There
are two ways to foreclose a mortgage in Minnesota, one is “by
action” and one is “by advertisement”.
The methods are set out in Minn. Stat. Chapters 580 and 581.
A foreclosure “by action” means
that the lender sues you, gets a judgment, and then has an auction of
your collateral. A foreclosure “by advertisement” means that the lender sends
you notices, publishes in a legal newspaper, and has a sheriff's
sale, but there is no court involvement. “By advertisement” is
somewhat cheaper and somewhat quicker, and it is the way virtually
every Minnesota residential mortgage is foreclosed.
The difference, from the borrower's
standpoint, is that a foreclosure “by advertisement”, with a six
month redemption period, means that the lender cannot come after you
for a deficiency (a short-fall between the loan amount and the price
at which the lender sells the home to another person). So, if your
mortgage is $150,000, and the lender forecloses the loan “by
advertisement” and with a six month period of redemption, even if
the lender sells the home to a third party for $100,000.00, you will
not owe the lender any money. (This assumes you don't do anything
stupid, like destroy the house!)
If
it is a conventional mortgage, the usual thing that happens is that
Wells Fargo forecloses “by advertisement”.
However,
if it is a VA mortgage , the Veterans Administration may well pursue
you for any deficiency. The same thing applies to a Rural Housing
loan through the US Department of Agriculture (formerly Farm Home
Administration). It appears that an FHA loan has the authority to
pursue you, but I have not seen that happen in practice.
So,
you need to be certain what kind of mortgage you have.
