Minnesota has changed its regulations as regards Minnesota foreclosures of properties classified as homestead properties. The changes are intended to ameliorate the affects of abandoned properties on the property values of nearby residences. They are also intended to reduce the number of personal bankruptcies resulting from foreclosure of a primary residence. In addition to assisting homeowners, the regulations also affect lenders and give new powers over abandoned properties to municipal governments.

Under the new Minnesota foreclosures laws, homeowners who are in arrears on their property and have been given a forced sale date can apply to have the sale date postponed by five months. Before these changes were made the only party with the authority to postpone a forced sale was the mortgage holder. Lawmakers hope that homeowners who have fallen into arrears after losing their jobs in these days of uncharacteristically high unemployment can use the additional time to get back to work and bring their mortgage payments current.

This new solution to Minnesota foreclosures is not always appropriate, depending upon the homeowners circumstances. But for those with a reasonable chance of bringing their mortgage back into good standing, it does provide additional time for homeowners faced with a forced sale to avoid having to either pay the balance of the mortgage outright within six months of the sale date or declare bankruptcy.

To avail themselves of this grace period now permitted in Minnesota foreclosures, homeowners must meet certain criteria. It is only permitted on residences that are classified as a homestead. As before, property owners may only classify one property as a homestead and that property can not consist of more than four units.

To qualify for a postponement of a forced sale date, the homeowner must take several steps no less than 15 days before the sale date. These requirements include completing an Affidavit of Postponement, filing the affidavit with the relevant county office, filing the affidavit with the sheriffs office charged with conducting the sale, and serving the lawyer handling the mortgage foreclosure with a copy of the affidavit.

The redemption period refers to the six months following the forced sale of a mortgaged home. By the end of the redemption period the mortgage, less the proceeds of the forced sale, must be paid in full or the mortgage holder may force the mortgagee into bankruptcy. For homeowners considering taking advantage of the 5 month postponement option, it is essential that they get the mortgage current within the postponement period.

Under the terms of the new statute, homeowners who are successful in postponing a forced sale date but are unsuccessful in bringing the mortgage current within the 5 month postponement period have their redemption period reduced from five months to five weeks. This is a comfort to lenders because it means the Minnesota foreclosures process is not lengthened the time it takes for the process to be completed.

Under these new Minnesota foreclosures regulations, no homeowner may request a second postponement under any circumstances. This applies even if the mortgage was successfully brought up to date within the postponement period. This means that if the homeowner gets behind on their mortgage a second time, only the lender can authorize the postponement of a forced sale date

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