Minnesota Legislature
HF 1225
1st Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am
Bill Text Versions
| Engrossments | ||
|---|---|---|
| Introduction | Posted on 02/21/2007 | |
| 1st Engrossment | Posted on 04/02/2007 |
Current Version - 1st Engrossment
1.25 1.26
1.27 1.28 1.29 1.30 1.31 2.1 2.2 2.3 2.4 2.5 2.6 2.7
2.8
2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 2.32 2.33 2.34 2.35 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21
3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31 3.32 3.33 3.34 3.35 4.1 4.2 4.3 4.4 4.5
4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16
4.17 4.18 4.19 4.20 4.21 4.22 4.23 4.24 4.25 4.26 4.27 4.28 4.29 4.30 4.31 4.32 4.33 4.34 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 5.20 5.21 5.22 5.23 5.24 5.25 5.26 5.27 5.28 5.29 5.30 5.31 5.32 5.33 5.34 5.35 5.36 6.1 6.2 6.3 6.4
6.5 6.6 6.7 6.8 6.9 6.10
6.11 6.12 6.13 6.14
6.15 6.16 6.17 6.18 6.19 6.20 6.21 6.22 6.23
6.24 6.25 6.26 6.27
6.28 6.29 6.30 7.1 7.2
7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11 7.12 7.13 7.14 7.15 7.16 7.17 7.18 7.19 7.20 7.21 7.22 7.23 7.24 7.25 7.26 7.27 7.28 7.29 7.30 7.31 7.32 7.33 7.34 7.35 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 8.10 8.11 8.12 8.13 8.14 8.15 8.16 8.17 8.18 8.19 8.20 8.21 8.22 8.23 8.24 8.25 8.26 8.27 8.28 8.29 8.30 8.31 8.32 8.33 8.34 8.35 8.36 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10 9.11 9.12 9.13 9.14 9.15 9.16 9.17 9.18 9.19 9.20 9.21 9.22 9.23 9.24 9.25 9.26 9.27 9.28
9.29 9.30 9.31 9.32 9.33 9.34 9.35 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 10.10 10.11 10.12 10.13 10.14 10.15 10.16 10.17 10.18 10.19 10.20 10.21 10.22 10.23 10.24 10.25 10.26 10.27 10.28 10.29 10.30 10.31 10.32 10.33 10.34 10.35 10.36 10.37 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 11.10 11.11 11.12 11.13 11.14 11.15 11.16 11.17 11.18 11.19 11.20 11.21 11.22 11.23 11.24 11.25 11.26
11.27 11.28 11.29 11.30 11.31 11.32 11.33 11.34 11.35 11.36 11.37 11.38 11.39 11.40 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9
12.10 12.11 12.12 12.13 12.14 12.15 12.16 12.17 12.18 12.19 12.20 12.21 12.22 12.23
12.24 12.25 12.26 12.27 12.28 12.29 12.30 12.31 12.32
13.1 13.2 13.3 13.4 13.5 13.6 13.7
13.8 13.9 13.10 13.11 13.12 13.13 13.14 13.15 13.16 13.17 13.18 13.19 13.20 13.21 13.22 13.23 13.24 13.25 13.26 13.27
13.28 13.29 13.30 13.31 13.32 13.33 14.1 14.2 14.3 14.4 14.5 14.6 14.7 14.8 14.9 14.10 14.11 14.12 14.13 14.14 14.15 14.16 14.17 14.18 14.19 14.20 14.21 14.22 14.23 14.24 14.25 14.26 14.27 14.28 14.29 14.30 14.31 14.32 14.33 14.34 14.35 14.36 14.37 14.38 14.39 14.40 14.41 14.42 14.43 14.44 15.1 15.2 15.3 15.4 15.5 15.6
15.7 15.8 15.9 15.10 15.11 15.12 15.13 15.14 15.15 15.16 15.17 15.18 15.19 15.20 15.21 15.22 15.23 15.24 15.25 15.26 15.27 15.28 15.29 15.30 15.31 15.32 15.33 16.1 16.2 16.3 16.4 16.5 16.6 16.7 16.8 16.9 16.10 16.11 16.12 16.13 16.14 16.15 16.16 16.17 16.18 16.19 16.20 16.21 16.22 16.23 16.24 16.25 16.26 16.27 16.28 16.29 16.30 16.31 16.32 16.33 16.34 16.35 16.36 17.1 17.2 17.3 17.4 17.5 17.6 17.7 17.8 17.9 17.10 17.11 17.12 17.13 17.14 17.15 17.16 17.17 17.18 17.19 17.20 17.21 17.22 17.23 17.24 17.25 17.26 17.27 17.28 17.29 17.30 17.31 17.32 17.33 17.34 17.35 18.1 18.2 18.3 18.4 18.5 18.6 18.7 18.8 18.9 18.10 18.11 18.12 18.13 18.14 18.15 18.16 18.17 18.18 18.19 18.20 18.21 18.22 18.23
18.24 18.25 18.26 18.27 18.28 18.29 18.30 18.31 18.32 18.33 18.34 18.35 19.1 19.2 19.3 19.4 19.5 19.6 19.7 19.8 19.9 19.10 19.11 19.12 19.13 19.14 19.15 19.16 19.17 19.18 19.19 19.20 19.21 19.22 19.23
19.24 19.25 19.26 19.27
19.28 19.29 19.30
19.31 19.32
20.1 20.2
20.3 20.4 20.5 20.6 20.7 20.8 20.9 20.10
20.11 20.12 20.13 20.14 20.15
20.16 20.17 20.18 20.19 20.20
20.21 20.22 20.23 20.24 20.25
20.26 20.27 20.28 20.29 20.30 21.1 21.2 21.3 21.4 21.5 21.6 21.7 21.8 21.9 21.10 21.11 21.12 21.13 21.14 21.15 21.16 21.17 21.18 21.19 21.20 21.21 21.22 21.23 21.24 21.25 21.26 21.27 21.28 21.29 21.30 21.31 21.32 21.33 21.34 21.35 22.1 22.2 22.3 22.4 22.5 22.6 22.7 22.8 22.9 22.10 22.11 22.12 22.13 22.14 22.15 22.16 22.17 22.18 22.19 22.20 22.21 22.22 22.23 22.24 22.25 22.26 22.27 22.28 22.29 22.30 22.31 22.32 22.33 22.34 22.35 22.36 23.1 23.2 23.3 23.4 23.5 23.6 23.7 23.8 23.9 23.10 23.11 23.12 23.13 23.14 23.15 23.16 23.17 23.18 23.19 23.20 23.21 23.22 23.23 23.24 23.25 23.26 23.27 23.28 23.29 23.30 23.31 23.32 23.33 23.34 23.35 23.36 24.1 24.2 24.3 24.4 24.5 24.6 24.7 24.8 24.9 24.10 24.11 24.12 24.13
24.14 24.15 24.16 24.17 24.18 24.19 24.20 24.21 24.22 24.23 24.24 24.25 24.26 24.27 24.28 24.29 24.30 24.31 24.32 24.33 24.34 24.35 25.1 25.2 25.3
25.4 25.5 25.6 25.7 25.8 25.9 25.10 25.11 25.12 25.13 25.14 25.15 25.16 25.17 25.18 25.19 25.20 25.21 25.22 25.23 25.24 25.25 25.26 25.27 25.28 25.29 25.30 25.31 25.32 25.33 25.34 25.35 26.1 26.2 26.3 26.4 26.5 26.6 26.7 26.8 26.9 26.10 26.11 26.12 26.13 26.14 26.15 26.16 26.17 26.18 26.19 26.20 26.21 26.22 26.23 26.24 26.25 26.26 26.27 26.28 26.29
26.30 26.31 26.32 26.33 26.34 26.35 27.1 27.2 27.3 27.4 27.5 27.6 27.7 27.8 27.9 27.10 27.11 27.12 27.13 27.14 27.15 27.16 27.17 27.18 27.19 27.20
27.21 27.22 27.23 27.24 27.25 27.26 27.27 27.28
27.29 27.30 27.31 27.32 27.33
28.1 28.2 28.3 28.4 28.5 28.6 28.7 28.8 28.9 28.10 28.11 28.12 28.13 28.14 28.15 28.16 28.17 28.18 28.19 28.20 28.21 28.22 28.23 28.24 28.25 28.26 28.27 28.28
28.29 28.30 28.31 28.32 28.33 28.34 28.35 29.1 29.2 29.3 29.4 29.5 29.6 29.7 29.8 29.9 29.10 29.11 29.12 29.13 29.14 29.15
29.16 29.17 29.18 29.19 29.20 29.21 29.22 29.23 29.24 29.25 29.26 29.27 29.28 29.29 29.30 29.31 29.32
30.1 30.2
30.3 30.4 30.5 30.6 30.7 30.8 30.9 30.10 30.11 30.12 30.13 30.14 30.15 30.16 30.17 30.18
30.19 30.20 30.21 30.22 30.23 30.24 30.25 30.26 30.27 30.28 30.29 30.30 30.31 30.32 30.33 31.1 31.2 31.3 31.4 31.5 31.6 31.7 31.8 31.9 31.10 31.11 31.12 31.13 31.14 31.15 31.16 31.17 31.18 31.19 31.20 31.21 31.22 31.23 31.24 31.25 31.26 31.27 31.28 31.29
31.30 31.31 31.32 31.33 31.34 31.35 32.1 32.2 32.3 32.4 32.5 32.6 32.7 32.8 32.9 32.10 32.11 32.12 32.13 32.14 32.15 32.16 32.17 32.18 32.19 32.20 32.21 32.22 32.23 32.24 32.25 32.26 32.27 32.28 32.29 32.30 32.31 32.32 32.33 32.34 32.35 32.36 33.1 33.2 33.3 33.4 33.5 33.6 33.7 33.8
33.9 33.10 33.11 33.12 33.13 33.14 33.15 33.16 33.17 33.18 33.19 33.20 33.21 33.22 33.23 33.24 33.25 33.26 33.27 33.28 33.29 33.30 33.31 33.32 33.33 33.34 33.35 34.1 34.2 34.3 34.4 34.5 34.6 34.7 34.8 34.9 34.10 34.11 34.12 34.13 34.14 34.15 34.16 34.17 34.18 34.19 34.20 34.21 34.22 34.23 34.24 34.25 34.26 34.27 34.28 34.29 34.30 34.31 34.32 34.33 34.34 34.35 34.36 35.1 35.2 35.3 35.4 35.5 35.6 35.7 35.8 35.9 35.10 35.11 35.12 35.13 35.14 35.15 35.16 35.17 35.18 35.19 35.20 35.21 35.22 35.23 35.24 35.25 35.26 35.27 35.28 35.29 35.30 35.31 35.32 35.33 35.34 35.35 35.36 36.1 36.2 36.3 36.4 36.5 36.6 36.7 36.8 36.9 36.10 36.11 36.12 36.13 36.14 36.15 36.16
36.17 36.18 36.19 36.20 36.21 36.22 36.23 36.24 36.25 36.26 36.27 36.28 36.29 36.30 36.31 36.32 36.33 36.34 37.1 37.2
37.3 37.4 37.5 37.6 37.7 37.8 37.9 37.10 37.11 37.12 37.13 37.14 37.15 37.16 37.17 37.18 37.19 37.20
37.21 37.22 37.23 37.24 37.25 37.26 37.27 37.28 37.29 37.30 37.31 37.32 37.33 37.34 38.1 38.2 38.3 38.4 38.5 38.6 38.7 38.8 38.9 38.10 38.11 38.12 38.13 38.14 38.15
38.16 38.17 38.18 38.19 38.20 38.21 38.22 38.23 38.24 38.25 38.26 38.27 38.28 38.29 38.30 38.31 38.32 38.33 38.34 38.35 39.1 39.2 39.3 39.4 39.5 39.6 39.7 39.8 39.9 39.10 39.11 39.12 39.13 39.14
39.15 39.16 39.17 39.18 39.19 39.20 39.21 39.22 39.23
39.24 39.25 39.26 39.27 39.28 39.29 39.30
39.31 39.32 39.33 40.1 40.2 40.3 40.4 40.5
40.6 40.7 40.8 40.9 40.10 40.11 40.12 40.13 40.14 40.15 40.16 40.17 40.18 40.19 40.20 40.21 40.22 40.23 40.24
40.25 40.26 40.27 40.28 40.29 40.30 40.31 40.32 40.33 40.34 41.1 41.2 41.3 41.4 41.5 41.6 41.7 41.8 41.9 41.10 41.11 41.12 41.13 41.14 41.15 41.16 41.17 41.18 41.19 41.20 41.21 41.22 41.23
41.24 41.25 41.26 41.27 41.28 41.29 41.30 41.31
41.32 41.33 41.34 42.1 42.2 42.3 42.4 42.5 42.6 42.7 42.8 42.9 42.10 42.11 42.12 42.13 42.14
42.15 42.16 42.17 42.18 42.19 42.20 42.21 42.22 42.23 42.24 42.25
42.26 42.27 42.28 42.29 42.30 42.31 42.32 42.33 42.34
43.1 43.2 43.3 43.4 43.5 43.6 43.7 43.8 43.9 43.10 43.11 43.12 43.13 43.14 43.15 43.16 43.17 43.18 43.19 43.20 43.21 43.22 43.23
43.24 43.25 43.26 43.27 43.28 43.29 43.30 43.31 43.32 43.33 43.34 43.35 44.1 44.2 44.3 44.4 44.5 44.6 44.7 44.8
44.9 44.10 44.11 44.12 44.13 44.14 44.15 44.16 44.17 44.18 44.19 44.20 44.21 44.22 44.23 44.24 44.25 44.26 44.27 44.28 44.29 44.30 44.31 44.32 44.33 44.34 44.35 45.1 45.2 45.3 45.4 45.5 45.6 45.7 45.8 45.9 45.10 45.11 45.12 45.13 45.14 45.15 45.16 45.17
45.18 45.19 45.20
45.21 45.22 45.23 45.24
A bill for an act
relating to commerce; prohibiting the sale of certain mortgage information;
modifying residential mortgage lending licensing and education requirements;
providing examination powers to the commissioner; regulating certain
transactions with homeowners whose homes are in foreclosure; prohibiting
certain predatory mortgage lending practices; regulating recovery for breaches of
statutory housing warranties; permitting victims of domestic abuse to terminate a
lease in certain circumstances; modifying the limitation on actions for damages
based on services or construction to improve real property for certain actions;
regulating homestead property; prescribing criminal penalties; providing
remedies; amending Minnesota Statutes 2006, sections 13C.01, by adding a
subdivision; 58.02, by adding subdivisions; 58.04, subdivisions 1, 2; 58.05;
58.06, subdivision 2, by adding a subdivision; 58.08, subdivision 3; 58.10,
subdivision 1; 58.13, subdivision 1; 58.137, subdivisions 1, 2; 58.15; 58.16,
subdivision 1, by adding a subdivision; 325N.01; 325N.03; 325N.04; 325N.10,
subdivisions 3, 4, by adding a subdivision; 325N.13; 325N.14; 325N.17;
325N.18, by adding a subdivision; 327A.05; 505.01; 505.03, subdivision
1; 505.04; 505.08, subdivision 2; 505.1792, subdivision 2; 510.02; 510.05;
541.051, subdivision 2; 550.175, subdivisions 1, 4, by adding a subdivision;
550.18; 550.19; 550.22; 550.24; 580.24; Laws 2004, chapter 263, section 26;
proposing coding for new law in Minnesota Statutes, chapters 58; 82B; 504B;
505; 550; repealing Minnesota Statutes 2006, sections 58.08, subdivision 1;
505.02; 505.08, subdivisions 1, 2a, 3.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
MORTGAGES
Section 1.
