A lender in Minnesota wants to foreclose on a defaulted residential mortgage and seeks a court judgment that will also address any deficiency remaining after the sale proceeds are applied to the debt. Which foreclosure method must the lender use to pursue a deficiency judgment in this manner?
Correct Answer
B) Judicial foreclosure under Chapter 581, which allows the court to enter a deficiency judgment
Judicial foreclosure under Minnesota Statutes Chapter 581 involves court proceedings and allows the court to enter a deficiency judgment against the borrower if the foreclosure sale proceeds are insufficient to satisfy the full debt. This is one reason a lender might choose the more time-consuming judicial process over the non-judicial Chapter 580 method.
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