When we hear the word “foreclosure,” we may think of boarded up homes in bad neighborhoods, “no trespassing” signs, and perhaps some freeze damage thrown in for good effect.  Also, we tend to think that Minneapolis foreclosures are all found in the 200k or less price range.  While it is true that there are plenty of lender mediated properties in lower price ranges, there are a handful of upscale (1M+) Minnesota luxury home foreclosures available.  The good news is that many of them are in excellent condtion, and frequently they boast all of the vintage architectural details like lead-camed glass, oak pillars, and oak-tread stairways. Several of them boast prime Minnesota shoreline along Lake Minnetonka, in upscale neighborhoods of Orono and Minnetrista.

How did these properties end up in foreclosure?  Well, many of the Minnesota luxury home owners defaulted on their mortgages for the same reasons as everyone else, and in many cases, a risky mortgage product was a culprit. Also, many of these homes were purchased via “no-doc” or “liar loans” as mortgage officers facetiously call them.  Many of these homes were financed on the basis of unsubstantiated information, and the borrowers may have been a greater risk than what lenders were led to believe.  Also, the credit crisis made it difficult to obtain jumbo financing, as rates were higher than conventional mortgages and underwriting standards became tough.

Fortunately, the credit crunch for the Minnesota luxury home market  has eased up considerably, and jumbo financing rates are coming down to approach those of conventional programs. Combine this trend with the prevailing low real estate prices, and you have an ideal opportunity to own a luxury home that may have previously been out of your reach.  While it is a myth that you can buy Minneapolis luxury home foreclosures for pennies on the dollar, you still can find savings and value.

Foreclosed Minnesota Luxury Homes for Sale

At the time of this post, there were only ten listings priced over 1M on the Northstar Regional MLS/IDX feed.  Keep in mind that not all mls listings are posted on the idx system, and that we may be able to find others that are available in your area.  Also, this number may not reflect “pre-foreclosure” listings that are NOT short sale situations because there is a fair amount of equity.  Also it does not include homes that may have been listed at $1M or higher, but have recently had price reductions below that mark.  If you would like more comprehensive information about distressed luxury properties, please contact us.

Related posts:

1. Minnesota Foreclosure Process
2. Twin Cities MN Home Sales Trends

Here’s a video provided by the Minnesota Association of REALTORS® that offers a succinct explanation of the Minnesota foreclosure process. The video was intended for REALTORS,® but would also be helpful for buyers and home owners who have defaulted on their mortgages. Many homeowners do not have a general knowledge of the Minnesota foreclosure process. Please note that this article is for information purposes only. This should not be construed as legal advice. Consult a real estate attorney if you want to know how this information applies to your particular association.

Steps in the Minnesota Foreclosure Process

1. Notice of Sale. This marks the beginning of the redemption period. The bank or mortgage company (mortagee) must provide six weeks of published notice of sale (sheriff’s sale.) This means six weeks of advertising in the local newspaper. The person who is in possession of the home is served notice as a Summons for Civil Action.
2. Sale. Any surplus realized from the sale of the property (after loan payoff and legal fees) must be paid to the mortgagor (property owner.)
3. Redemption Period after Sale. The most commonly used period is the six month redemption period. This means that the mortgagor has six months to pay off the entire loan amount and absorb legal expenses incurred by the mortgagee, in order to retain the property. If not, the mortgagee takes possession of the property. A five week redemption period is used if the seller has abandoned the property. A twelve month redemption period is primarily utilized for agricultural property. A two month redemption period is used if the bank and the property owner have reached some sort of agreement, and want to speed up the mortgage foreclosure process.

For more detailed information, download this pdf fact sheet provided by the Minnesota Association of REALTORS®.

Related posts:

1. Minnesota Luxury Home Foreclosures
2. Important Questions for Your Minnesota Town Home HOA.