Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. However, in Minnesota, a non-judicial foreclosure may only occur if: 1) no lawsuit to collect the on the mortgage is already underway; 2) the mortgage and any assignments of the mortgage to new lenders have been recorded; and 3) a notice has been given eight (8) weeks before the foreclosure on a homestead.

If all of these conditions have been met, then the foreclosure may proceed as follows:

1. A notice of sale, containing the borrower and lender(s) name, the original loan amount and current amount of default, the date of the mortgage, a description of the property and the time, place and date of the foreclosure sale, must be recorded in the county where the property resides.
   
2. The sheriff of the county in which the property is located must conduct the sale on the date specified in the notice of sale. At some point during the sale, the sheriff must read an itemized statement, which has been filed by the lender, of the amount due at the time of the sale. The property is sold to the highest bidder, who will receive certificate of sale.

Lenders may pursue a deficiency judgment, but it is limited to the amount of the fair marker value of the property and the unpaid balance of the original loan. Borrowers have up to one (1) year to redeem the property by paying the past due amount on the loan.