Under Minnesota law does conducting a short sale and then seeking a deficiency judgment violate the one form of action rule?

Short sale deficiency judgment Minnesota law states that lenders can file a judicial foreclosure action/foreclosure by action, though Minnesota prefers to conduct foreclosures by non-judicial foreclosure/foreclosure by advertisement and have the lender auction your property at a foreclosure sale.

Therefore, after the foreclosure has been filed in the state of Minnesota, you can be sued for a deficiency judgment without violating the one form of action rule.  A deficiency judgment is where the lender obtains a court order that states that you should pay any remaining balance on the loan that the lender cannot get back from the foreclosure sale on the property.  This will take place after the sale has been completed.

Prior to commencing foreclosure, the attorney conducting the foreclosure must file a power of attorney indicating the foreclosure will be pending.  A notice of sale must be published for six weeks in a newspaper of general circulation in the county where the property is located.  The occupants/owners must be given at least four weeks’ notice before the sale takes place, while homestead property owners must be given at least eight weeks’ notice.

Minnesota also has a post-sale redemption statutory right of twelve months if the amount due as of the date of the filing of the notice of sale is less than two-thirds the original amount of the loan and the property is larger than 10 acres or 40 acres. 

Talk to a Minnesota foreclosure lawyer for a case review and for attaining legal advice regarding your options under Minnesota foreclosure laws.