Minnesota Statutes 2006, section 13C.01, is amended by adding a
subdivision to read:
new text begin Subd. 3. new text end
new text begin Sale of certain information prohibited. new text end
new text begin
A consumer reporting agency or
any other business entity may not sell to, or exchange with, a third party, the existence
of a credit inquiry arising from a consumer mortgage loan application, unless the third
party holds an existing mortgage loan on the property. This subdivision does not apply
to information provided by a mortgage originator or servicer to a third party providing
services in connection with the mortgage loan origination or servicing; a proposed or
actual securitization; secondary market sale, including sales of servicing rights; or similar
transaction related to the consumer mortgage loan. For purposes of this subdivision, "third
party" does not include an affiliate of the consumer reporting agency or other business
entity.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective August 1, 2007.
new text end
Sec. 2.
Minnesota Statutes 2006, section 58.04, subdivision 1, is amended to read:
Subdivision 1.
Residential mortgage originator licensing requirements.
(a)
deleted text begin Beginning August 1, 1999,deleted text end No person shall act as a residential mortgage originator, or
make residential mortgage loans without first obtaining a license from the commissioner
according to the licensing procedures provided in this chapter.
(b) new text begin A licensee must be either a partnership, limited liability partnership, association,
limited liability company, corporation, or other form of business organization, and must
have and maintain at all times one of the following: (1) approval as a mortgagee by
either the federal Department of Housing and Urban Development or the Federal National
Mortgage Association; (2) a minimum net worth, net of intangibles, of at least $250,000;
or (3) a surety bond or irrevocable letter of credit in the amount of $100,000. Net worth,
net of intangibles, must be calculated in accordance with generally accepted accounting
principles.
new text end
new text begin (c) new text end The following persons are exempt from the residential mortgage originator
licensing requirements:
deleted text begin
(1) an employee of one mortgage originator licensee or one person holding a
certificate of exemption;
deleted text end
deleted text begin
(2) a person licensed as a real estate broker under chapter 82 who is not licensed to
another real estate broker;
deleted text end
deleted text begin
(3) an individual real estate licensee who is licensed to a real estate broker as
described in clause (2) if:
deleted text end
deleted text begin
(i) the individual licensee acts only under the name, authority, and supervision of the
broker to whom the licensee is licensed;
deleted text end
deleted text begin
(ii) the broker to whom the licensee is licensed obtains a certificate of exemption
according to section deleted text begin 58.05, subdivision 2deleted text end ;
deleted text end
deleted text begin
(iii) the broker does not collect an advance fee for its residential mortgage-related
activities; and
deleted text end
deleted text begin
(iv) the residential mortgage origination activities are incidental to the real estate
licensee's primary activities as a real estate broker or salesperson;
deleted text end
deleted text begin
(4) an individual licensed as a property/casualty or life/health insurance agent under
chapter 60K if:
deleted text end
deleted text begin
(i) the insurance agent acts on behalf of only one residential mortgage originator,
which is in compliance with chapter 58;
deleted text end
deleted text begin
(ii) the insurance agent has entered into a written contract with the mortgage
originator under the terms of which the mortgage originator agrees to accept responsibility
for the insurance agent's residential mortgage-related activities;
deleted text end
deleted text begin
(iii) the insurance agent obtains a certificate of exemption under section deleted text begin 58.05,
subdivision 2deleted text end ; and
deleted text end
deleted text begin
(iv) the insurance agent does not collect an advance fee for the insurance agent's
residential mortgage-related activities;
deleted text end
deleted text begin (5)deleted text end new text begin (1) new text end a person who is not in the business of making residential mortgage loans and
who makes no more than three such loans, with its own funds, during any 12-month period;
deleted text begin (6)deleted text end new text begin (2) new text end a financial institution as defined in section 58.02, subdivision 10;
deleted text begin (7)deleted text end new text begin (3) new text end an agency of the federal government, or of a state or municipal government;
deleted text begin (8)deleted text end new text begin (4) new text end an employee or employer pension plan making loans only to its participants;
deleted text begin (9)deleted text end new text begin (5) new text end a person acting in a fiduciary capacity, such as a trustee or receiver, as a result
of a specific order issued by a court of competent jurisdiction; or
deleted text begin (10)deleted text end new text begin (6) new text end a person exempted by order of the commissioner.
Sec. 3.
Minnesota Statutes 2006, section 58.04, subdivision 2, is amended to read:
Subd. 2.
Residential mortgage servicer licensing requirements.
(a) deleted text begin Beginning
August 1, 1999,deleted text end No person shall engage in activities or practices that fall within the
definition of "servicing a residential mortgage loan" under section 58.02, subdivision
22, without first obtaining a license from the commissioner according to the licensing
procedures provided in this chapter.
(b) The following persons are exempt from the residential mortgage servicer
licensing requirements:
(1) a person licensed as a residential mortgage originator;
deleted text begin
(2) an employee of one licensee or one person holding a certificate of exemption
based on an exemption under this subdivision;
deleted text end
deleted text begin (3)deleted text end new text begin (2) new text end a person servicing loans made with its own funds, if no more than three such
loans are made in any 12-month period;
deleted text begin (4)deleted text end new text begin (3) new text end a financial institution as defined in section 58.02, subdivision 10;
deleted text begin (5)deleted text end new text begin (4) new text end an agency of the federal government, or of a state or municipal government;
deleted text begin (6)deleted text end new text begin (5) new text end an employee or employer pension plan making loans only to its participants;
deleted text begin (7)deleted text end new text begin (6) new text end a person acting in a fiduciary capacity, such as a trustee or receiver, as a result
of a specific order issued by a court of competent jurisdiction; or
deleted text begin (8)deleted text end new text begin (7) new text end a person exempted by order of the commissioner.
Sec. 4.
Minnesota Statutes 2006, section 58.05, is amended to read:
58.05 EXEMPTIONS FROM LICENSE.
Subdivision 1.
Exempt person.
An exempt person as defined by section 58.04,
subdivision 1, paragraph deleted text begin (b)deleted text end new text begin (c)new text end , and subdivision 2, paragraph (b), is exempt from the
licensing requirements of this chapter, but is subject to all other provisions of this chapter.
Subd. 3.
Certificate of exemption.
A person must obtain a certificate of exemption
from the commissioner to qualify as an exempt person under section 58.04, subdivision
1, paragraph deleted text begin (b)deleted text end new text begin (c)new text end , deleted text begin as a real estate broker under clause (2), an insurance agent under
clause (4),deleted text end a financial institution under clause deleted text begin (6)deleted text end new text begin (2)new text end , or by order of the commissioner
under clause deleted text begin (10)deleted text end new text begin (6)new text end ; or under section 58.04, subdivision 2, paragraph (b), as a financial
institution under clause deleted text begin (4)deleted text end new text begin (3)new text end , or by order of the commissioner under clause deleted text begin (8)deleted text end new text begin (7)new text end .
Sec. 5.
Minnesota Statutes 2006, section 58.06, subdivision 2, is amended to read:
Subd. 2.
Application contents.
new text begin (a) new text end The application must contain the name and
complete business address or addresses of the license applicant. deleted text begin Ifdeleted text end The license applicant deleted text begin isdeleted text end
new text begin must be new text end a partnership, limited liability partnership, association, limited liability company,
corporation, or other form of business organization, new text begin and new text end the application must contain the
names and complete business addresses of each partner, member, director, and principal
officer. The application must also include a description of the activities of the license
applicant, in the detail and for the periods the commissioner may require.
new text begin
(b) An applicant must submit one of the following:
new text end
new text begin
(1) evidence which shows, to the commissioner's satisfaction, that either the federal
Department of Housing and Urban Development or the Federal National Mortgage
Association has approved the applicant as a mortgagee;
new text end
new text begin
(2) a surety bond or irrevocable letter of credit in the amount of not less than
$100,000 in a form approved by the commissioner, issued by an insurance company
or bank authorized to do so in this state. The bond or irrevocable letter of credit must
be available for the recovery of expenses, fines, and fees levied by the commissioner
under this chapter and for losses incurred by borrowers. The bond or letter of credit must
be submitted with the license application, and evidence of continued coverage must be
submitted with each renewal. Any change in the bond or letter of credit must be submitted
for approval by the commissioner within ten days of its execution; or
new text end
new text begin
(3) a copy of the applicant's most recent audited financial statement, including
balance sheet, statement of income or loss, statements of changes in shareholder equity,
and statement of changes in financial position. Financial statements must be dated within
12 months of the date of application.
new text end
new text begin (c) new text end The application must also include all of the following:
deleted text begin (a)deleted text end new text begin (1) new text end an affirmation under oath that the applicant:
deleted text begin (1) will maintain competent staff and adequate staffing levels, through direct
employees or otherwise, to meet the requirements of this chapterdeleted text end new text begin (i) is in compliance
with the requirements of section 58.125new text end ;
new text begin
(ii) will maintain a perpetual roster of individuals employed as residential mortgage
originators, including employees and independent contractors, which includes the date that
mandatory initial education was completed. In addition, the roster must be made available
to the commissioner on demand, within three business days of the commissioner's request;
new text end
deleted text begin (2)deleted text end new text begin (iii) new text end will advise the commissioner of any material changes to the information
submitted in the most recent application within ten days of the change;
deleted text begin (3)deleted text end new text begin (iv) new text end will advise the commissioner in writing immediately of any bankruptcy
petitions filed against or by the applicant or licensee;
deleted text begin (4) is financially solventdeleted text end new text begin (v) will maintain at all times either a net worth, net of
intangibles, of at least $250,000 or a surety bond or irrevocable letter of credit in the
amount of at least $100,000new text end ;
deleted text begin (5)deleted text end new text begin (vi) new text end complies with federal and state tax laws;new text begin and
new text end
deleted text begin (6)deleted text end new text begin (vii) new text end complies with sections 345.31 to 345.60, the Minnesota unclaimed property
law; deleted text begin anddeleted text end
deleted text begin
(7) is, or that a person in control of the license applicant is, at least 18 years of age;
deleted text end
deleted text begin (b)deleted text end new text begin (2) new text end information as to the mortgage lending, servicing, or brokering experience
of the applicant and persons in control of the applicant;
deleted text begin (c)deleted text end new text begin (3) new text end information as to criminal convictions, excluding traffic violations, of persons
in control of the license applicant;
deleted text begin (d)deleted text end new text begin (4) new text end whether a court of competent jurisdiction has found that the applicant or
persons in control of the applicant have engaged in conduct evidencing gross negligence,
fraud, misrepresentation, or deceit in performing an act for which a license is required
under this chapter;
deleted text begin (e)deleted text end new text begin (5) new text end whether the applicant or persons in control of the applicant have been the
subject of: an order of suspension or revocation, cease and desist order, or injunctive
order, or order barring involvement in an industry or profession issued by this or another
state or federal regulatory agency or by the Secretary of Housing and Urban Development
within the ten-year period immediately preceding submission of the application; and
deleted text begin (f)deleted text end new text begin (6) new text end other information required by the commissioner.
Sec. 6.
Minnesota Statutes 2006, section 58.06, is amended by adding a subdivision to
read:
new text begin Subd. 3. new text end
new text begin Waiver. new text end
new text begin
The commissioner may, for good cause shown, waive any
requirement of this section with respect to any license application or to permit a license
applicant to submit substituted information in its license application in lieu of the
information required by this section.
new text end
Sec. 7.
Minnesota Statutes 2006, section 58.08, subdivision 3, is amended to read:
Subd. 3.
Exemption.
deleted text begin Subdivisions 1 anddeleted text end new text begin Subdivision new text end 2 deleted text begin dodeleted text end new text begin does new text end not apply to
mortgage originators or mortgage servicers who are approved as seller/servicers by the
Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.
Sec. 8.
Minnesota Statutes 2006, section 58.10, subdivision 1, is amended to read:
Subdivision 1.
Amounts.
The following fees must be paid to the commissioner:
(1) for an initial residential mortgage originator license, deleted text begin $850deleted text end new text begin $2,550new text end , $50 of which
is credited to the consumer education account in the special revenue fund;
(2) for a renewal license, deleted text begin $450deleted text end new text begin $1,350new text end , $50 of which is credited to the consumer
education account in the special revenue fund;
(3) for an initial residential mortgage servicer's license, $1,000;
(4) for a renewal license, $500; and
(5) for a certificate of exemption, $100.
Sec. 9.
new text begin
[58.115] EXAMINATIONS.
new text end
new text begin
The commissioner has under this chapter the same powers with respect to
examinations that the commissioner has under section 46.04, including the authority to
charge for the direct costs of the examination, including travel and per diem expenses.
new text end
Sec. 10.
new text begin
[58.126] EDUCATION REQUIREMENT.
new text end
new text begin
No individual shall engage in residential mortgage origination or make residential
mortgage loans, whether as an employee or independent contractor, before the completion
of 15 hours of educational training which has been approved by the commissioner, and
covering state and federal laws concerning residential mortgage lending.
new text end
Sec. 11.
Minnesota Statutes 2006, section 325N.01, is amended to read:
325N.01 DEFINITIONS.
The definitions in paragraphs (a) to (h) apply to sections 325N.01 to 325N.09.
