Question

Jim and Judy's Minnesota home was sold at a foreclosure sale. The sale didn't net the amount needed to pay off what Jim and Judy owe, but the lender can't take action to recoup the shortage from the couple. Which of these statements is most likely true?

A. Jim and Judy are still responsible for the remaining debt.
B. Jim and Judy are completely relieved of all obligations.
C. The lender can take legal action against Jim and Judy for the deficiency.
D. Jim and Judy can reclaim their home by paying the difference.

Answer 1

Minnesota has specific laws that prevent lenders from pursuing deficiency judgments after a foreclosure. Jim and Judy are relieved of remaining debt after their home was sold for less than they owed.

Step-by-step explanation:

If Jim and Judy's Minnesota home was sold at a foreclosure sale for less than the amount they owed, and the lender cannot take action to recoup the deficiency, the most likely explanation is that Minnesota is a non-recourse state or has specific laws that protect borrowers from being pursued for deficiency judgments after a foreclosure. This means that if the foreclosure sale does not net enough money to pay off what the homeowners owe, the homeowners are not responsible for the remaining debt. Therefore, the correct answer would be B. Jim and Judy are completely relieved of all obligations regarding the deficiency.