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 White Bear Lake, Minnesota has consistently failed to make their payments. When a house is foreclosed, it is normally sold at auction shortly thereafter. This is because banks normally 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 U.S., including Minnesota, foreclosure by judicial sale is allowed. Under this system, the sale is overseen by a court of law, to ensure that the bank makes a good effort to get a reasonable price at the auction, and that any proceeds above the balance of the mortgage go back to the borrower. In some states, original mortgages are treated as "non-recourse" loans, meaning that, at most, the lender can take possession of the house in the event of foreclosure, even if it is worth less than the amount due. The bank cannot go after the borrower for the remaining balance once it sells the house. You should consult an attorney in White Bear Lake, Minnesota to find out if this is the case here. This normally does not apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in Minnesota?
First, you should never dismiss the matter. As unpleasant as it seems, it is necessary to stay on top of the issue. Ignoring the problem will never make it go away. It is crucial to remember that the bank does not really want your White Bear Lake house - they expected to make a profit through the interest on your loan, and that's what they'd prefer to do. Accordingly, they will probably make reasonable accommodations to your financial situation if it means that you will be able to make some form of payment to them.
If you can't work anything out with your lender, or have become totally unable to make any mortgage payments, a "short sale" might be a good option. This allows you to sell your house for whatever price it can get, and hand the proceeds over to the lender. If the sale price is less than the balance of the loan, the rest of the debt may be forgiven. You may also consider a "short refinance" which allows a portion of the debt to be forgiven, while refinancing the rest, hopefully under better terms.
How Can A White Bear Lake, Minnesota Attorney Help?
If you are facing foreclosure, a good White Bear Lake, Minnesota real estate lawyer can help. While keeping your home might not always be possible, an attorney can increase your odds of success, and help you minimize the negative impact if you do end up losing your home.