(a) "Foreclosure consultant" means any person who, directly or indirectly, makes
any solicitation, representation, or offer to any owner to perform for compensation or
who, for compensation, performs any service which the person in any manner represents
will in any manner do any of the following:
(1) stop or postpone the foreclosure sale;
(2) obtain any forbearance from any beneficiary or mortgagee;
(3) assist the owner to exercise the right of reinstatement provided in section 580.30;
(4) obtain any extension of the period within which the owner may reinstate the
owner's obligation;
(5) obtain any waiver of an acceleration clause contained in any promissory note or
contract secured by a mortgage on a residence in foreclosure or contained in the mortgage;
(6) assist the owner in foreclosure or loan default to obtain a loan or advance
of funds;
(7) avoid or ameliorate the impairment of the owner's credit resulting from the
recording of a notice of default or the conduct of a foreclosure sale; or
(8) save the owner's residence from foreclosure.
(b) A foreclosure consultant does not include any of the following:
(1) a person licensed to practice law in this state when the person renders service
in the course of his or her practice as an attorney-at-law;
(2) a person licensed as a debt prorater under sections 332.12 to 332.29, when the
person is acting as a debt prorater as defined in these sections;
(3) a person licensed as a real estate broker or salesperson under chapter 82 when the
person engages in acts whose performance requires licensure under that chapter unless the
person is engaged in offering services designed to, or purportedly designed to, enable the
owner to retain possession of the residence in foreclosure;
(4) a person licensed as an accountant under chapter 326A when the person is acting
in any capacity for which the person is licensed under those provisions;
(5) a person or the person's authorized agent acting under the express authority
or written approval of the Department of Housing and Urban Development or other
department or agency of the United States or this state to provide services;
(6) a person who holds or is owed an obligation secured by a lien on any residence
in foreclosure when the person performs services in connection with this obligation or lien
if the obligation or lien did not arise as the result of or as part of a proposed foreclosure
reconveyance;
(7) any person or entity doing business under any law of this state, or of the United
States relating to banks, trust companies, savings and loan associations, industrial loan and
thrift companies, regulated lenders, credit unions, insurance companies, or a mortgagee
which is a United States Department of Housing and Urban Development approved
mortgagee and any subsidiary or affiliate of these persons or entities, and any agent or
employee of these persons or entities while engaged in the business of these persons
or entities;
(8) a person licensed as a residential mortgage originator or servicer pursuant to
chapter 58, when acting under the authority of that license deleted text begin or a foreclosure purchaser as
defined in section 325N.10deleted text end ;
(9) a nonprofit agency or organization that offers counseling or advice to an owner
of a home in foreclosure or loan default if they do not contract for services with for-profit
lenders or foreclosure purchasers; deleted text begin and
deleted text end
(10) a judgment creditor of the owner, to the extent that the judgment creditor's claim
accrued prior to the personal service of the foreclosure notice required by section 580.03,
but excluding a person who purchased the claim after such personal servicenew text begin ; and
new text end
new text begin (11) a foreclosure purchaser as defined in section 325N.10new text end .
(c) "Foreclosure reconveyance" means a transaction involving:
(1) the transfer of title to real property by a foreclosed homeowner during a
foreclosure proceeding, either by transfer of interest from the foreclosed homeowner or
by creation of a mortgage or other lien or encumbrance during the foreclosure process
that allows the acquirer to obtain title to the property by redeeming the property as
a junior lienholder; and
(2) the subsequent conveyance, or promise of a subsequent conveyance, of
an interest back to the foreclosed homeowner by the acquirer or a person acting in
participation with the acquirer that allows the foreclosed homeowner to possess new text begin either
new text end the new text begin residence in foreclosure or any other new text end real property deleted text begin following the completion of the
foreclosure proceedingdeleted text end , which interest includes, but is not limited to, an interest in a
contract for deed, purchase agreement, option to purchase, or lease.
(d) "Person" means any individual, partnership, corporation, limited liability
company, association, or other group, however organized.
(e) "Service" means and includes, but is not limited to, any of the following:
(1) debt, budget, or financial counseling of any type;
(2) receiving money for the purpose of distributing it to creditors in payment or
partial payment of any obligation secured by a lien on a residence in foreclosure;
(3) contacting creditors on behalf of an owner of a residence in foreclosure;
(4) arranging or attempting to arrange for an extension of the period within which
the owner of a residence in foreclosure may cure the owner's default and reinstate his or
her obligation pursuant to section 580.30;
(5) arranging or attempting to arrange for any delay or postponement of the time of
sale of the residence in foreclosure;
(6) advising the filing of any document or assisting in any manner in the preparation
of any document for filing with any bankruptcy court; or
(7) giving any advice, explanation, or instruction to an owner of a residence in
foreclosure, which in any manner relates to the cure of a default in or the reinstatement
of an obligation secured by a lien on the residence in foreclosure, the full satisfaction of
that obligation, or the postponement or avoidance of a sale of a residence in foreclosure,
pursuant to a power of sale contained in any mortgage.
(f) "Residence in foreclosure" means residential real property consisting of one to
four family dwelling units, one of which the owner occupies as his or her principal place
of residence, deleted text begin and against which there is an outstanding notice of pendency of foreclosure,
recorded pursuant to section 580.032, or against which a summons and complaint has been
served under chapter 581deleted text end new text begin where there is a delinquency or default on any loan payment
or debt secured by or attached to the residential real property including, but not limited
to, contract for deed paymentsnew text end .
(g) "Owner" means the record owner of the residential real property in foreclosure at
the time the notice of pendency was recorded, or the summons and complaint served.
(h) "Contract" means any agreement, or any term in any agreement, between
a foreclosure consultant and an owner for the rendition of any service as defined in
paragraph (e).
Sec. 12.
Minnesota Statutes 2006, section 325N.03, is amended to read:
325N.03 CONTRACT.
(a) Every contract must be in writing and must fully disclose the exact nature of the
foreclosure consultant's services and the total amount and terms of compensation.
(b) The following notice, printed in at least 14-point boldface type and completed
with the name of the foreclosure consultant, must be printed immediately above the
statement required by paragraph (c):
"NOTICE REQUIRED BY MINNESOTA LAW
| ......................... (Name) or anyone working for him or her CANNOT: |
||
| (1) Take any money from you or ask you for money until ....................... (Name) has completely finished doing everything he or she said he or she would do; and |
||
| (2) Ask you to sign or have you sign any lien, mortgage, or deed." |
(c) The contract must be written in the same language as principally used by the
foreclosure consultant to describe his or her services or to negotiate the contract, must
be dated and signed by the owner, and must contain in immediate proximity to the space
reserved for the owner's signature a conspicuous statement in a size equal to at least
10-point boldface type, as follows:
"You, the owner, may cancel this transaction at any time prior to midnight of the
third business day after the date of this transaction. See the attached notice of
cancellation form for an explanation of this right."
(d) The new text begin notice of cancellation must contain, and the new text end contract must contain on the
first page, in a type size no smaller than that generally used in the body of the document,
each of the following:
(1) the name and new text begin physical new text end address of the foreclosure consultant to which the
notice of cancellation is to be mailednew text begin or otherwise delivered. A post office box does not
constitute a physical address. A post office box may be designated for delivery by mail
only if it is accompanied by a physical address at which the notice could be delivered by a
method other than mail. An e-mail address may be included, in addition to the physical
addressnew text end ; and
(2) the date the owner signed the contract.
(e) new text begin Cancellation occurs when the foreclosed homeowner delivers, by any means,
written notice of cancellation to the address specified in the contract. If cancellation is
mailed, delivery is effective upon mailing. If e-mailed, cancellation is effective upon
transmission. new text end The contract must be accompanied by a completed form in duplicate,
captioned "notice of cancellation," which must be attached to the contract, must be easily
detachable, and must contain in at least 10-point type the following statement written in
the same language as used in the contract:
"NOTICE OF CANCELLATION
|
.
|
||
| (Enter date of transaction) (Date) |
||
| You may cancel this transaction, without any penalty or obligation, within three business days from the above date. |
||
| To cancel this transaction, new text begin you may use any of the following methods: (1) new text end mail or new text begin otherwise new text end deliver a signed and dated copy of this cancellation notice, or any other written noticenew text begin of cancellation; or (2) e-mail a notice of cancellation new text end |
||
|
to
.
|
||
| (Name of foreclosure consultant) |
||
|
at
.
|
||
| (new text begin Physical new text end address of foreclosure consultant's place of business) |
||
|
.
|
||
|
new text begin
(E-mail address of foreclosure consultant's place of business) new text end |
||
|
NOT LATER THAN MIDNIGHT OF
.
|
||
| (Date) |
||
|
I hereby cancel this transaction
.
|
||
| (Date) |
||
|
.
|
||
| (Owner's signature)" |
(f) The foreclosure consultant shall provide the owner with a copy of the contract
and the attached notice of cancellation immediately upon execution of the contract.
(g) The three business days during which the owner may cancel the contract shall
not begin to run until the foreclosure consultant has complied with this section.
Sec. 13.
Minnesota Statutes 2006, section 325N.04, is amended to read:
325N.04 VIOLATIONS.
It is a violation for a foreclosure consultant to:
(1) claim, demand, charge, collect, or receive any compensation until after the
foreclosure consultant has fully performed each and every service the foreclosure
consultant contracted to perform or represented he or she would perform;
(2) claim, demand, charge, collect, or receive any fee, interest, or any other
compensation for any reason which exceeds eight percent per annum of the amount of
any loan which the foreclosure consultant may make to the ownernew text begin . Such a loan must not,
as provided in clause (3), be secured by the residence in foreclosure or any other real or
personal propertynew text end ;
(3) take any wage assignment, any lien of any type on real or personal property, or
other security to secure the payment of compensation. Any such security is void and
unenforceable;
(4) receive any consideration from any third party in connection with services
rendered to an owner unless the consideration is first fully disclosed to the owner;
(5) acquire any interest, directly or indirectly, or by means of a subsidiary or affiliate
in a residence in foreclosure from an owner with whom the foreclosure consultant has
contracted;
(6) take any power of attorney from an owner for any purpose, except to inspect
documents as provided by law; or
(7) induce or attempt to induce any owner to enter a contract which does not comply
in all respects with sections 325N.02 and 325N.03.
Sec. 14.
Minnesota Statutes 2006, section 325N.10, subdivision 3, is amended to read:
Subd. 3.
Foreclosure reconveyance.
"Foreclosure reconveyance" means a
transaction involving:
(1) the transfer of title to real property by a foreclosed homeowner during a
foreclosure proceeding, either by transfer of interest from the foreclosed homeowner or
by creation of a mortgage or other lien or encumbrance during the foreclosure process
that allows the acquirer to obtain title to the property by redeeming the property as
a junior lienholder; and
(2) the subsequent conveyance, or promise of a subsequent conveyance, of
an interest back to the foreclosed homeowner by the acquirer or a person acting in
participation with the acquirer that allows the foreclosed homeowner to possess new text begin either new text end the
new text begin residence in foreclosure or other new text end real property deleted text begin following the completion of the foreclosure
proceedingdeleted text end , which interest includes, but is not limited to, an interest in a contract for deed,
purchase agreement, option to purchase, or lease.
Sec. 15.
Minnesota Statutes 2006, section 325N.10, subdivision 4, is amended to read:
Subd. 4.
Foreclosure purchaser.
"Foreclosure purchaser" means a person that has
acted as the acquirer in deleted text begin more than onedeleted text end new text begin anew text end foreclosure reconveyance deleted text begin during any 24-month
perioddeleted text end . Foreclosure purchaser also includes a person that has acted in joint venture or joint
enterprise with one or more acquirers in deleted text begin more than onedeleted text end new text begin anew text end foreclosure reconveyance deleted text begin during
any 24-month perioddeleted text end . A new text begin foreclosure purchaser does not include: (i) a natural person
who shows that the natural person is not in the business of foreclosure purchasing and
has a prior personal relationship with the foreclosed homeowner, or (ii) a new text end federal or state
chartered bank, savings bank, thrift, or credit union deleted text begin is not a foreclosure purchaserdeleted text end .
Sec. 16.
Minnesota Statutes 2006, section 325N.10, is amended by adding a
subdivision to read:
new text begin Subd. 7. new text end
new text begin Residence in foreclosure. new text end
new text begin
"Residence in foreclosure" means residential
real property consisting of one to four family dwelling units, one of which the owner
occupies as the owner's principal place of residence, where there is a delinquency or
default on any loan payment or debt secured by or attached to the residential real property,
including, but not limited to, contract for deed payments.
new text end
Sec. 17.
Minnesota Statutes 2006, section 325N.13, is amended to read:
325N.13 CONTRACT CANCELLATION.
(a) In addition to any other right of rescission, the foreclosed homeowner has
the right to cancel any contract with a foreclosure purchaser until midnight of the fifth
business day following the day on which the foreclosed homeowner signs a contract that
complies with sections 325N.10 to 325N.15 or until 8:00 a.m. on the last day of the period
during which the foreclosed homeowner has a right of redemption, whichever occurs first.
(b) Cancellation occurs when the foreclosed homeowner delivers, by any means,
written notice of cancellation deleted text begin to the address specified in the contractdeleted text end new text begin , provided that, at a
minimum, the contract and the notice of cancellation must contain a physical address to
which notice of cancellation may be mailed or otherwise delivered. A post office box may
be designated for delivery by mail only if it is accompanied by a physical address at which
the notice could be delivered by a method other than mail. An e-mail address may be
provided in addition to the physical address. If cancellation is mailed, delivery is effective
upon mailing. If e-mailed, cancellation is effective upon transmissionnew text end .
(c) A notice of cancellation given by the foreclosed homeowner need not take the
particular form as provided with the contract.
(d) Within ten days following receipt of a notice of cancellation given in accordance
with this section, the foreclosure purchaser shall return without condition any original
contract and any other documents signed by the foreclosed homeowner.
Sec. 18.
Minnesota Statutes 2006, section 325N.14, is amended to read:
325N.14 NOTICE OF CANCELLATION.
(a) The contract must contain in immediate proximity to the space reserved for the
foreclosed homeowner's signature a conspicuous statement in a size equal to at least
14-point boldface type, if the contract is printed, or in capital letters, if the contract is
typed, as follows:
| "You may cancel this contract for the sale of your house without any penalty or obligation at any time before |
||
|
.
|
||
| (Date and time of day) |
||
| See the attached notice of cancellation form for an explanation of this right." |
The foreclosure purchaser shall accurately enter the date and time of day on which the
cancellation right ends.
