Short Sale Process

Minnesota has one of the longest redemption periods in the state.  Typically, once the sheriff's sale has occured, the homeowner has 6 months to live in the home and try to sell it.
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July 10 2010 - Farmington
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Hi, sorry to disagree but some mortgage note holders will not allow a short sale after the sheriff sale has been executed. Some mortgage note holders are selling the notes and the new investor is not allowing a short sale.

I believe that Short Sale should be started right after at 1 payment has been missed and there is no way to cover the next payment.

Foreclosure Laws and Procedures By State
http://www.realtytrac.com/foreclosure-laws/foreclosure-laws-comparison.asp

In redemtion period the owner could pay the bid and recover the asset.
http://portal.hud.gov/portal/page/portal/HUD/topics/avoiding_foreclosure/redemption

http://www.foreclosurelaw.org/Minnesota_Foreclosure_Law.htm

Also, redemtion period could be shorter by mortgage holder in certain circuntances.

from General attorney:
http://www.ag.state.mn.us/consumer/ylr/mortgageforeclosure.asp

This link is great about Minnesota:
http://www.extension.umn.edu/distribution/businessmanagement/df7297.html

RIGHT OF REDEMPTION

Following the foreclosure sale, the mortgagor has a right under Minnesota law to redeem from the sale. Such a redemption annuls the sale. If there are any junior liens, however, they are revived by the redemption by the mortgagor.

The mortgagor must redeem within six months of the date of the sale unless one or more of the following applies, in which case the redemption period is twelve months:

  1. The mortgage was executed prior to July 1, 1967.
  2. The amount claimed due and owing as of the date of the notice of foreclosure sale is less than two-thirds of the original principal amount secured by the mortgage.
  3. The mortgage was executed prior to July 1, 1987, and the mortgaged property, as of the date of the execution of the mortgage, exceeded ten acres in size.
  4. The mortgage was executed prior to August 1, 1994, and the mortgaged property, as of the date of the execution of the mortgage, exceeded ten acres but did not exceed 40 acres in size and was in agricultural use as defined by Minnesota statute.
  5. The mortgaged property, as of the date of the execution of the mortgage, exceeded 40 acres in size.
  6. The mortgage was executed on or after August 1, 1994, and the mortgaged property, as of the date of the execution of the mortgage, exceeded ten acres but did not exceed 40 acres in size and was in agricultural use, as defined by Minnesota statute.
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July 10 2010
Well, there really isn't anything to disagree with since typically means not always! 

Most (again not all) lenders and/or investors don't want to own real estate and would prefer the properties are sold rather than deal with foreclosing.

My more recent experiences with short sales have been good, even with the banks that have gained a bad reputation.  I have been busy working with sellers helping them work their way through the information the mortgage companies need to get the process started.

If you have more time please feel free to share more about incentives for the lenders and homeowners to complete a short sale.
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July 10 2010
In some circumstances (abandonment of a single family home in a neighborhood where the home could be vandalized) the redemption period can be shrunk to as little as five weeks -with judicial involvement.

Also if you are able to postpone a foreclosure (with the intent of catching up on your loan - you get five months) and then are unable to pay what's due, the redemption period can be shrunk to five weeks.

Benito has done a great job of researching the minutiae of the state law which in select circumstances can be complex. But the majority of foreclosures in the state seem to be the garden variety non judicial 6 month redemption period.

I know that several years back I tried to sell a home that was in foreclosure but was still in redemption. The bank refused to budge below what they had paid at auction and the house ended up being returned to the bank.

Has anyone else had that experience?
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July 11 2010
Yes I had had such expirience with Citi but not with Wells Fargo.
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July 12 2010
My experience was with Wells Fargo. Apparently it's not specific to just Wells. Good to know.
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July 12 2010
 
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