HF 3028

as introduced - 87th Legislature (2011 - 2012) Posted on 04/24/2012 09:43am

A bill for an act
relating to mortgage lending; requiring lenders to make certain calculations prior
to foreclosure; proposing coding for new law in Minnesota Statutes, chapter 580.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [580.023] CERTAIN PREFORECLOSURE CALCULATIONS
REQUIRED.
new text end

new text begin A mortgage lender, prior to initiating a foreclosure of a mortgage on residential
property, has a duty of good faith and fair dealing to determine the net present value to the
lender of the mortgage loan if it were modified in any way so as to permit the homeowner
to retain the property, as compared to the net present value to the lender of foreclosure.
If there is any possible loan modification that would cause the net present value to the
lender of the modified loan to exceed the net present value of foreclosure, the lender has a
duty to make a good-faith offer to modify the loan. In calculating the net present value
of the alternatives, the lender shall use the same discount rate in both calculations. The
lender shall provide the calculations to the borrower prior to commencing foreclosure
and retain its calculations and analysis of the possible modifications, and records of the
lender's communications with the borrower about those calculations and analysis, for at
least six years.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2012, and applies to
foreclosures commenced on or after that date.
new text end