Minnesota Foreclosure Laws and Procedures

Before the foreclosure crisis, federal and state laws regulating mortgage servicers and foreclosure procedures were relatively limited and tended to favor foreclosing lenders. However, many federal and state laws now better protect borrowers. Servicers must provide borrowers with loss mitigation opportunities, account for each foreclosure step, and carefully comply with foreclosure laws.

Also, most people who take out a loan to buy a residential property in Minnesota sign a promissory note and a mortgage. These documents usually give homeowners certain contractual rights after a home loan default.

So, don't get caught off guard if you're a homeowner behind in mortgage payments. Learn about Minnesota foreclosure laws and how the Minnesota foreclosure process works, from missing your first payment to a foreclosure sale.

What Are My Rights During Foreclosure in Minnesota?

In a Minnesota foreclosure, you'll most likely get the right to:

• get preforeclosure notices
• apply for loss mitigation (during the application period, federal law protects you from foreclosure)
• get notice of the foreclosure sale
• stop the foreclosure by paying off the overdue payments and bringing the loan current
• pay off the loan to prevent a sale
• file for bankruptcy
• redeem the property after the sale, and
• get any excess money after a foreclosure sale.

Probably the most important Minnesota foreclosure law providing rights to mortgage borrowers is the Minnesota Homeowner Bill of Rights.

Once you understand the Minnesota foreclosure process and your rights, you can make the most of your situation and, hopefully, work out a way to save your home or at least get through the process with as little anxiety as possible.

Minnesota Homeowner Bill of Rights: Key Foreclosure Protections

Minnesota's Homeowner Bill of Rights prohibits specific actions in foreclosures, like dual tracking, and requires servicers to assist borrowers in the loss mitigation process. This state law is similar to federal mortgage servicing laws, with some minor differences.

Loss Mitigation Requirements for Loan Servicers

The servicer must notify the borrower in writing of available loss mitigation options that the servicer offers before referring the mortgage loan to an attorney for foreclosure. (Minn. Stat. § 582.043 (2025).)

After the borrower requests a loan modification or other loss mitigation option, the loan servicer must:

• try to obtain documents and information from the borrower to complete a loss mitigation application
• give the borrower a reasonable amount of time to provide the required documents
• after receiving a complete application, evaluate the borrower for all available loss mitigation options before referring the loan to an attorney for foreclosure
• after reviewing the loss mitigation application, timely offer the borrower a loan modification if eligible or, if not, timely offer the borrower any other loss mitigation option for which the borrower is eligible, and
• comply with any applicable appeal period and procedures for the specific loss mitigation option. (Minn. Stat. § 582.043 (2025).)

Dual Tracking Ban Under Minnesota Foreclosure Law

In most cases, once the borrower submits a complete loss mitigation application, the foreclosure is stalled while the loan servicer reviews the application and makes a decision.

Minnesota foreclosure law says that if the servicer receives a borrower's loss mitigation application before midnight on the 7th business day before the foreclosure sale date, the foreclosure stops while the servicer evaluates the application. This provision is stricter than federal law, which requires the borrower to submit the application more than 37 days before the sale to get protection against foreclosure. (Minn. Stat. § 582.043 (2025).)

Even if the lender denies the loss mitigation, the servicer still can't foreclose until:

• the servicer informs the borrower of this determination in writing, and the applicable appeal period has expired without an appeal or the appeal has been properly denied
• the borrower fails to accept the loss mitigation offer within the time frame specified in the offer or within 14 days after the date of the offer, whichever is longer, or
• the borrower declines a loss mitigation offer in writing. (Minn. Stat. § 582.043 (2025).)

What Is a Complete Application Under Minnesota Law?

In the case of Wilson v. Wells Fargo Bank, N.A., No. 16-3213 (8th Cir. July 17, 2018), the borrower claimed that her submission of a Hardship Affidavit Form to the servicer constituted a complete loss mitigation application and that the servicer violated Minnesota's dual tracking statute by pursuing a foreclosure. The court disagreed and stated that the borrower understood she had to submit all requested documentation by the given deadline but failed to do so. As a result, the court said that the servicer had not violated the statute.

The bottom line is that you should send in all of the information and documents that the servicer requests by the provided deadline for your application to be considered complete.

Who Qualifies for Protections Under Minnesota's Homeowner Bill of Rights?

The protections under the Minnesota Homeowner Bill of Rights generally apply to first mortgage loans for properties that are:

• owner-occupied as the owner's principal residence
• residential, and
• have no more than four units.

Smaller servicers are exempt from the law, but they can't pursue a foreclosure if a borrower is in compliance with the terms of a loan modification or other loss mitigation agreement. (Minn. Stat. § 582.043 (2025).)

When Does Foreclosure Start in Minnesota?