(b) The contract must be accompanied by a completed form in duplicate, captioned
"notice of cancellation" in a size equal to a 12-point boldface type if the contract is
printed, or in capital letters, if the contract is typed, followed by a space in which the
foreclosure purchaser shall enter the date on which the foreclosed homeowner executes
deleted text begin anydeleted text end new text begin thenew text end contract. This form must be attached to the contract, must be easily detachable,
and must contain in type of at least 10 points, if the contract is printed or in capital
letters if the contract is typed, the following statement written in the same language as
used in the contract:
"NOTICE OF CANCELLATION
|
.
|
||
| (Enter date contract signed) |
||
| You may cancel this contract for the sale of your house, without any penalty or obligation, at any time before |
||
|
.
|
||
| (Enter date and time of day) |
||
| To cancel this transaction, deleted text begin personallydeleted text end new text begin you may use any of the following methods: (1) mail or otherwise new text end deliver a signed and dated copy of this cancellation noticenew text begin ; or (2) e-mail a notice of cancellationnew text end to |
||
|
.
|
||
| (Name of purchaser) |
||
|
at
.
|
||
| (deleted text begin Streetdeleted text end new text begin Physical new text end address of purchaser's place of business) |
||
|
.
|
||
|
new text begin
(E-mail address of foreclosure consultant's place of business) new text end |
||
|
NOT LATER THAN
.
|
||
| (Enter date and time of day) |
||
|
I hereby cancel this transaction
.
|
||
| (Date) |
||
|
.
|
||
| (Seller's signature)" |
(c) The foreclosure purchaser shall provide the foreclosed homeowner with a copy
of the contract and the attached notice of cancellation at the time the contract is executed
by all parties.
(d) The five business days during which the foreclosed homeowner may cancel the
contract must not begin to run until all parties to the contract have executed the contract
and the foreclosure purchaser has complied with this section.
Sec. 19.
Minnesota Statutes 2006, section 325N.17, is amended to read:
325N.17 PROHIBITED PRACTICES.
A foreclosure purchaser shall not:
(a) enter into, or attempt to enter into, a foreclosure reconveyance with a foreclosed
homeowner unless:
(1) the foreclosure purchaser verifies and can demonstrate that the foreclosed
homeowner has a reasonable ability to pay for the subsequent conveyance of an interest
back to the foreclosed homeowner. In the case of a lease with an option to purchase,
payment ability also includes the reasonable ability to make the lease payments and
purchase the property within the term of the option to purchase. There is a rebuttable
presumption that a homeowner is reasonably able to pay for the subsequent conveyance
if the owner's payments for primary housing expenses and regular principal and interest
payments on other personal debt, on a monthly basis, do not exceed 60 percent of
the owner's monthly gross income. For the purposes of this section, "primary housing
expenses" means the sum of payments for regular principal, interest, rent, utilities, hazard
insurance, real estate taxes, and association dues. There is a rebuttable presumption that
the foreclosure purchaser has not verified reasonable payment ability if the foreclosure
purchaser has not obtained documents other than a statement by the foreclosed homeowner
of assets, liabilities, and income;
(2) the foreclosure purchaser and the foreclosed homeowner complete a closing
for any foreclosure reconveyance in which the foreclosure purchaser obtains a deed or
mortgage from a foreclosed homeowner. For purposes of this section, "closing" means an
in-person meeting to complete final documents incident to the sale of the real property
or creation of a mortgage on the real property conducted by a closing agent, as defined
in section 82.17, who is not employed by or an affiliate of the foreclosure purchasernew text begin , or
employed by such an affiliate, and who does not have a business or personal relationship
with the foreclosure purchaser other than the provision of real estate settlement servicesnew text end ;
(3) the foreclosure purchaser obtains the written consent of the foreclosed
homeowner to a grant by the foreclosure purchaser of any interest in the property during
such times as the foreclosed homeowner maintains any interest in the property; and
(4) the foreclosure purchaser complies with the requirements deleted text begin ofdeleted text end new text begin for disclosure, loan
terms, and conduct innew text end the federal Home Ownership Equity Protection Act, United States
Code, title 15, section 1639, or its implementing regulation, Code of Federal Regulations,
title 12, sections 226.31 deleted text begin todeleted text end new text begin , 226.32, andnew text end 226.34, for any foreclosure reconveyance in which
the foreclosed homeowner obtains a vendee interest in a contract for deednew text begin , regardless of
whether the terms of the contract for deed meet the annual percentage rate or points and
fees requirements for a covered loan in Code of Federal Regulations, title 12, section
226.32 (a) and (b)new text end ;
(b) fail to either:
(1) ensure that title to the subject dwelling has been reconveyed to the foreclosed
homeowner; or
(2) make a payment to the foreclosed homeowner such that the foreclosed
homeowner has received consideration in an amount of at least 82 percent of the
fair market value of the property within 150 days of either the eviction or voluntary
relinquishment of possession of the dwelling by the foreclosed homeowner. The
foreclosure purchaser shall make a detailed accounting of the basis for the payment
amount, or a detailed accounting of the reasons for failure to make a payment,
including providing written documentation of expenses, within this 150-day period. The
accounting shall be on a form prescribed by the attorney general, in consultation with
the commissioner of commerce, without being subject to the rulemaking procedures of
chapter 14. For purposes of this provision, the following applies:
(i) there is a rebuttable presumption that an appraisal by a person licensed or certified
by an agency of the federal government or this state to appraise real estate constitutes the
fair market value of the property;
(ii) the time for determining the fair market value amount shall be determined in the
foreclosure reconveyance contract as either at the time of the execution of the foreclosure
reconveyance contract or at resale. If the contract states that the fair market value shall
be determined at the time of resale, the fair market value shall be the resale price if
it is sold within 120 days of the eviction or voluntary relinquishment of the property
by the foreclosed homeowner. If the contract states that the fair market value shall be
determined at the time of resale, and the resale is not completed within 120 days of the
eviction or voluntary relinquishment of the property by the foreclosed homeowner, the fair
market value shall be determined by an appraisal conducted during this 120-day period
and payment, if required, shall be made to the homeowner, but the fair market value
shall be recalculated as the resale price on resale and an additional payment amount, if
appropriate based on the resale price, shall be made to the foreclosed homeowner within
15 days of resale, and a detailed accounting of the basis for the payment amount, or a
detailed accounting of the reasons for failure to make additional payment, shall be made
within 15 days of resale, including providing written documentation of expenses. The
accounting shall be on a form prescribed by the attorney general, in consultation with
the commissioner of commerce, without being subject to the rulemaking procedures
of chapter 14;
(iii) "consideration" shall mean any payment or thing of value provided to the
foreclosed homeowner, including unpaid rent or contract for deed payments owed by the
foreclosed homeowner prior to the date of eviction or voluntary relinquishment of the
property, reasonable costs paid to third parties necessary to complete the foreclosure
reconveyance transaction, payment of money to satisfy a debt or legal obligation of the
foreclosed homeowner, deleted text begin ordeleted text end the reasonable cost of repairs for damage to the dwelling caused
by the foreclosed homeownernew text begin , or a penalty imposed by a court for the filing of a frivolous
claim under section 325N.18, subdivision 6new text end ; but
(iv) "consideration" shall not include amounts imputed as a down payment or fee
to the foreclosure purchaser, or a person acting in participation with the foreclosure
purchaser, incident to a contract for deed, lease, or option to purchase entered into as part
of the foreclosure reconveyance, except for reasonable costs paid to third parties necessary
to complete the foreclosure reconveyance;
(c) enter into repurchase or lease terms as part of the subsequent conveyance that are
unfair or commercially unreasonable, or engage in any other unfair conduct;
(d) represent, directly or indirectly, that:
(1) the foreclosure purchaser is acting as an advisor or a consultant, or in any other
manner represents that the foreclosure purchaser is acting on behalf of the homeowner;
(2) the foreclosure purchaser has certification or licensure that the foreclosure
purchaser does not have, or that the foreclosure purchaser is not a member of a licensed
profession if that is untrue;
(3) the foreclosure purchaser is assisting the foreclosed homeowner to "save the
house" or substantially similar phrase; or
(4) the foreclosure purchaser is assisting the foreclosed homeowner in preventing a
completed foreclosure if the result of the transaction is that the foreclosed homeowner will
not complete a redemption of the property;
(e) make any other statements, directly or by implication, or engage in any other
conduct that is false, deceptive, or misleading, or that has the likelihood to cause confusion
or misunderstanding, including, but not limited to, statements regarding the value of
the residence in foreclosure, the amount of proceeds the foreclosed homeowner will
receive after a foreclosure sale, any contract term, or the foreclosed homeowner's rights or
obligations incident to or arising out of the foreclosure reconveyance; or
(f) do any of the following until the time during which the foreclosed homeowner
may cancel the transaction has fully elapsed:
(1) accept from any foreclosed homeowner an execution of, or induce any foreclosed
homeowner to execute, any instrument of conveyance of any interest in the residence
in foreclosure;
(2) record with the county recorder or file with the registrar of titles any document,
including but not limited to, any instrument of conveyance, signed by the foreclosed
homeowner;
(3) transfer or encumber or purport to transfer or encumber any interest in
the residence in foreclosure to any third party, provided no grant of any interest or
encumbrance is defeated or affected as against a bona fide purchaser or encumbrance for
value and without notice of a violation of sections 325N.10 to 325N.18, and knowledge
on the part of any such person or entity that the property was "residential real property
in foreclosure" does not constitute notice of a violation of sections 325N.10 to 325N.18.
This section does not abrogate any duty of inquiry which exists as to rights or interests of
persons in possession of the residential real property in foreclosure; or
(4) pay the foreclosed homeowner any consideration.
Sec. 20.
Minnesota Statutes 2006, section 325N.18, is amended by adding a
subdivision to read:
new text begin Subd. 6. new text end
new text begin Stay of eviction action. new text end
new text begin
(a) A court hearing an eviction action against a
foreclosed homeowner must issue an automatic stay, without imposition of a bond, if a
defendant makes a prima facie showing that the defendant:
new text end
new text begin
(1) has (i) commenced an action concerning a foreclosure reconveyance; (ii) asserts
a defense under section 504B.121 that the property that is the subject of the eviction
action is also the subject of a foreclosure reconveyance in violation of sections 325N.10
to 325N.17; or (iii) asserts a claim or affirmative defense of fraud, false pretense, false
promise, misrepresentation, misleading statement, or deceptive practice, in connection
with a foreclosure reconveyance;
new text end
new text begin
(2) owned the foreclosed residence;
new text end
new text begin
(3) conveyed title to the foreclosed residence to a third party upon a promise that the
defendant would be allowed to occupy the foreclosed residence or other real property in
which the foreclosure purchaser or a person acting in participation with the foreclosure
purchaser has an interest and that the foreclosed residence or other real property would be
the subject of a foreclosure reconveyance; and
new text end
new text begin
(4) since the conveyance, has continuously occupied the foreclosed residence or
other real property in which the foreclosure purchaser or a person acting in participation
with the foreclosure purchaser has an interest.
new text end
new text begin
For purposes of this subdivision, notarized affidavits are acceptable means of proof
to meet the defendant's burden. Upon good cause shown, a defendant may request and
the court may grant up to an additional two weeks to produce evidence required to make
the prima facie showing.
new text end
new text begin
(b) A court may award to a plaintiff a $500 penalty upon a showing that the
defendant filed a frivolous claim or asserted a frivolous defense.
new text end
new text begin
(c) The automatic stay expires upon the later of:
new text end
new text begin
(1) the failure of the foreclosed homeowner to commence an action in a court of
competent jurisdiction in connection with a foreclosed reconveyance transaction within
90 days after the issuance of the stay; or
new text end
new text begin
(2) the issuance of an order lifting the stay by a court hearing the claims related
to the foreclosure reconveyance.
new text end
new text begin
(d) If, after the expiration of the stay or an order lifting the stay, a court finds that the
defendant's claim or defense was asserted in bad faith and wholly without merit, the court
may impose a sanction against the defendant of $500 plus reasonable attorney fees.
new text end
Sec. 21.
Laws 2004, chapter 263, section 26, is amended to read:
Sec. 26. EFFECTIVE DATE; EXPIRATION.
Sections 1 to 18, 22, 23, and 25 are effective August 1, 2004deleted text begin , and expire December
31, 2009deleted text end . Sections 19, 20, 21, and 24 are effective July 1, 2004.
Sec. 22. new text begin LICENSE RENEWAL EXTENSION.
new text end
new text begin
The July 31, 2007, renewal date for mortgage originators is extended to October 30,
2007, because of the changes to the licensing requirements made by this act.
new text end
Sec. 23. new text begin REPEALER.
new text end
new text begin
Minnesota Statutes 2006, section 58.08, subdivision 1,
new text end
new text begin
is repealed.
new text end
ARTICLE 2
PREDATORY LENDING
Section 1.
Minnesota Statutes 2006, section 58.02, is amended by adding a subdivision
to read:
new text begin Subd. 27. new text end
new text begin Investment grade. new text end
new text begin
When used in reference to residential mortgage loans,
"investment grade" refers to a system of categorizing residential mortgage loans in which
the pricing or terms are distinguished by interest rate or discount points or both charged to
the borrower, which vary according to the degree of perceived risk of default based on
factors such as the borrower's credit, including credit score and credit patterns; income and
employment history; debt ratio; loan-to-value ratio; and prior bankruptcy or foreclosure.
new text end
Sec. 2.
Minnesota Statutes 2006, section 58.02, is amended by adding a subdivision to
read:
new text begin Subd. 28. new text end
new text begin Prime loan. new text end
new text begin
"Prime loan" means a residential mortgage loan that is
of the highest investment grade and which is commonly designated by an alphabetical
character of "A."
new text end
Sec. 3.
Minnesota Statutes 2006, section 58.02, is amended by adding a subdivision to
read:
new text begin Subd. 29. new text end
new text begin Subprime loan. new text end
new text begin
"Subprime loan" means a residential mortgage loan
that is of less than the highest investment grade, and which is commonly designated by
an alphabetical character of "A-" to "D."
new text end
Sec. 4.
Minnesota Statutes 2006, section 58.02, is amended by adding a subdivision to
read:
new text begin Subd. 30. new text end
new text begin Fully indexed rate. new text end
new text begin
"Fully indexed rate" equals the index rate prevailing
at the time a residential mortgage loan is originated, plus the margin that will apply after
the expiration of an introductory interest rate.
new text end
Sec. 5.
Minnesota Statutes 2006, section 58.13, subdivision 1, is amended to read:
Subdivision 1.
