Foreclosure consultant
A foreclosure consultant, in Minnesota law, is anyone who solicits or offers, for compensation, to help a homeowner in foreclosure stop or postpone a sale, obtain a modification, or otherwise save the home.
The role is regulated under Minn. Stat. ch. 325N — the Minnesota Home Ownership and Equity Protection Act, enacted in 2004 in response to foreclosure rescue scams.
Why the chapter exists#
Because homeowners in foreclosure are identifiable.
A notice of pendency is recorded. A notice of sale is published. Both are public, both name the property, and both signal a household under pressure with equity in a house.
That combination attracts solicitation, and the legislature concluded that the people receiving it needed protection that ordinary contract law was not providing.
What the chapter requires#
Written contracts meeting specified requirements.
Cancellation rights, with the notice of cancellation provided in a prescribed form and prominence.
Prohibitions on specified conduct.
And critically: waiver of the statutory protections is void as contrary to public policy. A homeowner cannot sign away chapter 325N, and a contract purporting to do so does not achieve it.
What the definition excludes#
The chapter is aimed at intermediaries, not at everyone who touches a foreclosure.
Licensed attorneys acting in that capacity, certain lenders and their agents, and a range of other regulated parties acting within their proper role fall outside it — as do common interest community associations owed a secured obligation.
The scope of the protections#
Chapter 325N applies to one- to four-family residential property, one unit of which the owner occupies as a principal residence, where a foreclosure notice has been recorded or a summons and complaint served.
The definition of a property reconveyance reaches transactions occurring before the expiry of the reinstatement right under 580.30, the redemption right under 580.25, tax redemption under chapter 281, repurchase under chapter 282, or the period to cure a contract for deed default.
That breadth is deliberate. The protections follow the homeowner through every window in which they still have something to lose.
The practical advice#
A foreclosure consultant may be perfectly legitimate. The statutory framework exists because many were not.
Before signing anything, speak to a HUD-approved housing counsellor. The service is free, the advice is not attached to a transaction, and it will tell you whether what is being offered is worth paying for — or whether it is something you could obtain at no cost.