Under federal law, the servicer usually can't officially begin a foreclosure until you're more than 120 days past due on payments, subject to a couple of exceptions. (12 C.F.R. § 1024.41 (2025).) This 120-day period provides most homeowners ample opportunity to submit a loss mitigation application to the servicer.

Judicial vs. Nonjudicial Foreclosure in Minnesota

If you default on your mortgage payments in Minnesota, the lender may foreclose using a judicial or nonjudicial method.

How Judicial Foreclosures Work

A judicial foreclosure begins when the lender files a lawsuit asking a court for an order allowing a foreclosure sale. The lender will automatically win the case if you don't respond with a written answer.

But if you choose to defend the foreclosure lawsuit, the court will review the evidence and determine the winner. If the lender wins, the judge will enter a judgment and order your home sold.

How Nonjudicial Foreclosures Work

If the lender chooses a nonjudicial foreclosure, it must complete the out-of-court procedures described in the state statutes. After completing the required steps, the lender can sell the home at a foreclosure sale.

Most lenders opt for the nonjudicial process because it's quicker and cheaper than litigating the matter in court.

Which Is the Most Common Foreclosure Process in Minnesota?

Again, most residential foreclosures in Minnesota are nonjudicial. Here's how the Minnesota nonjudicial foreclosure process works.

Required Preforeclosure Notices in Minnesota

In most cases, the lender has to mail the borrower a notice of default before officially starting a foreclosure. The notice must provide the borrower with 30 days to cure the default. (Minn. Stat. § 47.20 (2025).)

Typically, along with the notice of default, Minnesota law requires the lender to provide notice that foreclosure prevention counseling services are available and that the homeowner's contact information will be sent to an approved foreclosure prevention agency. This law applies to properties consisting of one- to four-family dwelling units, one of which the owner occupies as the owner's principal place of residency. (Minn. Stat. § 580.021, § 580.022 (2025).)

Minnesota Foreclosure Timeline and Process

The lender begins the foreclosure by filing a notice of the pendency with the county recorder's office. (Minn. Stat. § 580.032 (2025).) After filing the notice of pendency, a notice of sale is published in a newspaper for six weeks before the sale. The lender must also serve a notice of sale to you (the home's occupant) four weeks before the sale. (Minn. Stat. § 580.03 (2025).)

Another notice, a redemption rights notice, contains information about the homeowner's right to redeem the property (see below) and other rights after the sale. (Minn. Stat. § 580.041 (2025).) In addition, the lender also must provide an advice notice, which includes information about how the borrower can get help avoiding foreclosure. (Minn. Stat. § 580.041 (2025).)

Can You Postpone a Foreclosure Sale in Minnesota?

Under Minnesota law, if the property is classified as a homestead, is occupied by the owner as a homestead, and contains one to four dwelling units, the borrower or homeowner can choose to postpone the foreclosure sale. But the trade-off is a reduced redemption period (see below) of five weeks. (Minn. Stat. § 580.07 (2025).)

To get a postponement, you have to complete a series of steps, including:

• executing and recording a sworn affidavit
• filing a copy with the sheriff who's conducting the sale, and
• delivering a copy to the lender's attorney. (The copies must show the recording date and county recorder's office in which the affidavit was recorded.)

You must do all this after the notice of foreclosure sale is published, but at least 15 days before the scheduled sale date specified in that notice. Depending on the circumstances, the postponement will be for five months (if your redemption period is 6 months) or 11 months (if your redemption period is 12 months). (Minn. Stat. § 580.07 (2025).)

Foreclosure Auctions in Minnesota

At the sale, the lender usually makes a credit bid. The lender can bid up to the total amount owed, including fees and costs, or it may bid less. Sometimes, depending on state law, when the lender is the high bidder at the sale but bids less than the total debt, it can get a deficiency judgment against the borrower. Other times, state law prohibits a deficiency judgment (see below).

If the lender is the highest bidder, the property becomes "real estate owned" (REO). But if a bidder, say a third party, is the highest bidder and offers more than you owe, and the sale results in excess proceeds—that is, money over and above what's needed to pay off all the liens on your property—you're entitled to that surplus money.

How Long Can You Stay After Foreclosure in Minnesota?

After the redemption period ends, the new owner may file an eviction lawsuit against you (the former owner). (Minn. Stat. § 504B.285 (2025).)

Ways to Stop Foreclosure in Minnesota

A few potential ways to stop a foreclosure and keep your home include reinstating the loan, applying for loss mitigation, or filing for bankruptcy.

Loss Mitigation Options

Working out a loss mitigation option, like a loan modification, forbearance plan, or repayment agreement, will stop a foreclosure and allow you to keep your home. Or you might be able to work out a short sale or deed in lieu of foreclosure and avoid foreclosure. But you'll have to give up your home with a short sale or deed in lieu of foreclosure transaction.

Reinstating a Mortgage Can Prevent Foreclosure

Minnesota law permits a borrower to reinstate a defaulted loan at any time before the sale. (Minn. Stat. § 580.30 (2025).)

