Foreclosure
The legal process by which a lender takes ownership of a property when the borrower fails to make mortgage payments.
Foreclosure is the legal process a lender uses to take back a property when the homeowner stops making mortgage payments. In Minnesota, most foreclosures are done “by advertisement,” which means the lender publishes a notice in a local newspaper and holds a sheriff’s sale where the property is sold. Minnesota law gives homeowners a redemption period after the sale — typically six months — during which they can buy back the property by paying the full amount owed.
Minnesota law provides some protections for homeowners facing foreclosure. Lenders must give notice before starting the process, and homeowners have the right to request a foreclosure prevention meeting with a HUD-approved housing counselor before the sale can proceed. There are also programs that may help homeowners catch up on payments or modify their loan terms.
Why it matters: Foreclosure can result in losing your home and damage your credit for years. If you are falling behind on mortgage payments, acting early — by contacting your lender, seeking housing counseling, or exploring legal options — gives you the best chance of keeping your home or minimizing the financial damage.
Example: After losing a job, a homeowner falls six months behind on mortgage payments. The bank starts foreclosure proceedings and publishes a notice in the newspaper. The homeowner contacts a HUD-approved housing counselor, who helps them negotiate a loan modification with the bank, stopping the foreclosure.
Missed mortgage payments, notices from banks, sheriff's sales, homeowner assistance programs