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 usually begins after the third missed payment.
What should I do to avoid foreclosure?
Don’t ignore letters from your lender. First, talk to your lender. Your lender may be able to help you avoid missing mortgage payments or catch up on those you’ve missed. Also talk with the “loss mitigation” department about workout options. Always be sure to get the individual’s name, phone number and the date and time of your call.
Minnesota Home Ownership Center.
Can I refinance if I’m in foreclosure?
Maybe. If you are behind on mortgage payments, it may be difficult to find a new mortgage. Be careful: refinancing when you are behind on your payments may be expensive because the late payments will show up on your credit. Make sure you can afford to make the new monthly payment.
Where can I go for help?
In Minnesota, foreclosure counseling is available from a partnership of organizations. Families seeking assistance should contact the organization representing their county. (Map)
- Suburban Ramsey residents should call: LSS Financial Counseling - 1-800-777-7419
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. 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 to 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. Lending institutions 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 just walk away from my home?
You can just walk away; however, you may face huge consequences, including tax penalties, legal judgments and even outstanding debt if you don't “forfeit” your home legally.
I’ve received a Notice of Foreclosure. What happens when the bank forecloses?
You are probably four months late in making payments and have already received a Notice of Intent to Foreclose. Attorneys hired by the bank will publish a notice of foreclosure in the newspaper and schedule the date of Sheriff’s sale. Occupants are notified four weeks before the 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 it.
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 bad for you and your credit rating and may prevent you from owning another home for a number of years. If you can’t keep up the payments on your home, seek financial counseling right away. They can help you explore all of your options. Find a reputable organization that can help you explore all of your options. Bankruptcy may seem like an easy way out, but there are a lot of costs. See "Where can I go for help?" to find the foreclosure counselor in your area.
How do I avoid getting scammed?
There are always people who will want to take advantage of you and your situation. Anything that sounds too good to be true probably is! Take some very basic precautions before you make any decisions:
- 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.
- Do not pay anyone anything until the service has been performed to your satisfaction; be sure the fees requested are not excessive.
For answers to your specific questions, call the approved Foreclosure Prevention Counseling Agency for your county. In suburban Ramsey County call 1-800-777-7419.
Resources
The organizations listed below can provide trusted referrals and, in some cases, financial assistance to families facing foreclosure. Counselors familiar with the lending community will help analyze your situation, identify options for preventing foreclosure and help you develop a plan to get back on track.
Minnesota Home Ownership Center
1000 Payne Avenue, Suite 200
Saint Paul, MN 55130
651-659-9336
1-866-462-6466
Lutheran Social Services (suburban residents)
LSS Financial Counseling
424 W. Superior St., Suite 600
Duluth, MN 55802
1-800-777-7419
Note: The Duluth office does the intake process and then clients are referred to the appropriate local counselors in the client's city or county.
City of Saint Paul - Foreclosure Prevention Program 12th Floor (St. Paul Residents)
City Hall Annex
25 W. 4th St.
Saint Paul, MN, 55102
651-266-6626
Minnesota Housing Finance Agency
400 Sibley St., Suite 300
Saint Paul, MN 55101-1998
651-296-7608 or 1-800-657-3769 (General information)
Children’s Home Society and Family Services Foreclosure Program
1711 W. County Rd. B
Suite 200 S
Roseville, MN 55113
651-222-0311
ACORN Housing
757 Raymond Ave., Suite 200
Saint Paul, MN 55114
651-203-0008
Beware of scams
Scam artists offer to “rescue” homeowners from foreclosure by “paying your mortgage.” In reality, they are looking for a quick profit as they evict you and your family, pocket mortgage payments meant for the lender and sell your home on the open market. Anyone can become a victim.
Contact the Minnesota Home Ownership Center for more information about foreclosure counseling.