Filing Bankruptcy to Stop Foreclosure in Minnesota

If you're facing a foreclosure, filing for bankruptcy might help. In fact, if a foreclosure sale is scheduled to occur in the next day or so, the best way to stop the sale immediately is by filing for bankruptcy.

Once you file for bankruptcy, something called an "automatic stay" goes into effect. The stay functions as an injunction, which prohibits the lender from foreclosing on your home or otherwise trying to collect its debt, at least temporarily.

In many cases, filing for Chapter 7 bankruptcy can delay the foreclosure by a matter of months. But if you're behind in mortgage payments and can't protect your equity, you'll probably eventually lose your home to foreclosure. If you want to save your home, filing for Chapter 13 bankruptcy can provide a way to pay the mortgage arrears. To find out about the options available to you, speak with a local bankruptcy attorney.

What Is the Right of Redemption in a Minnesota Foreclosure?

One way to stop a foreclosure is by "redeeming" the property.

Redeeming Your Home Before a Foreclosure Sale

In Minnesota, you have the option to pay off the full amount of the loan before the foreclosure sale. This will stop the foreclosure.

How Long Is the Redemption Period After a Minnesota Foreclosure?

Some states also provide foreclosed borrowers a redemption period after the foreclosure sale, during which they can buy back the home.

General redemption period. Most homeowners get a six-month redemption period. (Minn. Stat. § 580.23 (2025).)

Longer redemption period under certain circumstances. Minnesota homeowners get a 12-month redemption period if:

• the amount due as of the date of the filing of the notice of foreclosure sale is less than 66 2/3% (two-thirds) of the original principal amount of the loan
• the mortgaged property is bigger than 40 acres in size, or
• the mortgaged property is between 10 and 40 acres and is in agricultural use. (For parcels in agricultural use, the homeowner may agree to waive the 12-month redemption period. If there is a waiver, the regular six-month period applies.) (Minn. Stat. § 580.23 (2025).)

Reduced redemption period for abandoned properties. If the homeowner abandons (leaves) the home, the redemption period is five weeks. (Minn. Stat. § 582.032 (2025).)

Reduced redemption period if homeowner postpones the sale. Minnesota law permits the homeowner to postpone the foreclosure sale, but the trade-off is a reduced redemption period of five weeks. (Minn. Stat. § 580.07 (2025).)

How to find out the length of your redemption period. Again, under Minnesota law, you'll receive a notice of your redemption rights as part of the nonjudicial foreclosure process (Minn. Stat. § 580.041 (2025).)

How much it costs to redeem. To redeem, you must pay the full amount the purchaser paid at the sale, plus interest and certain costs (Minn. Stat. § 580.23, § 581.10 (2025).) You can find out the amount needed to redeem (and who the winning bidder at the sale was) by attending the sheriff's sale (the foreclosure sale) or by contacting the sheriff's office after the sale.

You can sell the home during the redemption period. If you decide you don't want to redeem the house, you can attempt to sell it during the redemption period. You must sell it for enough to pay off the winning bidder from the foreclosure sale, plus interest, fees, and other claims against the property. If there are any proceeds left after these amounts are paid, you may keep that extra money. You can also enter into a short sale (an agreement in which the lender agrees to accept less than the full amount you owe on the mortgage.) (Minn. Stat. § 580.041 (2025).)

Can Minnesota Lenders Pursue a Deficiency Judgment?

In a foreclosure, the borrower's total mortgage debt sometimes exceeds the foreclosure sale price. The difference between the total debt and the sale price is called a "deficiency." For example, say the total debt owed is $400,000, but the home sells for $350,000 at the foreclosure sale. The deficiency is $50,000.

In some states, the lender can seek a personal judgment against the debtor to recover the deficiency. Generally, once the lender gets a deficiency judgment, the lender may collect this amount from the borrower.

In Minnesota, the lender can't obtain a deficiency judgment against the borrower if the mortgage is foreclosed nonjudicially and the redemption period is six months or five weeks (applicable to abandoned properties). (Minn. Stat. § 582.30 (2025).)

Where to Get Help with Foreclosure in Minnesota

For more information on federal mortgage servicing laws, as well as foreclosure relief options, go to the Consumer Financial Protection Bureau (CFPB) website. You can also learn more by reading Nolo's articles:

• Get tips on what to do—and what not to do—if you're facing a foreclosure.
• Learn about last-minute strategies to stop foreclosure.
• Find out if foreclosures are on the rise.

To learn more about foreclosure procedures, homeowner protections, and your options if you're facing foreclosure, get Nolo's The Foreclosure Survival Guide.

If you have questions about Minnesota's foreclosure process or want to learn about potential defenses to a foreclosure and possibly fight the foreclosure in court, consider talking to a local foreclosure attorney. Talking to a HUD-approved housing counselor about different loss mitigation options is also a good idea.