first missed payment
While small lenders technically could begin the foreclosure process immediately after a default, major lenders regulated by the Consumer Financial Protection Bureau generally cannot start the foreclosure process until 120 days after default: "A servicer shall not make the first notice or filing required by applicable law for any judicial or non-judicial foreclosure process unless... [a] borrower's mortgage loan obligation is more than 120 days delinquent." CFPB Reg X, §1024.41(f).
Prior to sending a loan to a foreclosure attorney, all large servicers must notify a homeowner in writing of available loss mitigation options offered by the servicer. Minn. Stat. § 582.043.
sent to foreclosure attorney
After a loan servicer decides to initiate foreclosure, the loan servicer typically transfers the file to an internal foreclosure department and hires a local foreclosure attorney. This is when "foreclosure" is often first reported on a person's credit report, despite Minnesota law that foreclosure is not initiated until the first foreclosure notice is published in a newspaper. A foreclosure attorney will mail a notice to the homeowner upon being hired of the attorney's involvement, that the attorney is a "debt collector" under federal law, and that the homeowner has 30 days to dispute the validity of the debt.
Foreclosure attorneys may internally set a proposed sale date right away upon opening the file. A call to the foreclosure attorney asking for that date can help a homeowner plan for the future. Generally a foreclosure firm takes about three months from the date of its first letter to the homeowner to bring the property to a sheriff's foreclosure sale.
publication & service
"Six weeks' published notice shall be given that such mortgage will be foreclosed by sale of the mortgaged premises or some part thereof, and at least four weeks before the appointed time of sale a copy of such notice shall be served in like manner as a summons in a civil action in the district court upon the person in possession of the mortgaged premises, if the same are actually occupied. If there be a building on such premises used by a church or religious corporation, for its usual meetings, service upon any officer or trustee of such corporation shall be a sufficient service upon it. The notices required by sections 580.041 and 580.042 must be served simultaneously with the notice of foreclosure required by this section." Minn. Stat. § 580.03
mortgagor's redemption period
Almost always, a homeowner has 6 months after the sheriff's sale (but sometimes as short as 5 weeks or as long as 12 months) to "redeem" from a sheriff's foreclosure sale. Redemption means paying off (matching) the amount bid at the sheriff's sale, plus some interest and costs. This is typically accomplished by refinancing (perhaps with the help of family or friends) or selling the property on the open market so that the homeowner doesn't lose any equity he or she has saved up by paying on the mortgage loan over time.
During this "redemption period" a homeowner is still the owner of the property and can keep living in and using the home as the owner. After the last day of the redemption period, if the homeowner has not redeemed, the homeowner no longer own the property. At that point, if you do not voluntarily leave, the highest bidder at the sheriff's sale may file an eviction against any occupants in court to have a judge order all occupants to leave. Minn. Stat. § 580.23. Minn. Stat. § 580.041.
JUNIOR creditor's redemption period
Junior lien holders, such as holders of a second or third mortgage, judgment, or perhaps an unpaid IRS debt, lose any interest in the real estate if the foreclosure process completes. This does not eliminate the debt of the junior lien holder, but only the interest in the real estate. In order to protect a junior lien holder's rights in the property, Minnesota allows a junior creditor to "redeem" as well, under some circumstances in the weeks shortly after the homeowner's period to redeem. Junior creditor redemption is a complicated process, but both homeowners and junior lien holders can benefit from it under certain circumstances. Seek counsel from an attorney if you believe this may apply to you. Minn. Stat. § 580.24.
move out or eviction
After the foreclosure process has completed and ownership changes, the locks are NOT suddenly changed. The new owner (often the winning bidder from the foreclosure sale) needs to start an eviction action in order to remove a person, or personal property, from the land. The eviction process after foreclosure is almost identical to the process a landlord would take to evict a tenant. Information about eviction is here.
The CARES Act provides that loan servicers of federally backed mortgages must: "Upon receiving a request for forbearance from a borrower under subsection (b), the servicer shall with no additional documentation required other than the borrower’s attestation to a financial hardship caused by the COVID–19 emergency and with no fees, penalties, or interest (beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the terms of the mortgage contract) charged to the borrower in connection with the forbearance, provide the forbearance for up to 180 days, which may be extended for an additional period of up to 180 days at the request of the borrower, provided that, the borrower’s request for an extension is made during the covered period, and, at the borrower’s request, either the initial or extended period of forbearance may be shortened." PUBLIC LAW NO. 116-136, SECTION 4022.
Fannie Mae and Freddie Mac agreed NOT to foreclose or evict homeowners through December 31, 2020.
Minnesota reached agreement with 31 lenders for forbearance options for Minnesota Homeowners. Press Release. Homeowners can apply through their servicer for forbearance options.