Foreclosure is the legal process effected through the court system in which a mortgagee (lender—often a bank) terminates a mortgagor’s (borrower’s) interest in the real property in which the mortgagor gave the mortgagee a security interest (a lien) as collateral for the loan used to purchase the property.

Foreclosure generally occurs when a homeowner defaults and fails to make mortgage payments as required by the loan agreement (promissory note).

Foreclosure allows the lender to seize the property, remove the homeowner, and sell the home—all of which are legal remedies the mortgagor and mortgagee agreed to in the mortgage contract.

In Minnesota, foreclosure is a legal process that allows a lender to terminate a borrower's interest in a property due to the borrower's failure to make required mortgage payments. The process is initiated through the court system and is based on the agreement made in the mortgage contract, which grants the lender a security interest in the property as collateral for the loan. Minnesota law allows for both judicial and non-judicial foreclosure processes. In a judicial foreclosure, the lender must file a lawsuit and obtain a court order to foreclose on the property. In a non-judicial foreclosure, which is more common in Minnesota, the process is carried out without court intervention but must follow specific procedural requirements set forth by state statutes, including the publication of a notice of sale and a redemption period for the homeowner after the sale. If the borrower does not cure the default, the lender can proceed with the sale of the property to recoup the outstanding loan balance. The homeowner has the right to be notified of the foreclosure proceedings and may have options to prevent the foreclosure, such as loan modification, short sale, or filing for bankruptcy.