Foreclosure is the process 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 Hastings, Minnesota has repeatedly failed to make their payments. When a house is foreclosed, it is usually sold at auction shortly thereafter. This is because banks usually want to get rid of the property as soon as possible, even if it means losing some money, and an auction is an easy 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 conducted 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 some states, original mortgages are treated as "non-recourse" loans, meaning that, at most, the lender can take ownership of the house in the event of foreclosure, even if it is worth less than the amount due. The bank cannot go after the debtor for the remaining balance once it sells the house. You should consult a lawyer in Hastings, Minnesota to find out if this is the case here. This usually does not apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in Minnesota?
Most importantly, you must not ignore the problem. Doing so will not make it go away, and will probably make it worse. You should stay in close contact with your bank, and be honest with them. You should keep in mind that banks usually don't want to take your Hastings home. They aren't in the real estate business, and expect to make money through interest on the loan, not by selling your house. If you are up-front with them early on, they will probably make a reasonable effort to accommodate your financial system if it will keep you from defaulting.
If you believe that foreclosure is imminent, there are some other options. For example, you might be able to engage in a "short sale," which sometimes allows you to sell your house for whatever amount you can get, 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 significant portion of your mortgage debt, and refinances the rest.
How Can A Hastings, Minnesota Attorney Help?
If you are facing the possibility of foreclosure, a good Hastings, Minnesota real estate attorney can help. At the very least, they will be able to inform you of your legal options.