Foreclosures in Minnesota

Minnesota Supreme Court Building (Photo from MPR)

Last Friday, a court in Massachusetts ruled against two of the largest mortgage lenders in America.  The case, which involves US Bank and Wells Fargo, was to determine whether these lenders had the ability to foreclose without holding the actual mortgage note.  The issue at hand is one that is complex, and real estate analysts and economists are moving quickly to determine what the case might mean for other states.

This article in Finance and Commerce is a quick summary of what the Massachusetts case might mean for Minnesota.  The consensus seems to be that, since Minnesota does not have a statute similar to the one in Massachusetts that requires a promissory note to be held by the foreclosing entity, the same problems shouldn't arise.  The Supreme Court of Minnesota has already upheld that mortgage transfers within the Mortgage Electronic Registration Systems (MERS) are legal and that MERS has the ability to foreclose without naming all mortgage assignees.  But that doesn't mean that some foreclosed homeowners aren't trying to fight their foreclosures through legal channels.  I will keep you updated as this case unfolds.

The bigger point here is that, although a small number of homeowners have challenged the banks in court and won, the banks are powerful legal machines and there may be less expensive, more effective ways of avoiding a foreclosure.  Our real estate team specializes in short sales, essentially negotiating with the bank to allow you to sell your house and to forgive the outstanding loan debt.  And in some cases a homeowner in foreclosure can sell their house for enough money to "redeem" their property after the Sheriff's sale.

If you or somebody you know is in a foreclosure situation, we would be happy to sit down and explain the options available to avoid it.  Allowing the foreclosure to go through without any action is probably the worst way to deal with the situation.  We treat our clients with great care and do everything in our power to help them.  We also work with a great team of highly-professional and experienced lawyers to fight the banks for you.  All you have to do is act and pick up the phone!