Start Your Plan Before the Sale

If you're receiving notices indicating a creditor is foreclosing on your property, now is the time to start planning for the outcome of the process--which you do have control of up until the end of the redemption period. Redemption period, refers to the period of time between the completion of a foreclosure sale (sheriff sale) and the date the winning bidder takes full control of the property. For residential property in Minnesota, the redemption period can be anywhere from five weeks to 12 months – with the most common time being six months. The length of the redemption period is listed on the sheriff sale notice. Do not vacate the property during the redemption period! If you have a 6 month redemption period, the winning bidder may go to court and have that redemption period judicially shortened to just 5 weeks if the property is deemed abandoned.

Before the sale, if you believe you can get your budget back on track and resume making regular payments, by all means do so. There are many no cost avenues for seeking help with doing this. Before the sale, it's still possible to bring your debt current and continue paying on the obligation. After the sale, you must pay the entire remaining mortgage balance plus all accrued expenses to retain your property.  You would have until the end of the redemption period to do this. Nevertheless, you should immediately find the current {market value} of your home as well as its projected {market value} at the end of the redemption period--do not use the assessed value on your tax statement, as true market value is often higher.  You can still sell your property until the end of the redemption period.  Your motivation for doing this is your home may be worth more than the amount needed to redeem the property from foreclosure.  If this is the case, you would keep the difference between the sale price and what the creditor is owed.  Selling the home and redeeming, would also keep a foreclosure from your financial records.  The latter might be something to consider even if you can only break even.  A short sale may also be a consideration before the end of the redemption period, but the amount of time needed to execute one is a caveat.  To reiterate, first find out what the market value of your home is so you can make informed decisions.  It costs nothing to do this and may make financial sense to do so.