Generally.
new text begin (a)new text end No person acting as a residential mortgage originator
or servicer, including a person required to be licensed under this chapter, and no person
exempt from the licensing requirements of this chapter under section 58.04, new text begin except as
otherwise provided in paragraph (b),new text end shall:
(1) fail to maintain a trust account to hold trust funds received in connection with a
residential mortgage loan;
(2) fail to deposit all trust funds into a trust account within three business days of
receipt; commingle trust funds with funds belonging to the licensee or exempt person; or
use trust account funds for any purpose other than that for which they are received;
(3) unreasonably delay the processing of a residential mortgage loan application,
or the closing of a residential mortgage loan. For purposes of this clause, evidence of
unreasonable delay includes but is not limited to those factors identified in section 47.206,
subdivision 7, clause (d);
(4) fail to disburse funds according to its contractual or statutory obligations;
(5) fail to perform in conformance with its written agreements with borrowers,
investors, other licensees, or exempt persons;
(6) charge a fee for a product or service where the product or service is not actually
provided, or misrepresent the amount charged by or paid to a third party for a product
or service;
(7) fail to comply with sections 345.31 to 345.60, the Minnesota unclaimed property
law;
(8) violate any provision of any other applicable state or federal law regulating
residential mortgage loans including, without limitation, sections 47.20 to 47.208;
(9) make or cause to be made, directly or indirectly, any false, deceptive, or
misleading statement or representation in connection with a residential loan transaction
including, without limitation, a false, deceptive, or misleading statement or representation
regarding the borrower's ability to qualify for any mortgage product;
(10) conduct residential mortgage loan business under any name other than that
under which the license or certificate of exemption was issued;
(11) compensate, whether directly or indirectly, coerce or intimidate an appraiser for
the purpose of influencing the independent judgment of the appraiser with respect to the
value of real estate that is to be covered by a residential mortgage or is being offered as
security according to an application for a residential mortgage loan;
(12) issue any document indicating conditional qualification or conditional approval
for a residential mortgage loan, unless the document also clearly indicates that final
qualification or approval is not guaranteed, and may be subject to additional review;
(13) make or assist in making any residential mortgage loan with the intent that the
loan will not be repaid and that the residential mortgage originator will obtain title to
the property through foreclosure;
(14) provide or offer to provide for a borrower, any brokering or lending services
under an arrangement with a person other than a licensee or exempt person, provided that
a person may rely upon a written representation by the residential mortgage originator that
it is in compliance with the licensing requirements of this chapter;
(15) claim to represent a licensee or exempt person, unless the person is an employee
of the licensee or exempt person or unless the person has entered into a written agency
agreement with the licensee or exempt person;
(16) fail to comply with the record keeping and notification requirements identified
in section 58.14 or fail to abide by the affirmations made on the application for licensure;
(17) represent that the licensee or exempt person is acting as the borrower's agent
after providing the nonagency disclosure required by section 58.15, unless the disclosure
is retracted and the licensee or exempt person complies with all of the requirements of
section 58.16;
(18) make, provide, or arrange for a residential mortgage loan that is of a lower
investment grade if the borrower's credit score or, if the originator does not utilize credit
scoring or if a credit score is unavailable, then comparable underwriting data, indicates
that the borrower may qualify for a residential mortgage loan, available from or through
the originator, that is of a higher investment grade, unless the borrower is informed that
the borrower may qualify for a higher investment grade loan with a lower interest rate
and/or lower discount points, and consents in writing to receipt of the lower investment
grade loan.
For purposes of this section, "investment grade" refers to a system of categorizing
residential mortgage loans in which the loans are: (i) commonly referred to as "prime" or
"subprime"; (ii) commonly designated by an alphabetical character with "A" being the
highest investment grade; and (iii) are distinguished by interest rate or discount points
or both charged to the borrower, which vary according to the degree of perceived risk
of default based on factors such as the borrower's credit, including credit score and
credit patterns, income and employment history, debt ratio, loan-to-value ratio, and prior
bankruptcy or foreclosure;
(19) make, publish, disseminate, circulate, place before the public, or cause to be
made, directly or indirectly, any advertisement or marketing materials of any type, or any
statement or representation relating to the business of residential mortgage loans that is
false, deceptive, or misleading;
(20) advertise loan types or terms that are not available from or through the licensee
or exempt person on the date advertised, or on the date specified in the advertisement.
For purposes of this clause, advertisement includes, but is not limited to, a list of sample
mortgage terms, including interest rates, discount points, and closing costs provided by
licensees or exempt persons to a print or electronic medium that presents the information
to the public;
(21) use or employ phrases, pictures, return addresses, geographic designations, or
other means that create the impression, directly or indirectly, that a licensee or other
person is a governmental agency, or is associated with, sponsored by, or in any manner
connected to, related to, or endorsed by a governmental agency, if that is not the case; deleted text begin or
deleted text end
(22) violate section 82.49, relating to table fundingdeleted text begin .deleted text end new text begin ;new text end
new text begin
(23) make, provide, or arrange for a residential mortgage loan without verifying
the borrower's reasonable ability to pay the scheduled payments of the following, as
applicable: principal; interest; real estate taxes; homeowner's insurance; assessments;
and mortgage insurance premiums. For loans in which the interest rate may vary, the
reasonable ability to pay shall be determined based on a fully indexed rate and a repayment
schedule which achieves full amortization over the life of the loan. For all residential
mortgage loans, the borrower's income and financial resources must be verified by tax
returns, payroll receipts, bank records, or other similarly reliable documents.
new text end
new text begin
Nothing in this section shall be construed to limit a mortgage originator's or exempt
person's ability to rely on criteria other than the borrower's income and financial resources
to establish the borrower's reasonable ability to repay the residential mortgage loan;
however, such other criteria must be verified through reasonably reliable methods and
documentation. A statement by the borrower to the residential mortgage originator or
exempt person of the borrower's income and resources is not sufficient to establish the
existence of the income or resources when verifying the reasonable ability to pay;
new text end
new text begin
(24) engage in "churning." As used in this section, "churning" means knowingly or
intentionally making, providing, or arranging for a residential mortgage loan when the
new residential mortgage loan does not provide a reasonable, tangible net benefit to the
borrower considering all of the circumstances including the terms of both the new and
refinanced loans, the cost of the new loan, and the borrower's circumstances;
new text end
new text begin
(25) the first time a residential mortgage originator orally informs a borrower of the
anticipated or actual periodic payment amount for a first-lien residential mortgage loan
which does not include an amount for payment of property taxes and hazard insurance,
the residential mortgage originator must inform the borrower that an additional amount
will be due for taxes and insurance and, if known, disclose to the borrower the amount of
the anticipated or actual periodic payments for property taxes and hazard insurance. This
same oral disclosure must be made each time the residential mortgage originator orally
informs the borrower of a different anticipated or actual periodic payment amount change
from the amount previously disclosed. A residential mortgage originator need not make
this disclosure concerning a refinancing loan if the residential mortgage originator knows
that the borrower's existing loan that is anticipated to be refinanced does not have an
escrow account; or
new text end
new text begin
(26) make, provide, or arrange for a residential mortgage loan, other than a reverse
mortgage pursuant to United States Code, title 15, chapter 41, if the borrower's compliance
with any repayment option offered pursuant to the terms of the loan will result in negative
amortization during any six-month period.
new text end
new text begin
(b) Paragraph (a), clauses (23) through (26), do not apply to a state or federally
chartered bank, savings bank, or credit union, or to a person making, providing, or
arranging a residential mortgage loan originated or purchased by a state agency or a
tribal or local unit of government. This paragraph supersedes any inconsistent provision
of this chapter.
new text end
Sec. 6.
Minnesota Statutes 2006, section 58.137, subdivision 1, is amended to read:
Subdivision 1.
Financed interest, points, finance charges, fees, and other
charges.
A residential mortgage originator making or modifying a residential mortgage
loan to a borrower located in this state must not include in the principal amount of any
residential mortgage loan all or any portion of any lender fee in an aggregate amount
exceeding five percent of the loan amount. This subdivision shall not apply to residential
mortgage loans which are insured or guaranteed by the secretary of housing and urban
development or the administrator of veterans affairs or the administrator of the Farmers
Home Administration or any successor.
"Lender fee" means interest, points, finance charges, fees, and other charges payable
new text begin in connection with the residential mortgage loan: (1) new text end by the borrower to any residential
mortgage originator or to any assignee of any residential mortgage originatornew text begin ; or (2) by
the lender to a mortgage brokernew text end . Lender fee does not include recording fees, mortgage
registration taxes, passthroughs, or other amounts that are paid by any person to any
government entitydeleted text begin ,deleted text end new text begin or new text end filing officedeleted text begin ,deleted text end new text begin ; new text end or deleted text begin other third party that is not a residential mortgage
originator or an assignee of a residential mortgage originator. Lender fee also does not
includedeleted text end any amount that is set aside to pay taxes or insurance on any property securing the
residential mortgage loan.
"Loan amount" means: (1) for a line of credit, the maximum principal amount of
the line of credit; and (2) for any other residential mortgage loan, the principal amount
of the residential mortgage loan excluding all interest, points, finance charges, fees, and
other charges. A residential mortgage originator shall not charge, receive, or collect any
excess financed interest, points, finance charges, fees, or other charges described in this
subdivision, or any interest, points, finance charges, fees, or other charges with respect
to this excess.
Sec. 7.
Minnesota Statutes 2006, section 58.137, subdivision 2, is amended to read:
Subd. 2.
Prepayment penalties.
(a) A residential mortgage originator making a
residential mortgage loan new text begin that is a prime loan new text end to a borrower located in this state shall not
charge, receive, or collect any prepayment penalty, fee, premium, or other charge:
(1) for any partial prepayment of the residential mortgage loan; or
(2) for any prepayment of the residential mortgage loan upon the sale of any
residential real property, or the sale of any stock, interest, or lease relating to cooperative
ownership of residential real property, securing the loan; or
(3) for any prepayment of the residential mortgage loan if the prepayment is made
more than 42 months after the date of the note or other agreement for the residential
mortgage loan; or
(4) for any prepayment of the residential mortgage loan if the aggregate amount of
all prepayment penalties, fees, premiums, and other charges exceeds the lesser of (i) an
amount equal to two percent of the unpaid principal balance of the residential mortgage
loan at the time of prepayment, or (ii) an amount equal to 60 days' interest, at the interest
rate in effect on the residential mortgage loan at the time of prepayment, on the unpaid
principal balance of the residential mortgage loan at the time of prepayment.
(b) If a residential mortgage originator offers or makes residential mortgage loans
to any borrowers located in this state with prepayment penalties, fees, premiums, or
other charges exceeding the maximum amount under paragraph (a), clause (4), then the
residential mortgage originator shall provide the following disclosure to each prospective
borrower located in this state that requests a residential mortgage loan from the residential
mortgage originator, whether or not the prospective borrower receives a residential
mortgage loan:
THIS IS VERY IMPORTANT
THIS LENDER CHARGES YOU A SUBSTANTIAL PENALTY IF YOU PAY OFF OR
REFINANCE YOUR LOAN BEFORE MATURITY. ASK THE LENDER HOW MUCH
THE PENALTY WILL BE FOR YOUR LOAN.
The residential mortgage originator shall read the disclosure to the prospective
borrower when the prospective borrower requests a residential mortgage loan, and again
within three days before the borrower signs the note or other agreement for the residential
mortgage loan. The residential mortgage originator also shall provide the disclosure to the
prospective borrower in writing so that it is received by the prospective borrower within
five days after the residential mortgage originator receives the prospective borrower's
request for a residential mortgage loan, and again within three days before the prospective
borrower signs the note or other agreement for the residential mortgage loan. The written
disclosure must be stated in at least 16-point capitalized boldface type on a single sheet of
paper that contains only the disclosure, the date on which the disclosure form is sent or
provided, the name, address, and telephone number of the residential mortgage originator,
the name and address of the prospective borrower, and, at the option of the residential
mortgage originator, the prospective borrower's dated and signed acknowledgment
of receipt of the disclosure form. The provisions of the disclosure form, other than
the disclosure in this subdivision, are not required to be in at least 16-point capitalized
boldface type. The prospective borrower shall be permitted to keep a copy of each written
disclosure form. When a prospective borrower asks a residential mortgage originator for
information about a prepayment penalty, the residential mortgage originator shall give the
prospective borrower the requested information, and shall tell the borrower the highest
aggregate amount of the prepayment penalties, fees, premiums, and other charges that the
residential mortgage originator would charge to the prospective borrower for prepayment
of the residential mortgage loan one year after it is funded, based on a hypothetical
unpaid principal balance of $100,000 and also based on the highest interest rate that the
residential mortgage originator would charge to the prospective borrower. A mortgage
originator responding to requests for residential mortgage loans via the Internet may make
the disclosure in a manner acceptable to the commissioner.
new text begin
(c) A residential mortgage originator shall not enter into a subprime loan that
contains a provision requiring or permitting the imposition of a penalty, fee, premium,
or other charge in the event the residential mortgage loan is prepaid in whole or in part.
This prohibition does not apply to any loan with a principal amount that, or, in the case of
an open-end credit plan, in which the borrower's initial maximum credit limit, exceeds
the conforming loan size limit for a single-family dwelling as established from time to
time by Fannie Mae.
new text end
Sec. 8.
Minnesota Statutes 2006, section 58.15, is amended to read:
58.15 DISCLOSURE REQUIREMENTS FOR new text begin CERTAIN new text end RESIDENTIAL
MORTGAGE ORIGINATORS.
Subdivision 1.
Nonagency disclosure.
If a residential mortgage originator or
exempt person new text begin other than a mortgage broker new text end does not contract or offer to contract to act
as an agent of a borrower, or accept an advance fee, it must, within three business days
of accepting an application for a residential mortgage loan, provide the borrower with a
written disclosure as provided in subdivision 2.
Subd. 2.
Form and content requirements.
The disclosure must be a separate
document, 8-1/2 inches by 11 inches, must be signed by the borrower and must contain the
following statement in 14-point boldface print:
Originator IS NOT ACTING AS YOUR AGENT IN CONNECTION WITH
OBTAINING A RESIDENTIAL MORTGAGE LOAN. WHILE WE SEEK TO
ASSIST YOU IN MEETING YOUR FINANCIAL NEEDS, WE CANNOT
GUARANTEE THE LOWEST OR BEST TERMS AVAILABLE IN THE
MARKET.
Subd. 3.
Electronic application disclosure requirement.
In case of an electronic
residential mortgage application, the disclosure requirements of this section may be
satisfied by providing the disclosure statement as a separate screen if the disclosure must
be acknowledged by the borrower before an application is accepted.
Subd. 4.
Exemption from disclosure requirement.
If the Department of
Housing and Urban Development adopts and implements a disclosure requirement deleted text begin for
persons offering mortgage origination servicesdeleted text end that the commissioner determines to be
substantially similar to the disclosure required in subdivision 2, deleted text begin licensees and exempt
persons complyingdeleted text end new text begin compliancenew text end with the HUD disclosure shall be considered new text begin sufficient new text end to
deleted text begin have complied withdeleted text end new text begin satisfynew text end the requirements of deleted text begin subdivisions 1 anddeleted text end new text begin subdivisionnew text end 2.
