Ggovire
GlossaryForeclosureMinnesota law

Foreclosure by action

2 min read
Short answer
Foreclosure by action is Minnesota's judicial foreclosure, under Minn. Stat. ch. 581. The lender sues, obtains a judgment and decree, and the sheriff sells under it. The court must confirm the sale, and the redemption period runs from confirmation rather than from the sale date. It is slower and costlier than advertisement, and it preserves the lender's deficiency claim.

Foreclosure by action is Minnesota's judicial route, governed by Minn. Stat. ch. 581. The lender files a lawsuit, and a court decides.

It is much less common than foreclosure by advertisement for residential property, and where it appears there is usually a specific reason.

The sequence#

The lender files a summons and complaint in district court, along with a certificate of representation and, where applicable, a homestead designation notice. A lis pendens is recorded against the property.

The court enters a judgment and decree adjudging the amount due with costs and directing the sheriff to sell.

The sheriff conducts the sale, with six weeks' published and posted notice, treated as a judgment sale.

The court then confirms the sale on the plaintiff's motion, and the sheriff issues a certificate.

The confirmation matters#

Here is the difference that catches people who understand advertisement foreclosure and assume the same clock applies.

In a foreclosure by advertisement, the redemption period runs from the sale date.

In a foreclosure by action, it runs from the date of confirmation.

Confirmation is a separate court step happening after the sale, on the plaintiff's motion, and its timing depends on the court's calendar. So the redemption deadline in a chapter 581 case is not calculable from the sale date alone, which is exactly the mistake someone tracking a deadline is most likely to make.

Why a lender chooses it#

No power of sale clause in the mortgage — then advertisement is unavailable and this is the only route.

Title problems requiring judicial determination, or other parties whose interests need adjudicating in the same proceeding.

Preserving a deficiency claim. The statutory bar in Minn. Stat. 582.30 subdivision 2 applies to foreclosures by advertisement with six-month or five-week redemption periods. A chapter 581 proceeding is not caught by it.

That last reason is the substantive one, and it changes the stakes for the homeowner entirely.

What it means for a homeowner#

If you have been served with a summons and complaint rather than receiving a published notice, this is a lawsuit and you are a defendant.

That has two consequences. There are deadlines to respond, and failing to respond produces a default judgment rather than merely allowing the process to continue.

And the deficiency protection that covers most Minnesota foreclosures may not apply here, meaning the debt can survive the sale.

Both make this a situation to take to a lawyer rather than to handle by waiting. Legal aid organisations handle foreclosure matters and the assistance is free for those who qualify.

Reinstatement still applies#

Minn. Stat. 580.30 permits reinstatement at any time before the sale in both routes. Being in a court proceeding does not remove that option.

Common questions

When does a lender foreclose by action instead?
Where the mortgage lacks a power of sale clause, where title problems need a court to resolve them, where other claims must be determined in the same proceeding, or where the lender wants to preserve a deficiency claim that advertisement would extinguish.
When does the redemption period start?
From the date the court confirms the sale, not from the sale itself. That differs from foreclosure by advertisement, where the clock runs from the sale date, and it means the timeline is longer and less predictable.
Is a deficiency available after foreclosure by action?
It can be, which is one of the main reasons a lender chooses this route. The statutory bar in Minn. Stat. 582.30 subd. 2 applies to foreclosures by advertisement with six-month or five-week redemption periods, not to chapter 581 proceedings.
Keep reading
Foreclosure by advertisement
Minnesota's non-judicial foreclosure process under chapter 580, conducted by published notice and sheriff's sale without a court proceeding.
Deficiency judgment
A judgment for the shortfall when a foreclosure sale raises less than the debt, barred in most Minnesota residential foreclosures by advertisement.
Lis pendens
A recorded notice that a lawsuit affecting title to real property is pending, binding anyone who buys or lends against the property afterward.