Foreclosure Prevention
If you are having difficulty meeting your homeownership obligations, such as mortgage, taxes, and association dues, we encourage you to notify your lender early on. Your lender may be willing to create a payment plan or change the terms of your existing loan so it is more affordable.
Do not wait until you have fallen behind on your mortgage before asking for help. Your lender will be more likely to work with you if you contact them before you start missing payments. They may be willing to create a payment plan or change the terms of your existing loan so it is more affordable.
If you are already behind on your mortgage or have missed one or more payments, seek help immediately. The longer you wait, the fewer options you have available to avoid foreclosure. If you can see that you might have difficulty in the near future, even if you are current with all of your housing expenses now, don’t wait; contact someone now. Accommodations may be made, especially if the situation appears temporary.
Frequently asked questions
What is foreclosure?
Foreclosure is the legal process that banks and mortgage companies use to force the sale of property to repay a debt usually the mortgage on a home. In Minnesota, the foreclosure process begins after the first missed payment.
Can I sell my home and avoid foreclosure?
You can put your home up for sale at any time while you are still the owner. Ownership will change hands at the end of the redemption period. If you sell the home for more than the existing mortgage, you can simply pay off the mortgage, fees and related costs, move out and go on with your life.
If you receive an offer and wish to sell your home for less than what you owe, you should talk with an experienced real estate agent and your lender about a "short sale."
This is where your lender agrees to accept less than the total owed in exchange for releasing the mortgage. Mortgage companies may allow you to sell your home for less because it can be expensive for them to own and sell the home themselves. Working with a real estate agent that is familiar with negotiating short sales is advised.
What happens if I walk away from my home?
You can walk away; however, you are still responsible for the amount due on the mortgage. Consequences you may face, include tax penalties and if the mortgage is not paid off after the foreclosure sale, the mortgage company can bring a judgment against you for the outstanding balance.
I’ve received a Notice of Intent to Foreclose. What happens when the mortgage company forecloses?
At three months past due you will receive a Notice of Intent to Foreclose.At this point, a foreclosure attorney is hired by the mortgage company. They will send you a pre-foreclosure notice. If you are not able to bring the mortgage current, the attorney will send you a notice of foreclosure no less than four weeks prior to the foreclosure, also known as a sheriff's sale.A notice of foreclosure will be published in the newspaper for six consecutive weeks with the place, date and time of the foreclosure (sheriff's sale). When the sale occurs, the occupants may remain for six months. During this redemption period, the property owner must pay off the entire mortgage and all fees in order to keep the property.
I’m a renter and got the Notice of Sheriff Sale addressed to “Occupant.” What do I do?
First, contact the landlord/management company. Let them know. You must continue to pay your rent, and you may continue to live in the home for the term of the lease and/or six months after the Sheriff’s Sale. Contact HOMELINE 612-728-5770 for answers to your specific questions.
What about bankruptcy?
Declaring bankruptcy in a foreclosure situation can be of assistance, however you should seek professional bankruptcy advice based on your specific situation. If you can’t keep up with the payments on your home, seek foreclosure advising right away. They will help you explore all of your options.
How do I avoid getting scammed?
There are always people who will want to take advantage of you and your situation. Beware of scams that have you pay them your mortgage payments instead of your mortgage company with a promise to get you out of foreclosure. Anything that sounds too good to be true probably is! There are free HUD-certified foreclosure advisors that will help you review your specific situation and help you understand your options. Here are some precautions to take before you make any decisions:
- Do not pay anyone to help you work with your mortgage company. Remember there are free Foreclosure Advisors who can assist you. Additionally, only attorneys may charge a fee for mortgage assistance.
- Don’t sign anything that confuses you.
- Get all “promises” in writing.
- Check with your lender/mortgage company or attorney before entering into any deal to make sure it will help your situation.
For answers to specific questions, call the Minnesota Homeownership Center at 1-866-462-6466.
Resources
The organization listed below can provide trusted referrals to free local HUD-certified housing counselors, who are familiar with the foreclosure process. They will help analyze your situation, help you understand your rights during the foreclosure process, identify your various mortgage options and help you develop a plan to work with your mortgage company to get back on track or smoothly transition out of the home if foreclosure cannot be prevented.
Minnesota Home Ownership Center
1000 Payne Avenue, Suite 200
Saint Paul, MN 55130
651-659-9336
1-866-462-6466