Sec. 9.
Minnesota Statutes 2006, section 58.16, subdivision 1, is amended to read:
Subdivision 1.
Compliance.
Residential mortgage originators who solicit or receive
an advance fee in exchange for assisting a borrower located in this state in obtaining a
loan secured by a lien on residential real estate, or who offer to act as an agent of the
borrower located in this state in obtaining a loan secured by a lien on residential real estate
shall be considered to have created a fiduciary relationship with the borrower and shall
comply with the requirements of subdivisions 2 to 7.new text begin This section does not apply to
mortgage brokers who do not solicit or receive an advance fee.
new text end
Sec. 10.
Minnesota Statutes 2006, section 58.16, is amended by adding a subdivision
to read:
new text begin Subd. 1a. new text end
new text begin Mortgage broker fiduciary duties. new text end
new text begin
A mortgage broker shall be
considered to have created a fiduciary relationship with the borrower in all cases and shall
comply with the duties imposed upon fiduciaries by statute or common law.
new text end
Sec. 11.
new text begin
[58.161] MORTGAGE BROKER DUTIES OF AGENCY.
new text end
new text begin Subdivision 1. new text end
new text begin Generally. new text end
new text begin
A mortgage broker shall be considered to have created an
agency relationship with the borrower in all cases and shall comply with the following
duties:
new text end
new text begin
(1) mortgage brokers shall act in the borrower's best interest and in the utmost good
faith toward borrowers, and shall not compromise a borrower's right or interest in favor of
another's right or interest, including a right or interest of the mortgage broker. A mortgage
broker shall not accept, give, or charge any undisclosed compensation or realize any
undisclosed remuneration, either through direct or indirect means that inures to the benefit
of the mortgage broker or as an expenditure made for the borrower;
new text end
new text begin
(2) mortgage brokers will carry out all lawful instructions given by borrowers;
new text end
new text begin
(3) mortgage brokers will disclose to borrowers all material facts of which the
mortgage broker has knowledge which might reasonably affect the borrower's rights,
interests, or ability to receive the borrower's intended benefit from the residential mortgage
loan, but not facts which are reasonably susceptible to the knowledge of the borrower;
new text end
new text begin
(4) mortgage brokers will use reasonable care in performing duties; and
new text end
new text begin
(5) mortgage brokers will account to a borrower for all the borrower's money and
property received as agent.
new text end
new text begin Subd. 2. new text end
new text begin Scope. new text end
new text begin
(a) The duty of agency between mortgage broker and borrower
applies when the mortgage broker is acting in the capacity of mortgage broker as described
in section 58.02, subdivision 14 or 23.
new text end
new text begin
(b) Nothing in this section prohibits a mortgage broker from contracting for or
collecting a fee for services rendered and which had been disclosed to the borrower in
advance of the provision of such services.
new text end
new text begin
(c) Nothing in this section requires a mortgage broker to obtain a loan containing
terms or conditions not available to the mortgage broker in the mortgage broker's usual
course of business, or to obtain a loan for the borrower from a mortgage lender with whom
the mortgage broker does not have a business relationship.
new text end
Sec. 12.
new text begin
[58.19] CRIMINAL PENALTIES FOR GROSSLY UNSUITABLE
LOANS.
new text end
new text begin Subdivision 1. new text end
new text begin Definition. new text end
new text begin
For the purpose of this section, "grossly unsuitable"
means:
new text end
new text begin
(1) a residential mortgage loan for which the borrower lacked the capacity to repay
the interest and principal of the loan, and the real estate taxes and home insurance on the
property, at the time the loan was originated; or
new text end
new text begin
(2) a residential mortgage loan made as a result of a loan application that contains
materially false or fraudulent information as to the borrower's income, expenses, debts,
or assets.
new text end
new text begin Subd. 2. new text end
new text begin Acts constituting; penalties. new text end
new text begin
Any person who makes a residential
mortgage loan, or obtains or assists in obtaining from another person for a borrower a
residential mortgage loan, that the person knows is grossly unsuitable for the borrower
may be fined not more than $75,000 or imprisoned for up to two years, or both.
Prosecution or conviction for securing grossly unsuitable loans on behalf of borrowers will
not bar prosecution or conviction for any other offenses. These penalties are cumulative to
any other remedies or penalties provided by law.
new text end
new text begin Subd. 3. new text end
new text begin
Additional penalty for crime against a disabled or elderly person.
new text end
new text begin
Any person who commits the criminal offense specified in this section against a senior
citizen or disabled person may be fined an additional $50,000 or imprisoned for up to two
additional years, or both. For purposes of this subdivision, "senior citizen" and "disabled
person" have the meanings given those terms in section 325F.71, subdivision 1.
new text end
Sec. 13.
new text begin
[82B.24] PRIVATE RIGHT OF ACTION.
new text end
new text begin Subdivision 1. new text end
new text begin Remedies. new text end
new text begin
Any person injured by a violation of the standards, duties,
prohibitions, or requirements of section 82B.20 or 82B.22 shall have a private right of
action and the court shall award:
new text end
new text begin
(1) actual, incidental, and consequential damages;
new text end
new text begin
(2) statutory damages of no less than $1,000 nor more than $2,000; and
new text end
new text begin
(3) punitive damages as the court may allow. In determining punitive damages,
the court should consider the severity and intentionality of the violation, the number of
violations, and whether the violation was part of a pattern and practice of violations; and
new text end
new text begin
(4) court costs and reasonable attorney fees.
new text end
new text begin Subd. 2. new text end
new text begin Private attorney general statute. new text end
new text begin
A person injured by a violation of the
standards, duties, prohibitions, or requirements of section 82B.20 or 82B.22 also may
bring an action under section 8.31. A private right of action by a borrower under this
chapter is in the public interest.
new text end
new text begin Subd. 3. new text end
new text begin Remedies cumulative. new text end
new text begin
The remedies provided in this section are
cumulative and do not restrict any other right or remedy otherwise available to the
borrower.
new text end
ARTICLE 3
MISCELLANEOUS PROVISIONS
Section 1.
Minnesota Statutes 2006, section 327A.05, is amended to read:
327A.05 REMEDIES.
Subdivision 1.
New home warranties.
Upon breach of any warranty imposed by
section 327A.02, subdivision 1, the vendee shall have a cause of action against the vendor
for damages arising out of the breach, or for specific performance.new text begin If the vendee is the
prevailing party, the vendee must also be awarded the vendee's costs, disbursements, and
reasonable attorney fees.new text end Damages shall be limited to:
(a) the amount necessary to remedy the defect or breach; or
(b) the difference between the value of the dwelling without the defect and the value
of the dwelling with the defect.
Subd. 2.
Home improvement warranty.
Upon breach of any warranty imposed by
section 327A.02, subdivision 3, the owner shall have a cause of action against the home
improvement contractor for damages arising out of the breach, or for specific performance.new text begin
If the owner is the prevailing party, the owner must also be awarded the owner's costs,
disbursements, and reasonable attorney fees.new text end Damages shall be limited to the amount
necessary to remedy the defect or breach.
Sec. 2.
new text begin
[504B.206] RIGHT OF VICTIMS OF DOMESTIC ABUSE TO
TERMINATE LEASE.
new text end
new text begin Subdivision 1. new text end
new text begin Right to terminate; procedure. new text end
new text begin
A tenant to a residential lease who
is a victim of domestic abuse and fears imminent domestic abuse against the tenant or the
tenant's children by remaining in the leased premises may terminate a lease agreement
without penalty or liability, except as provided by this section, by providing written notice
to the landlord stating that the tenant fears imminent domestic abuse and indicating
the specific date the tenant intends to vacate the premises. The written notice must be
delivered by mail, fax, or in person, and be accompanied by one of the following:
new text end
new text begin
(1) an order for protection under chapter 518B; or
new text end
new text begin
(2) a no contact order, currently in effect, issued under section 518B.01, subdivision
22, or chapter 609.
new text end
new text begin Subd. 2. new text end
new text begin Confidentiality of information. new text end
new text begin
Information provided to the landlord by
the victim documenting domestic abuse pursuant to subdivision 1 shall be treated by the
landlord as confidential. The information may not be entered into any shared database
or provided to any entity except when required for use in an eviction proceeding, upon
the consent of the victim, or as otherwise required by law.
new text end
new text begin Subd. 3. new text end
new text begin Liability for rent; termination of tenancy. new text end
new text begin
(a) A tenant terminating a
lease pursuant to subdivision 1 is responsible for one month's rent following the vacation
of the premises and is relieved of any contractual obligation for payment of rent or any
other charges for the remaining term of the lease.
new text end
new text begin
(b) This section does not affect a tenant's liability for delinquent, unpaid rent or
other sums owed to the landlord before the lease was terminated by the tenant under this
section. The return or retention of the security deposit is subject to the provisions of
section 504B.178.
new text end
new text begin
(c) The tenancy terminates, including the right of possession of the premises, when
the tenant surrenders the keys to the premises to the landlord. The one month's rent is due
and payable on or before the date the tenant vacates the premises, as indicated in their
written notice pursuant to subdivision 1. For purposes of this section, the provisions of
section 504B.178 commence upon the first day of the month following either:
new text end
new text begin
(1) the date the tenant vacates the premises; or
new text end
new text begin
(2) the date the tenant pays the one month's rent, whichever occurs first.
new text end
new text begin
(d) The provisions of this subdivision do not apply until written notice meeting the
requirements of subdivision 1 is delivered to the landlord.
new text end
new text begin Subd. 4. new text end
new text begin Multiple tenants. new text end
new text begin
Notwithstanding the release of a tenant from a lease
agreement under this section, if there are any remaining tenants residing in the premises
the tenancy shall continue for those remaining tenants. A perpetrator who has been
excluded from the premises under court order remains liable under the lease with any
other tenant of the premises for rent or damage to the premises.
new text end
new text begin Subd. 5. new text end
new text begin Waiver prohibited. new text end
new text begin
A residential tenant may not waive, and a landlord
may not require the residential tenant to waive, the resident tenant's rights under this
section.
new text end
new text begin Subd. 6. new text end
new text begin Definition. new text end
new text begin
For purposes of this section, "domestic abuse" has the meaning
given in section 518B.01, subdivision 2.
new text end
Sec. 3.
Minnesota Statutes 2006, section 505.01, is amended to read:
505.01 PLATS, DONATIONSnew text begin , PURPOSE, DEFINITIONSnew text end .
new text begin Subdivision 1. new text end
new text begin Donations. new text end
Plats of land may be made in accordance with the
provisions of this chapter, and, when so made and recorded, every donation new text begin of a park new text end to
the public deleted text begin or any person or corporation noted thereondeleted text end shall operate to convey the fee of
all land so donated, for the uses and purposes named or intended, with the same effect,
upon the donor and the donor's heirs, and in favor of the donee, as though such land were
conveyed by warranty deed. Land donated for any public use in any municipality shall be
held in the corporate name in trust for the purposes set forth or intended.new text begin A street, road,
alley, trail, and other public way dedicated or donated on a plat shall convey an easement
only. Easements dedicated or donated on a plat shall convey an easement only.
new text end
new text begin Subd. 2. new text end
new text begin Purpose. new text end
new text begin
A plat prepared and recorded in accordance with this chapter is
for the purpose of subdividing land where the dedication of land for public ways, utility
easements, and drainage easements is necessary for orderly development. Plats may
also be used to:
new text end
new text begin
(1) depict existing parcels for the purpose of simplifying legal descriptions and to
provide a permanent record of a boundary survey; and
new text end
new text begin
(2) supplement minor subdivision procedures used by local units of government.
new text end
new text begin
Plats used to subdivide land are subject to the approval of the elected body of
local governmental units. Plats used to delineate existing parcels or supplement minor
subdivision procedures may be approved by a local government official designated by the
local elected governmental unit.
new text end
new text begin Subd. 3. new text end
new text begin Definitions. new text end
new text begin
(a) "Block" means a tract of land consisting of one or
more adjoining lots, as identified on a recorded plat by a number, and bounded by plat
boundaries, public ways, outlots, parks, or bodies of water.
new text end
new text begin
(b) "Dedication" means an easement granted by the owner to the public for the
purpose shown on the plat.
new text end
new text begin
(c) "Drainage easement" means an easement for the purpose of controlling,
preserving, and providing for the flow or storage of water.
new text end
new text begin
(d) "Lot" means a tract of land which is all or part of a block and identified on
the plat by a number.
new text end
new text begin
(e) "Minor subdivision procedure" means an approval process that local units of
government use for simple land divisions.
new text end
new text begin
(f) "Outlot" means a tract of land identified by a letter, which is not part of a block.
new text end
new text begin
(g) "Plat" means a delineation of a survey drawn to scale showing all data as
required by this chapter, pertaining to the location and boundaries of individual parcels
of land and public ways.
new text end
new text begin
(h) "Plat monument" means a durable magnetic marker placed at all locations
required by this chapter or other locations as shown on the plat.
new text end
new text begin
(i) "Public way" means a thoroughfare or cul-de-sac which provides ingress and
egress to the public.
new text end
new text begin
(j) "Survey line" means a monumented reference line that is not a boundary.
new text end
new text begin
(k) "Utility easement" means an easement conveyed, granted, or dedicated to the
public and acquired, established, dedicated, or devoted to utility purposes.
new text end
new text begin
(l) "Water boundary" means the shore or margin of lakes, ponds, rivers, creeks,
drainage ditches, or swamps.
new text end
new text begin
(m) "Wetland" means all rivers, streams, creeks, drainage ditches, lakes, ponds,
and swamps.
new text end
new text begin
(n) "Witness monument" means a plat monument placed at an identified distance and
direction from a corner that is inaccessible.
new text end
Sec. 4.
new text begin
[505.021] PLAT CONTENTS; SURVEY; COUNTY SURVEYOR
APPROVAL.
new text end
new text begin Subdivision 1. new text end
new text begin Plat format. new text end
new text begin
A plat shall be prepared on four mil transparent
reproducible film or the equivalent, and shall be prepared by a photographic process. Plat
sheet size shall be 22 inches by 34 inches. A border line shall be placed one-half inch
inside the outer edge of the plat on the top and bottom 34 inch sides; and the right 22 inch
side; and two inches inside the outer edge of the plat on the left 22 inch side. If a plat
consists of more than one sheet, the sheets shall be numbered consecutively.
new text end
new text begin Subd. 2. new text end
new text begin Plat name; legal description; dedication statement. new text end
new text begin
The plat name shall
appear across the top portion of the plat and in the dedication paragraph of the plat and
shall not duplicate or be similar to the name of any plat that is in the office of the county
recorder or registrar of titles in the county in which the land is located. The plat name shall
be in capital letters in all locations that the name appears on the plat. The plat shall contain
a complete and accurate description of the land being platted and a dedication statement
describing what part of the land is dedicated, to whom, and for what purpose. In the event
of a discrepancy between the plat name stated in the dedication statement and the plat name
appearing in other portions of the plat, the name in the dedication statement shall control.
new text end
new text begin Subd. 3. new text end
new text begin Ownership interest; acknowledgment. new text end
new text begin
At the time of recording, the
names and signatures of all fee owners, contract for deed vendees, and mortgage holders
of record of the land being platted shall appear on the plat, together with a statement as
to their interest. Individual owners shall indicate their marital status. Entity owner shall
identify the specific type of entity and the jurisdiction in which the entity is organized.
