By 
Why are owners in foreclosure targeted?
Because a foreclosure notice is public. Once a notice of sale is published, the letters start: “Stop your foreclosure now.” “We can save your home.” Some are real options. Some are schemes designed to take the equity you have left. Minnesota has a specific law aimed at this, Minn. Stat. ch. 325N. Here’s how to tell the difference, and what your real foreclosure options look like.
This is general information, not legal advice. If you think you’re being scammed, call the Minnesota Attorney General’s Office.
The common schemes
The upfront-fee “negotiator.” Someone promises to get your loan modified or the sale stopped if you pay a fee first. Then nothing happens, and the sale goes forward. Free help exists; you should never need to pay upfront.
The deed-and-lease-back. A buyer offers to “save” your house by having you sign the deed over. You’ll rent it back and buy it back later when your credit recovers. Then the rent is unaffordable, the buyback terms are impossible, and your equity is gone.
The fake refinance. Documents presented as a new loan are actually a deed transfer.
The phantom help. Someone collects your financial information and your payments and forwards nothing to your lender.
What Minnesota’s law does
Minn. Stat. ch. 325N covers two groups:
- Foreclosure consultants: people who offer to stop or postpone a foreclosure or help you save your house for a fee. The law requires written contracts with specific terms, gives you cancellation rights, and restricts collecting fees before the promised services are fully performed.
- Equity purchasers: people who buy a home from an owner in foreclosure. The law requires specific written contracts and notices, gives the owner a right to cancel within a set window, and imposes duties on the buyer, especially in lease-back or buy-back arrangements.
Violations can make contracts voidable and expose the buyer or consultant to liability. The details depend on the deal, so if you’ve already signed something, talk to an attorney fast.
Red flags
| Red flag | Why it matters |
|---|---|
| Any upfront fee | Free counseling is available; fees before results are a warning sign |
| “Sign the deed, we’ll handle it” | A deed transfer outside a real closing can cost you everything |
| Rent-back or buy-back promises | Common structure for equity stripping |
| Pressure to sign today | A real offer survives a day of thinking |
| Told not to talk to your lender or a lawyer | You should talk to both |
| No license, no address | Run the checks below |
How to check any buyer or helper
- License. Look them up with the Minnesota Department of Commerce.
- Business registration. Search the Minnesota Secretary of State.
- Physical address. Visit it or look it up.
- Proof of funds. For any buyer.
- A real closing. At a Minnesota title company, with a settlement statement.
That’s the core of our Wholesaler Test. Run it on us, too.
How we handle buying from owners in foreclosure
We don’t charge you anything. We don’t ask you to sign a deed except at a real closing at a title company. We put our offer and the other three paths in writing, including reinstatement or a refinance if they fit better, and we make nothing on those. Ryan gives you his written license disclosure as a Minnesota salesperson, license #40924708, with Coldwell Banker Realty. And we follow the written contract and notice requirements that apply to buying from an owner in foreclosure.
Free help
The Minnesota Homeownership Center connects homeowners with free HUD-approved foreclosure prevention counselors. Call them. You can call us at the same time. A good buyer won’t mind the second opinion.