Call your mortgage company first and see if you can make an arrangement to modify your loan, meaning adjust our payments, or offer you forebearance, which means delay payments due. If you can't come to agreement with your lender, the first agency you should call is the Minnesota Housing Finance Agency (MHFA), 651-296-3353. MHFA can provide education and foreclosure relief loans.
The 2021 mortgage extensions include forebearance and a moratorium on evictions for government-backed loans. However, only 30% of mortgages are not government backed. You can read more here:
There are many other options for you if you are behind on your payments, from a selling to refinancing to asking the lender to waive penalties and fees. If you sell your house, you need to pay back the redemption amount. You can call your lender or your county recorder and ask what that is (if you have a second mortgage, that would have to be negotiated also or you can be held liable for it). If you owe more on your mortgage than you can sell your house for, it may be possible for the seller to allow you to sell the house as a short sale. Here are 9 options that can help you save your home.
If you are four months behind on your payments (120 days), the mortgage company can start the foreclosure process (in most cases). First, your mortgage company will send you a notice of default. The notice is only required to provide you 30 days to pay all amounts due (including costs and fees). You can reinstate your loan anytime before the sheriff's sale.
After 120 days, your mortgage company can file a lis pendens with the county. The lis pendens is a written notice that a lawsuit has been filed regarding the property. To schedule a sheriff's sale, the mortgage company then has to publish notice in the local newspaper for six weeks beforehand, and serve notice to the occupants four weeks before the sale.
Once the sheriff’s sale has occurred, it can be hard to save the home. Generally, the mortgage can no longer be “cured” or “worked out", but rather a whole new loan must be obtained to cover the amount bid for the property at the sheriff’s sale, interest, attorney’s fees, and various other fees relating to the foreclosure. So it is highly recommended to do everything you can to work out your loan with your lender.
After the sheriff's sale, there is typically a redemption period of six months, and you can remain in the home during this period. In some cases the redemption period may be 12 months (for agricultural properties or if you have paid off more than 2/3 of the mortgage). During the redemption period, you can look into refinancing or even selling your home. If neither of those options work, after the 6-month redemption period, you have to leave.
Minnesota law allows you to delay a sheriff’s sale for five months, giving you an opportunity to bring your mortgage current. You have to file an Affidavit of Postponement with the county. The trade-off is that the redemption period is reduced to five weeks (instead of six months). You should consult with a mortgage professional before filing for postponement.
This chart shows the approximate timelines for (1) the Regular Route and (2) the Postponement Route. The Postponement option may give you less time in your house, but it gives you more time to save your house
Sheriff Sale Happens: Redemption Ends: Total time:
1. ~ 4 weeks after notice ~ 6 mos. after sheriff's sale ~ 7 mos.
2. ~ 5 mos. after notice ~ 5 weeks after sheriff's sale ~ 6 mos
It is possible for you to sell and get out of your house, and not do lasting harm to your credit. It only takes 3 years before you can buy again after a foreclosure.
Organizations that Can Help
If you are behind, here are organizations you can call for help.
MN Home Ownership Ctr.
Free foreclosure consulting
1000 Payne Ave #200
St. Paul 55310
Lutheran Social Services
Free foreclosure consulting
MN State Atty. General
Five Ways to Spot a
Loan Modification Scam
If you are behind on your mortgage, you may have been contacted by a company offering to help. Here are five red flags to be aware of. Real estate agents do not need any personal information to provide you with a market analysis.
- Be aware of any company that guarantees a loan modification or way to stop your foreclosure.
- Nobody should have to pay for help with their mortgage situation.
- Be aware of companies trying to resemble or represent themselves as government agencies.
- Be aware of any company that asks you to sign a quit claim deed or release of information.
- Do not share personal information with any third party that contacts you first.