Agents or officers for an entity shall state their position with such entity. A mortgage
holder may consent to the plat by a written acknowledged statement in lieu of the mortgage
holder's name and signature appearing on the plat. If a mortgage holder is included on the
plat, the plat shall be signed by an authorized representative. If a certificate of notarial
act on a plat includes the jurisdiction of the notarial act, the name of the notarial officer,
the title of the notarial officer, and the date the notary commission expires, printed in pen
and ink or typewritten on the plat, a plat shall be recorded regardless of whether a notary
stamp was used or was illegible if used.
new text end
new text begin Subd. 4. new text end
new text begin Boundary; lots; blocks; outlots. new text end
new text begin
Plat boundaries shall be designated on
the plat in accordance with the underlying legal description and survey. All lots in each
block shall be numbered consecutively with arabic numerals beginning with numeral
one. All blocks shall be numbered consecutively with arabic numerals beginning with
numeral one. All outlots shall be labeled "OUTLOT" and lettered consecutively in capital
letters beginning with the letter A. All lot, block, and outlot lines shall be drawn as a
solid line. The name and adjacent boundary line of any adjoining platted lands shall be
dotted on the plat.
new text end
new text begin Subd. 5. new text end
new text begin Mathematical data; dimensions; labels; symbols. new text end
new text begin
A plat shall show
all survey and mathematical information and data necessary to locate and retrace all
boundary lines and monuments. Bearings, azimuths, and central angles shall be expressed
in degrees, minutes, and seconds and labeled with the respective symbols. A north arrow
and directional orientation note shall be shown. Distances shall be expressed in feet
and hundredths of a foot. All straight line segments of the plat shall be labeled with the
length of the line and bearing or azimuth. All curved line segments of the plat shall be
labeled with the central angle, arc length, and radius length. If any curve is nontangential
the dimensions shall include a long chord bearing or azimuth, and shall be labeled
nontangential. The mathematical closure tolerance of the plat boundary, blocks, lots, and
outlots shall not exceed two-hundredths of a foot. A graphics scale shall be shown along
with the label "Scale In Feet." Dimension and descriptive recitals in the legal description
shown on the plat shall be depicted and labeled on the graphic portion of the plat. A
symbol shall indicate the position of all found and set plat monuments, along with a
description of each. Ditto marks and foot and inch symbols shall not be used.
new text end
new text begin Subd. 6. new text end
new text begin Public ways. new text end
new text begin
All public ways within the plat, whether existing at the time
of platting or being dedicated by the plat shall be depicted on the plat together with the
name and sufficient mathematical data to locate the position and width of the public way.
The location of all existing public ways adjacent to the plat boundary shall be depicted
on the plat as dashed lines. The name and width of the adjacent public ways shall be
shown, if known.
new text end
new text begin Subd. 7. new text end
new text begin Easements. new text end
new text begin
All easements to be dedicated on the plat shall be depicted
on the plat with purpose, identification, and sufficient mathematical data to locate the
boundaries of such easements. Easements created on the plat shall be limited to public
utility and drainage easements as defined in section 505.01, subdivision 3, paragraphs (c),
(i), and (k). Easement boundaries shall be shown as dashed lines. Temporary easements,
building set back information, and building floor elevations shall not be shown on a plat.
new text end
new text begin Subd. 8. new text end
new text begin Water boundaries. new text end
new text begin
Any water boundary abutting or lying within the plat
boundaries shall be shown and identified on the plat as a solid line delineating the existing
shore line. When any parcel depicted on the plat includes water as a boundary, a dashed
survey line shall be shown and labeled with sufficient mathematical data to compute a
closure of said parcel. Distances shall be shown between the survey line and the water
boundary at all angle points, lot, and boundary lines. Plat monuments shall be set at all
locations where the survey line intersects a plat boundary line or block, lot, or outlot line.
The water elevation of any lake, stream, or river depicted on the plat shall be shown to the
tenth of a foot along with the date the elevation was measured. All elevations shall be
referenced to a durable bench mark described on the plat together with its general location
shown and bench mark elevation to the hundredth of a foot. If a mean sea level adjusted
datum bench mark is available within two miles of the land being platted, all elevations
shall be referenced to such datum. The highest known water elevation shall be indicated
on the plat if such data is available from the Department of Natural Resources, the United
States Army Corps of Engineers, or another appropriate governmental unit. All wetlands
as defined in section 505.01, subdivision 3, paragraph (m), shall be shown on the plat.
new text end
new text begin Subd. 9. new text end
new text begin Certifications. new text end
new text begin
(a) A plat shall contain a certification by the land surveyor
who surveyed or directly supervised the survey of the land being platted and prepared the
plat or directly supervised the plat preparation. Said certificate shall state that:
new text end
new text begin
(1) the plat is a correct representation of the boundary survey;
new text end
new text begin
(2) all mathematical data and labels are correctly designated on the plat;
new text end
new text begin
(3) all monuments depicted on the plat have been or will be correctly set within
one year as indicated on the plat;
new text end
new text begin
(4) all water boundaries and wetlands as of the date of the surveyor's certification are
shown and labeled on the plat; and
new text end
new text begin
(5) all public ways are shown and labeled on the plat.
new text end
new text begin
The surveyor's certification shall be properly acknowledged by the surveyor on
the plat before a notarial officer.
new text end
new text begin
(b) A plat shall contain a certification of approval executed by the local elected
governmental unit or an authorized official designated by the local elected governmental
unit.
new text end
new text begin
(c) In any county that requires review and approval of plats by the county surveyor
or another land surveyor, the plat shall contain a certification of approval executed by the
county surveyor or land surveyor that this plat is in compliance with this section.
new text end
new text begin
(d) A plat shall contain a certification by the proper county official that there are
no delinquent taxes owed and that the current year's payable taxes have been paid in
accordance with section 272.12.
new text end
new text begin
(e) A plat shall contain a certification of recording by the county recorder or registrar
of titles, or both, if the plat contains both nonregistered and registered property.
new text end
new text begin Subd. 10. new text end
new text begin Survey. new text end
new text begin
The land surveyor that certifies the plat shall survey or directly
supervise the survey of the land depicted on the plat. Plat monuments shall be set at all
angle and curve points on the outside boundary lines of the plat prior to recording. Interior
block, lot, and witness monuments shall be set within one year after recording of the
plat. A financial guarantee may be required for the placement of monuments. If it is
impracticable to set a plat monument, a witness plat monument shall be set. The license
number of the land surveyor that certifies the plat shall be affixed to all set plat monuments.
new text end
new text begin Subd. 11. new text end
new text begin County surveyor approval. new text end
new text begin
All plats prepared for recording in
accordance with this section are subject to approval by the county surveyor in accordance
with section 389.09, subdivision 1, and as authorized by their respective county board
of commissioners.
new text end
Sec. 5.
Minnesota Statutes 2006, section 505.03, subdivision 1, is amended to read:
Subdivision 1.
deleted text begin Plat formalitiesdeleted text end new text begin City, town, and county approvalnew text end .
deleted text begin On the plat shall
be written an instrument of dedication, which shall be signed and acknowledged by the
owner of the land. All signatures on the plat shall be written with black ink (not ball
point). The instrument shall contain a full and accurate description of the land platted
and set forth what part of the land is dedicated, and also to whom, and for what purpose
these parts are dedicated. The surveyor shall certify on the plat that the plat is a correct
representation of the survey, that all distances are correctly shown on the plat, that all
monuments have been or will be correctly placed in the ground as shown or stated, and that
the outside boundary lines are correctly designated on the plat. If there are no wet lands or
public highways to be designated in accordance with section 505.02, the surveyor shall
so state. The certificate shall be sworn to before any officer authorized to administer an
oath. The platdeleted text end new text begin Platsnew text end shall, except in cities whose charters provide for official supervision
of plats by municipal officers or bodies, together with an abstract and certificate of title, be
presented for approval to the council of the city or town board of towns wherein there
reside over 5,000 people in which the land is located; and, if the land is located outside the
limits of any city, or such town, then to the board of county commissioners of the county
in which the land is located. new text begin Plats used to delineate existing parcels or supplement minor
subdivision procedures may be approved by a local government official designated by the
local elected governmental unit.
new text end
Sec. 6.
Minnesota Statutes 2006, section 505.04, is amended to read:
505.04 new text begin REAL ESTATE TAXES; new text end RECORDINGnew text begin ; COPIESnew text end .
Every plat, when duly certified, signed, and acknowledged, as provided in section
deleted text begin 505.03deleted text end new text begin 505.021new text end , and upon presentation of a certificate from the deleted text begin county treasurerdeleted text end new text begin authorized
county officialnew text end that the current year's taxes have been paid, shall be deleted text begin filed anddeleted text end recorded in
the office of the county recorderdeleted text begin .deleted text end new text begin or registrar of titles, or both, if the plat contains both
nonregistered and registered property. An exact transparent reproducible copy shall, at the
discretion of the county recorder or registrar of titles, be provided to the county recorder or
registrar of titles, or both, if the plat contains both nonregistered and registered property.
The official plat shall be labeled "OFFICIAL PLAT" and any copy shall be labeled "copy."
The official plat and any copy shall be placed under the direct supervision of the county
recorder or registrar of titles, or both, if the plat contains both nonregistered and registered
property, and be open to inspection by the public. In counties having a full-time county
surveyor who operates an office on a full-time basis, the exact copy may be placed under
the direct supervision of the county surveyor and be open to inspection by the public.
Upon request of the county auditor of the county wherein the land is situated, the county
recorder or registrar of titles shall cause a reproduction copy of the official plat, or of the
exact copy, to be made and filed with such county auditor, at the expense of the county.new text end
Sec. 7.
Minnesota Statutes 2006, section 505.08, subdivision 2, is amended to read:
Subd. 2.
Public certified copies.
The copies of the official plat or of the exact
reproducible copy shall be compared and certified to by the county recordernew text begin or registrar
of titlesnew text end in the manner in which certified copies of records are issued in the recorder'snew text begin or
registrar'snew text end office, and the copy thereof shall be deleted text begin bound in a proper volumedeleted text end for the use of
the general public and anyone shall have access to and may inspect such certified copy
deleted text begin at their pleasuredeleted text end new text begin during normal business hoursnew text end . When the plat includes both registered
and nonregistered land deleted text begin twodeleted text end copies thereof shall be so certified and deleted text begin bound, onedeleted text end new text begin availablenew text end
for such general public use in each of the offices of the county recorder and registrar
of titles; provided, however, that only one such copy so certified deleted text begin and bounddeleted text end shall be
provided for general public use in those counties wherein the deleted text begin office quartersdeleted text end new text begin officesnew text end of
the county recorder and registrar of titles are one and the same. When deleted text begin thedeleted text end new text begin anynew text end copy, or
any part thereof, shall become deleted text begin unintelligibledeleted text end new text begin illegiblenew text end from use or wear or otherwise, deleted text begin at
the request of the county recorder it shall be the duty of the county surveyordeleted text end new text begin it shall be
the duty of the county recorder or registrar of titles or county surveyor, depending upon
where the copy resides,new text end to make a reproduction copy of the official plat, or the exact
transparent reproducible copy deleted text begin under the direct supervision of the county recorder, who
shalldeleted text end new text begin . It shall be the responsibility of the county recorder or registrar of titles tonew text end compare
the copy, certify that it is a correct copy thereof, by proper certificate as deleted text begin abovedeleted text end set forthnew text begin
abovenew text end , and it shall be deleted text begin bound in the volume, and under the page, anddeleted text end new text begin made availablenew text end in
deleted text begin thedeleted text end place of the deleted text begin discardeddeleted text end new text begin illegiblenew text end copy. deleted text begin In counties not having a county surveyor the
county recorder shall employ a licensed land surveyor to make such reproduction copy,
at the expense of the county. The county recorder shall receive as a fee for filing these
plats, as aforesaid described, pursuant to section 357.18, subdivision 1.deleted text end Reproductions
from the exact transparent reproducible copy shall be available to any person upon request
and the cost of such reproductions shall be paid by the person making such request. If a
copy of the official plat is requested the county recorder shall prepare it and duly certify
that it is a copy of the official plat and the cost of such copy shall be paid by the person
making such request.
Sec. 8.
Minnesota Statutes 2006, section 505.1792, subdivision 2, is amended to read:
Subd. 2.
Requirements.
deleted text begin
Said plats shall be uniform in size measuring 20 by 30
inches from outer edge to outer edge. A border line shall be placed one-half inch inside
the outer edges of the plat or map on the top, bottom, and right hand side; a border line
shall be placed two inches inside the outer edge on the left hand side. A north arrow and
scale of the plat shall be shown on the plat which scale shall be of such dimension that the
plat may be easily interpreted. The plat may consist of more than one sheet but if more
than one sheet, they shall be numbered progressively and match lines of the right-of-way
shall be indicated on each sheet. An official and one or more identical copies of each plat
shall be prepared in black on white mat photographic card stock with double cloth back
mounting or material of equal quality. One exact reproducible copy of the official plat
shall be prepared on linen tracing cloth by a photographic process or on material of equal
quality. The plat on white card stock shall be labeled "Official Plat" and the reproducible
copy shall be labeled "Reproducible Copy of Official Plat". The reproducible copy shall
be compared with the official plat and certified to by the county recorder in the manner in
which certified copies of records are issued in the recorder's office, and the copies shall
be bound in a proper volume for the use of the general public. The official plat may be
inspected by any member of the public but only in the presence of the county recorder or
the registrar of titles or a deputy. Any member of the public may have made a copy of the
official plat by paying to the proper officer the cost of reproduction together with a fee of
50 cents for certification by the filing officer. Reproductions from the exact transparent
reproducible copy shall be available to any person upon request and the cost of such
reproductions shall be paid by the person making such request. If the abutting property is
abstract property the plat shall be filed with the county recorder; if registered property,
with the registrar of titles; if both registered and nonregistered property, then with both the
county recorder and the registrar of titles, and when so filed with the registrar of titles ,
the registrar shall enter a reference to said plat as a memorial on all certificates of title of
registered lands which abut the right-of-way shown on the map or plat filed.
deleted text end
deleted text begin In counties having microfilming capabilities, a plat may be prepared on sheets of
suitable mylar or on linen tracing cloth by photographic process or on material of equal
quality. The plat shall be labeled "Official Plat." Notwithstanding any other provisions
of this subdivision to the contrary, no other copies of the plat need to be filed.deleted text end new text begin The map
or plat shall be prepared in compliance with section 505.021, subdivisions 1 and 5, and
recorded in compliance with section 505.04.
new text end
Sec. 9.
