Record High Foreclosure Sales in Hennepin Co. in January

Minnesota Foreclosure & Real Estate News
MINNEAPOLIS – Hennepin County is already experiencing a record number of foreclosure sales in 2008, the sheriff’s office said. There were 711 foreclosure sales in the month of January, up nearly 275 from January 2007.

The most recent record-breaking month was October 2007 when the sheriff’s office handled 561 in the month’s span.


FORECLOSURE FAQ
Source: Hennepin County Sheriff’s Office

What is a foreclosure?

A lender has the right to foreclose on a mortgage when a homeowner defaults on mortgage payments. The average default period is 60 days. If the homeowner cannot successfully pay the delinquent costs of the mortgage, the lender will set a date when the mortgaged premises will be sold at public auction. The Minnesota Housing Finance Agency offers information about mortgage foreclosures on their Website at www.mhfa.state.mn.us.

How does the sale of foreclosed property take place?

The lender advertises the date of the public auction on the mortgage at least six weeks before the sale. A representative of the Sheriff’s Office in which the property is located will conduct the sale on the advertised date. A statement will be read by the Sheriff’s Office representative stating the amount due at the time of sale. The mortgage is then sold to the highest bidder who receives a certificate of the sale.

After the foreclosure sale, who has possession of the property?

Under Minnesota law, the original homeowner retains possession of the premises even though the mortgage has been sold. Minnesota law generally allows for a 6 month redemption period. During the redemption period, the homeowner has the opportunity to seek new financing on the mortgage, settle with the lender, or sell the property in order to pay off the mortgage. After the redemption period, if the original property owner has not paid the defaulted mortgage, the sale of the premises is complete and the certificate of sale holder owns the property.

What are my rights if I am a renter?

A renter may remain in the premises during the redemption period, if the lease agreement has not otherwise expired, but there may be issues regarding water, electric/gas service and the security deposit if the owner of the premises is in financial difficulty. If this is an issue, contact your city offices for assistance. A renter also has various personal rights aside from the ones listed in the rental contract. For more information and complete listings of tenant/renter rights, review your lease agreement or contact the State of Minnesota Attorney General’s Office at www.ag.state.mn.us.

How will I know if my building/property has been foreclosed upon?

The lender is required to publish notice at least six weeks before the Sheriff’s Office conducts the sale. The lender will serve the same notice to you to inform you of the mortgage foreclosure at least four weeks before the public auction. It is important to follow up on this letter and review all of your available options by speaking with a lawyer or housing authority.

Do I need to move out right away?

No. In the case of foreclosure, the letter you receive from the lender will specify the actual date upon which you must vacate the premises. You will have at least one month’s written notice to vacate. Assuming the lease was signed before the foreclosure procedure began and you continue to pay rent and abide by the terms of the lease, you will not be required to vacate sooner than one month after expiration of the redemption period. If the landlord sells the property to a buyer before the redemption period has ended, then the buyer steps into the shoes of the landlord and is held to the lease. That is, the lease continues the same as with the first landlord.

Will my rental deposit be returned if my property is foreclosed upon?

By law, landlords are required to refund the security deposit plus interest or transfer it to the new landlord’s possession. The landlord must make the refund within 21 days after the day the tenancy ends.

To whom should I pay rent?

If the property you are renting goes into foreclosure, continue to pay rent to the landlord during the redemption period unless otherwise notified. It is possible that the lender will have a “receiver” appointed by the court to receive rent during the redemption period.

Is there help for people in crisis because of foreclosure?

Hennepin County offers assistance to those in crisis. For information about any or all of the programs, http://wwwa.co.hennepin.mn.us/portal/site/HCInternet

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