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 Zimmerman, 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 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 Zimmerman, Minnesota to find out if this is the case here. This typically 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. You should keep in mind that banks typically don't want to take your Zimmerman 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 prevent you from defaulting.
If you can't reach a solution with your lender, there are other options. You can, for example, try a "short sale," which allows you to sell your house for whatever amount you can get, and use the proceeds to pay your mortgage. If the house sells for less than you owe, the bank will receive the proceeds of the sale, and the rest of the debt will be forgiven. 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 Zimmerman, Minnesota Attorney Help?
If you are worried about foreclosure, a good Zimmerman, Minnesota real estate attorney may be able to help. An attorney can increase your chances of keeping your home, and help minimize the financial impact if keeping it proves impossible.