Right to sue to stop or undo a sale when the servicer skips loss-mitigation rules
Minn. Stat. § 582.043subd. 7
In plain words
Minnesota law requires servicers to follow loss-mitigation rules and limits foreclosure sales while a timely application is being reviewed. If a servicer violates those rules, you can go to court to stop (enjoin) the sale or set it aside, and a winning homeowner can recover reasonable attorney fees. You must record a lis pendens before the redemption period ends.
Who is protected
Minnesota mortgagors of owner-occupied homes covered by the loss-mitigation law.
When it applies
- Only in Minnesota.
- Only after a notice of default, once a sale date is set or after the foreclosure sale.
What you can do
Get ready for court
Keep proof of when you sent your complete application, and ask legal aid about suing to enjoin the sale.
Deadline: Before the sale if possible; a lis pendens must be recorded before redemption ends
Open the toolCompare your options
Compare a lawsuit with reinstatement, a modification or postponing the sale.
Open the tool
Honest limits
- Only violations of this section count, and the rules cover certain loans and applications only.
- This is general education, not legal advice. Laws change and details depend on your papers and your court; check the current law or ask a lawyer or legal aid.
The law
- State lawLoss mitigation; relief
Minn. Stat. § 582.043subd. 7
Exact part: subd. 7
What it says: A mortgagor may sue to enjoin or set aside a sale for a violation of the section, with attorney fees if successful.
Read the official texthttps://www.revisor.mn.gov/statutes/cite/582.043
Court cases
- Homeowner lostSame topicMartins v. BAC Home Loans Servicing, L.P.
Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249 (5th Cir. 2013)
a mortgage servicer acting for a properly assigned mortgagee may foreclose in Texas without possessing the original note, and an oral promise to modify a large loan is not enforceable
- Homeowner lostSame topicLage v. Ocwen Loan Servicing LLC
Lage v. Ocwen Loan Servicing LLC, 839 F.3d 1003 (11th Cir. 2016)
a servicer's duty to evaluate a loss-mitigation application depends on its being submitted more than 37 days before the sale date scheduled at that time
- Homeowner lostSame topicGresham v. Wells Fargo Bank, N.A.
Gresham v. Wells Fargo Bank, N.A., 642 F. App'x 355 (5th Cir. 2016) (per curiam) (unpublished)
the federal dual-tracking bar applies only when the servicer receives a complete loss-mitigation application more than 37 days before the foreclosure sale
- Homeowner lostSame topicBoren v. U.S. National Bank Ass'n
Boren v. U.S. Nat'l Bank Ass'n, 807 F.3d 99 (5th Cir. 2015)
a lender may abandon a prior acceleration by giving notice that it seeks less than the full accelerated balance, which restarts the four-year limitations period
- Homeowner lostSame topicWhittier v. Ocwen Loan Servicing, L.L.C.
Whittier v. Ocwen Loan Servicing, L.L.C., 594 F. App'x 833 (5th Cir. 2014) (per curiam) (unpublished)
a RESPA claim against a servicer fails without evidence of actual damages caused by the violation
- Homeowner lostSame topicMilton v. U.S. Bank National Ass'n
Milton v. U.S. Bank Nat'l Ass'n, 508 F. App'x 326 (5th Cir. 2013) (per curiam) (unpublished)
an agreement to delay a Texas foreclosure falls within the statute of frauds and must be in writing to be enforced
Related rights
Right to reinstate any time before the sheriff’s sale
Minn. Stat. § 580.30subd. 1
In Minnesota you can stop a foreclosure at any time before the sale by paying the amount actually in default (not the whole loan), plus allowed costs and attorney fees. This works for foreclosures by advertisement and by court action. The loan then continues as if the default had not happened.
Read this rightThe right to be heard in court, and to speak for yourself
U.S. Const. amend. XIV, § 1Due Process Clause
Due process means that before the government, through a court, takes your property, you must get a meaningful chance to be heard. In federal court, you have a legal right to present your own case without a lawyer. Most state courts also let people represent themselves, under state rules.
Read this rightPause a court case while on military duty
50 U.S.C. § 3932(b)(1)
If you are in military service and get sued, the court must pause the case for at least 90 days if you ask and show that your duty keeps you from appearing. Before a court can enter a default judgment against you, the other side must file a sworn statement saying whether you are in the military, and the court may appoint a lawyer for you.
Read this rightFHA loans: a meeting before foreclosure
24 C.F.R. § 203.604(a)(1)
If you have an FHA-insured mortgage, your lender must meet with you — or make a reasonable effort to arrange a meeting — before three full monthly payments are unpaid and at least 30 days before starting foreclosure. A reasonable effort means at least two verifiable attempts to contact you. HUD now decides how the meeting may be held.
Read this rightFHA loans: the lender must look at ways to avoid foreclosure
24 C.F.R. § 203.605(a)
If you have an FHA-insured mortgage, your lender must review loss-mitigation options every month before four full payments are unpaid, and take the appropriate action. FHA options can include special forbearance, loan modification, a partial claim (an interest-free second loan from HUD to cover arrears), a pre-foreclosure sale, or a deed in lieu.
Read this rightNo foreclosure filing until you are more than 120 days behind
12 C.F.R. § 1024.41(f)(1)
Your servicer cannot make the first notice or filing to start a foreclosure until your loan is more than 120 days delinquent. This gives you time to apply for help. There are narrow exceptions, such as a due-on-sale violation.
Read this right