But first, here are some recent foreclosure statistics in Minnesota:
• The foreclosure rate in Minnesota was 0.05% in March 2023, which is lower than the national average of 0.10%.
• There were 451 foreclosures filed in Minnesota in March 2023, an increase of 15% from the previous month.
• The majority of foreclosures in Minnesota are for single-family homes.
• The counties with the highest foreclosure rates in Minnesota are:
1. Wright County (0.14%)
2. Dodge County (0.13%)
3. Sherburne County (0.12%)
4. Carver County (0.11%)
5. Scott County (0.10%)
What is Foreclosure?
Foreclosure is a legal process that allows a lender to take ownership of a property if the borrower defaults on their mortgage. In Minnesota, the foreclosure process is governed by the Minnesota Statutes, Chapter 580. The process typically begins when the lender sends the borrower a notice of default. This notice gives the borrower a certain amount of time to cure the default, which means to bring their mortgage current. If the borrower does not cure the default within the specified time, the lender can file a foreclosure lawsuit against the borrower.
The court will issue a foreclosure decree if the lender wins the foreclosure lawsuit. This decree gives the lender the right to sell the property at a foreclosure sale. The lender will then hold a foreclosure sale, where anyone can bid on the property. The highest bidder at the foreclosure sale will become the property’s new owner.
What are the Causes of Foreclosure?
There are many reasons why a borrower might default on their mortgage. The most common causes of foreclosure include a job or income loss, medical expenses, divorce or separation, natural disasters, increased interest rates, and negative equity.
It is important to note that foreclosure sometimes results from a borrower’s financial mismanagement or irresponsibility. In addition, unexpected events, such as job loss or a medical emergency, can cause financial hardship and make it challenging to keep up with mortgage payments.
What are the Rights of Borrowers in Foreclosure?
Borrowers who are facing foreclosure have certain rights. These rights include the right to receive a notice of default, the right to cure the default, the right to be represented by an attorney in court, and the right to redeem the property after the foreclosure sale.
It is essential for borrowers to be aware of their rights and to take advantage of them if they are facing foreclosure. Working with an attorney or housing counselor can help protect your rights throughout the foreclosure process.
What are the Options for Borrowers Facing Foreclosure?
There are several options available to borrowers who are facing foreclosure. These options include:
Modifying The Mortgage
Borrowers may be able to modify their mortgage to make the payments more affordable. A mortgage modification can involve reducing the interest rate, extending the loan term, or forgiving a portion of the principal.
Getting A Forbearance
A forbearance is a temporary suspension of mortgage payments that can be a good option for borrowers experiencing temporary financial hardship, such as a job loss or medical emergency.
Short Sale
A short sale is a property sale for less than the amount owed on the mortgage. A short sale can be a good option for borrowers who owe more on their mortgage than their property is worth.
Deed-in-lieu Of Foreclosure
A deed-in-lieu of foreclosure is a voluntary transfer of property ownership to the lender instead of foreclosure. Therefore, it can be a good option for borrowers who cannot make their mortgage payments and want to avoid foreclosure.
It is crucial for borrowers to explore all of their options and to work with their lender or a housing counselor to find the best solution for their situation.
What are the Resources Available to Borrowers Facing Foreclosure?
1. The Minnesota Foreclosure Prevention Project: This project provides information and resources to help homeowners avoid foreclosure. It is a joint effort of several non-profit organizations, including the Minnesota Homeownership Center, the Legal Services Advocacy Project, and the Volunteer Lawyers Network. The Minnesota Foreclosure Prevention Project offers free counseling, legal assistance, and other resources to homeowners facing foreclosure.
2. The National Foreclosure Hotline: The National Foreclosure Hotline provides free and confidential counseling to homeowners facing foreclosure. The hotline is open 24/7 and can be reached at 1-888-995-HOPE (4673).
3. The United States Department of Housing and Urban Development (HUD): HUD provides many resources to help homeowners avoid foreclosure, including counseling and loan modification programs. HUD-approved housing counselors can provide free assistance to homeowners facing foreclosure. To find a HUD-approved housing counselor near you, visit the HUD website.
4. Legal Aid: If you are facing foreclosure and cannot afford an attorney, you can get free legal assistance through a legal aid organization. Legal aid organizations provide free legal services to low-income individuals and families. To find a legal aid organization near you, visit the Legal Services Corporation website.
5. State and Local Resources: Many states and local governments offer resources to homeowners facing foreclosure. These resources may include counseling, financial assistance, and legal assistance. Contact your state or local housing agency to find out what resources are available in your area.
It is important to remember that resources are available to help you if you are facing foreclosure. Don’t be afraid to reach out for help. The sooner you take action, the more options you will have to avoid foreclosure.
Additionally, borrowers facing foreclosure should be aware of scams and fraudulent companies offering a fee for foreclosure assistance. These companies often promise to save homeowners from foreclosure. These scam artists may offer to help the borrower avoid foreclosure. Still, they are only interested in taking the borrower’s money. They do little to help and can make the situation worse. Borrowers should be cautious of these scams and only work with reputable organizations and professionals.
Foreclosure is a serious matter that can have long-lasting consequences for borrowers and lenders. Borrowers facing foreclosure in Minnesota should know their rights and options and the available resources for assistance. It is vital to take action as soon as possible to avoid foreclosure and to contact a housing counselor or attorney for guidance. By doing so, borrowers can increase their chances of finding a solution that works for them and their lenders.
If you are facing foreclosure, TWINCITIES.REALESTATE is here to help you. Our team of experienced real estate professionals can provide you with the information and resources you need to understand your rights and options. Visit our website today to learn how we can help you avoid foreclosure and keep your home. So please take action now, and let us help you get back on track. Contact Us today!
Jerry Arguello
612-250-6287
