Foreclosure is the procedure through which the lender in a mortgage takes ownership and/or possession of the property that secured the original loan. This happens when a debtor in Brooklyn Park, Minnesota has consistently failed to make their payments. When a house is foreclosed, it is typically sold at auction shortly thereafter. This is because banks typically want to get rid of the property as soon as possible, even if it means losing some money, and an auction is an simple way to do this.
In all states in the United States, including Minnesota, foreclosure by judicial sale is an option. This allows the sale to be done under the supervision of a court, to ensure that the bank makes a good faith effort to get a fair price, and that the proceeds above and beyond the balance of the mortgage (if there are any) go back to the debtor. In many states, original mortgages are considered non-recourse loans, meaning that if the house is foreclosed and sold for less than the borrower owes, the bank cannot go after the debtor for the remainder. You should consult with an lawyer in Brooklyn Park, Minnesota to see if this is the case. However, this typically doesn't apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in Minnesota?
First of all, you shouldn't dismiss the problem. You should stay in contact with your bank, and be forthright with them. Ignoring the issue will not make it go away. You should remember that banks in Brooklyn Park don't want your house. While the foreclosure process can be devastating for the homeowner, it's no walk in the park for the bank, either. They expected to make a profit through interest on the loan paid over time, and foreclosure is a last resort, allowing them to cut their losses and move on. If you are forthright with them, lenders will typically try to accommodate your changed financial situation, to avoid a default on your part, and the necessity of foreclosing on their part.
If you believe that foreclosure is imminent, there are some other avenues. For example, you may be able to engage in a "short sale," which sometimes allows you to sell your house for whatever amount you can receive, give the proceeds to the lender, and walk away free of your mortgage debt, even if the sale netted less than the balance of the mortgage. There is also the option of a "short refinance," which forgives a substantial portion of your mortgage debt, and refinances the rest.
How Can A Brooklyn Park, Minnesota Attorney Help?
If you think foreclosure is imminent, a good Brooklyn Park, Minnesota lawyer may be your best hope for staving it off. Even if keeping the house proves impossible, a good attorney can minimize the financial effects.