Minnesota Statutes 2006, section 510.02, is amended to read:
510.02 AREA AND VALUE; HOW LIMITED.
The homestead may include any quantity of land not exceeding 160 acres, and not
included in the laid out or platted portion of any city. If the homestead is within the laid
out or platted portion of a city, its area must not exceed one-half of an acre. The deleted text begin value of
the homestead exemptiondeleted text end new text begin amount of the exemption per homesteadnew text end , whether the exemption
is claimed deleted text begin jointly or individuallydeleted text end new text begin by one or more debtorsnew text end , may not exceed $200,000 or,
if the homestead is used primarily for agricultural purposes, $500,000, exclusive of the
limitations set forth in section 510.05.
Sec. 10.
Minnesota Statutes 2006, section 510.05, is amended to read:
510.05 LIMITATIONS.
deleted text begin Suchdeleted text end new text begin The amount of the new text end homestead exemptionnew text begin shall not be reduced by andnew text end shall
not extend to any mortgage lawfully obtained thereon, to any valid lien for taxes or
assessments, to a claim filed pursuant to section 256B.15 or section 246.53 deleted text begin ordeleted text end new text begin ,new text end to any
charge arising under the laws relating to laborers or material suppliers' liensnew text begin , or to any
charge obtained pursuant to a valid waiver of the homestead exemptionnew text end .
Sec. 11.
Minnesota Statutes 2006, section 541.051, subdivision 2, is amended to read:
Subd. 2.
Action allowed; limitation.
Notwithstanding the provisions of subdivision
1, in the case of an action which accrues during the ninth or tenth year after substantial
completion of the construction, an action to recover damages may be brought within
two years after the date on which the action accrued, but in no event may an action be
brought more than 12 years after substantial completion of the constructiondeleted text begin .deleted text end new text begin , except for an
action for contribution or indemnity which may be brought no more than 14 years after
substantial completion of the construction.
new text end
Sec. 12.
Minnesota Statutes 2006, section 550.175, subdivision 1, is amended to read:
Subdivision 1.
new text begin Order directing sale of real property. new text end
new text begin
The executing creditor
must obtain an order from the court directing a sale of the real property that includes
a homestead before service of the notice of execution on real property containing the
homestead of the debtor. The order shall contain the following findings:
new text end
new text begin
(1) whether the real property is the homestead of a nondebtor;
new text end
new text begin
(2) the amount of the debtor's homestead exemption, if any; and
new text end
new text begin
(3) whether the fair market value of the real property exceeds the sum of the debtor's
homestead exemption and the present encumbrances.
new text end
new text begin
If the court finds that there is no nondebtor with a valid homestead interest in the
real property and that the fair market value of the homestead real property exceeds the
sum of the debtor's homestead exemption and the present encumbrances, the court shall
order a sale of the real property for cash or cash equivalents to the extent of the homestead
exemption.
new text end
new text begin Subd. 1a. new text end
Notification of homestead designation.
If real property is to be sold on
execution and the property contains a portion of the homestead of the debtor, the debtor
must be notified by the executing creditor that the homestead may be sold and redeemed
separately from the remaining property. The notice in subdivision 2 must be included in
the notice of execution served on the debtor under section 550.19.
Sec. 13.
Minnesota Statutes 2006, section 550.175, subdivision 4, is amended to read:
Subd. 4.
Sale of property.
(a) If the sheriff receives a homestead property
designation under subdivision 3, the sheriff must offer and sell the designated homestead
property, and the remaining property, separately, unless the executing creditor denies the
right to the exemption, objects to the property designated, or claims the value exceeds
the exemption.
(b) If the executing creditor is dissatisfied with the homestead property designation
or the debtor's valuation of the property, upon proper motion to the district court of the
county in which any part of the property is located, the executing creditor is entitled to
a court approved designation of the homestead and a court determination of value. The
court shall either approve the debtor's designation or cause the property to be surveyed
and order a homestead designation consistent with the standards of subdivision 3 and
require an appraisal of fair market value, as applicable. The court's designation of the
homestead property must conform to the debtor's request, to the extent not inconsistent
with the standards of subdivision 3.
(c) The court, in determining appraised value, shall review any appraisals provided
by the debtor and executing creditor and may require a court appointed independent
appraisal. The appraisals shall evaluate the property's fair market value, net of reasonable
costs of sale.
(d) If the court determines that the property claimed as a homestead exceeds in value
the amount of the homestead exemption or if the court determines that the property cannot
be divided without material injury, the court shall order the sale of the entire property,
including the designated homesteaddeleted text begin . Out of the proceeds of the sale, the court shall pay
the debtor the amount of the homestead exemption and apply the balance of the proceeds
of the sale on the executiondeleted text end new text begin for cash or cash equivalents to the extent of the homestead
exemptionnew text end .
(e) At the sale, no bid may be accepted unless it exceeds the amount of the
homestead exemption. If no bid exceeds the exemption, the homestead is exempt.
(f) The cost of any court ordered survey or appraisal and of the sale must be collected
on the execution, if the debtor designated as the debtor's homestead a greater quantity of
property, property of greater value than the debtor was entitled to, or designated a parcel
that does not meet the standards of subdivision 3. In all other cases, the costs shall be
borne by the executing creditor.
Sec. 14.
Minnesota Statutes 2006, section 550.175, is amended by adding a subdivision
to read:
new text begin Subd. 6. new text end
new text begin Real property not subject to execution. new text end
new text begin
Real property that includes a
homestead as defined under section 510.01 is not subject to execution under this chapter if
there is a nondebtor with:
new text end
new text begin
(1) homestead rights under sections 507.02 and 510.01 to 510.04;
new text end
new text begin
(2) rights as a joint tenant or life tenant; or
new text end
new text begin
(3) rights to take the homestead under section 524.2-402.
new text end
Sec. 15.
Minnesota Statutes 2006, section 550.18, is amended to read:
550.18 NOTICE OF SALE.
Before the sale of property on execution notice shall be given as follows:
(1) if the sale be of personal property, by giving ten days posted notice of the time
and place thereof;
(2) if the sale be of real property, on execution or on judgment, by six weeks posted
and published notice of the time and place thereof, describing the property with sufficient
certainty to enable a person of common understanding to identify it.
new text begin
(3) A judgment creditor shall record a certified copy of the order directing sale of real
property issued pursuant to section 550.175, if the real property is a homestead, with the
county recorder or registrar of titles as appropriate in the county in which the real property
is located before the first date of publication of the notice of sale required under clause (2).
new text end
An officer who sells without such notice shall forfeit $100 to the party aggrieved, in
addition to paying actual damages; and a person who before the sale or the satisfaction of
the execution, and without the consent of the parties, takes down or defaces the notice
posted, shall forfeit $50; but the validity of the sale shall not be affected by either act,
either as to third persons or parties to the action.
Sec. 16.
Minnesota Statutes 2006, section 550.19, is amended to read:
550.19 SERVICE ON JUDGMENT DEBTOR.
deleted text begin
At or before the time of posting notice of sale, the officer shall serve a copy of the
execution and inventory, and of such notice, upon the judgment debtor, if the debtor be a
resident of the county, in the manner required by law for the service of a summons in a
civil action.
deleted text end
new text begin
A judgment creditor must, at least four weeks before the appointed time of
sale, serve a copy of the notice of sale in like manner as a summons in a civil action in the
district court upon the judgment debtor if the judgment debtor is a resident of the county
and upon any person in possession of the homestead other than the judgment debtor.
In addition, the notice of sale must also be served upon all persons who have recorded
a request for notice in accordance with section 580.032.
new text end
Sec. 17.
new text begin
[550.206] REPORT OF SALE OF HOMESTEAD ON EXECUTION;
CONFIRMATION; RESALE.
new text end
new text begin
Upon sale of a homestead on execution, the sheriff shall file a report of the sale with
the court. Upon the filing of the report of sale, the court shall grant an order confirming the
sale, or, if it appears upon due examination that justice has not been done, the court may
order a resale on terms the court determines are just. Upon confirmation of the sale and
execution of the certificate of sale, the sheriff shall pay the judgment debtor the amount of
the homestead exemption and apply the balance of the proceeds of the sale to the execution.
The sheriff shall pay any surplus thereafter in the manner provided in section 580.09.
new text end
Sec. 18.
Minnesota Statutes 2006, section 550.22, is amended to read:
550.22 CERTIFICATE OF SALE OF REALTY.
When a sale of real property is made upon execution, or pursuant to a judgment or
order of a court, unless otherwise specified therein, the officer shall execute new text begin and deliver
new text end to the purchaser a certificate containing:
(1) a description of the execution, judgment, or order;
(2) a description of the property;
(3) the date of the sale and the name of the purchaser;
(4) the price paid for each parcel separately;
(5) if subject to redemption, the time allowed by law therefornew text begin ;
new text end
new text begin (6) the amount of the debtor's homestead exemption, if any, as determined under
section 550.175new text end .
Such certificate shall be executed, acknowledged, and recorded in the manner
provided by law for a conveyance of real property, shall be prima facie evidence of the
facts deleted text begin thereindeleted text end stated, and, upon expiration of the time for redemption, shall operate as
a conveyance to the purchaser of all the right, title, and interest of the person whose
property is sold in and to the same, at the date of the lien upon which the same was sold.new text begin
Any person desiring to perpetuate evidence that any real property sold under this section
was not homestead real property may procure an affidavit by the person enforcing the
judgment, or that person's attorney, or someone having knowledge of the facts, setting
forth that the real property was not homestead real property. The affidavit shall be
recorded by the county recorder or registrar of titles, and the affidavit and certified copies
of the affidavit shall be prima facie evidence of the facts stated in the affidavit.
new text end
Sec. 19.
Minnesota Statutes 2006, section 550.24, is amended to read:
550.24 REDEMPTION OF REALTY.
(a) Upon the sale of real property, if the estate sold is less than a leasehold of two
years' unexpired term, the sale is absolute. In all other cases the property sold, or any
portion thereof which has been sold separately, is subject to redemption as provided
in this section.
(b) The judgment debtor, the debtor's heirs, successors, legal representatives, or
assigns may redeem within one year after the day of salenew text begin , or order confirming sale if
the property is a homestead,new text end by paying, to the purchaser or the officer making the sale,
the amount for which the property was sold with interest at the judgment rate and if the
purchaser is a creditor having a prior lien, the amount thereof, with interest at the judgment
ratenew text begin together with any costs as provided in sections 582.03 and 582.031new text end .
(c) If there is no redemption during the debtor's redemption period, creditors having
a lien, legal or equitable, on the property or some part thereof, subsequent to that on
which it was sold may redeem in the manner provided for redemption by creditors of the
mortgagor in section 580.24, in the order of their respective liens.
new text begin
(d) If the property is abandoned during the judgment debtor's redemption period,
the person holding the sheriff's certificate may request that the court reduce the judgment
debtor's redemption period to five weeks using the procedures provided for a foreclosure
by action in section 582.032, subdivision 5.
new text end
Sec. 20.
Minnesota Statutes 2006, section 580.24, is amended to read:
580.24 REDEMPTION BY CREDITOR.
(a) If no redemption is made by the mortgagor, the mortgagor's personal
representatives or assigns, the most senior creditor having a legal or equitable lien upon
the mortgaged premises, or some part of it, subsequent to the foreclosed mortgage, may
redeem within seven days after the expiration of the redemption period determined
under section 580.23 or 582.032, whichever is applicable; and each subsequent creditor
having a lien may redeem, in the order of priority of their respective liens, within seven
days after the time allowed the prior lienholder by paying the amount required under this
section. However, no creditor is entitled to redeem unless, within the period allowed for
redemption by the mortgagor, the creditor:
(1) records with each county recorder and registrar of titles where the foreclosed
mortgage is recorded a notice of the creditor's intention to redeem;
(2) records in each office where the notice is recorded all documents necessary to
create the lien on the mortgaged premises and to evidence the creditor's ownership of the
lien; and
(3) after complying with clauses (1) and (2), delivers to the sheriff who conducted
the foreclosure sale or the sheriff's successor in office a copy of each of the documents
required to be recorded under clauses (1) and (2), with the office, date and time of filing
for record stated on the first page of each document.
The sheriff shall maintain for public inspection all documents delivered to the sheriff
and shall note the date of delivery on each document. The sheriff may charge a fee of
$100 for the documents delivered to the sheriff relating to each lien. The sheriff shall
maintain copies of documents delivered to the sheriff for a period of six months after the
end of the mortgagor's redemption period.
(b) Saturdays, Sundays, legal holidays, and the first day following the expiration
of the prior redemption period must be included in computing the seven-day redemption
period. When the last day of the period falls on Saturday, Sunday, or a legal holiday,
that day must be omitted from the computation.new text begin The order of redemption by judgment
creditors subsequent to the foreclosed mortgage shall be determined by the order in which
their judgments were entered as memorials on the certificate of title for the foreclosed
premises or docketed in the office of the district court administrator if the property is not
registered under chapter 508 or 508A, regardless of the homestead status of the property.new text end
All mechanic's lienholders who have coordinate liens shall have one combined seven-day
period to redeem.
(c) The amount required to redeem from the holder of the sheriff's certificate of sale
is the amount required under section 580.23. The amount required to redeem from a
person holding a certificate of redemption is:
(1) the amount paid to redeem as shown on the certificate of redemption; plus
(2) interest on that amount to the date of redemption; plus
(3) the amount claimed due on the person's lien, as shown on the affidavit under
section 580.25, clause (3).
The amount required to redeem may be paid to the holder of the sheriff's certificate
of sale or the certificate of redemption, as the case may be, or to the sheriff for the holder.
Sec. 21. new text begin REPEALER.
new text end
new text begin
Minnesota Statutes 2006, sections 505.02; and 505.08, subdivisions 1, 2a, and 3,
new text end
new text begin
are
repealed.
new text end
Sec. 22. new text begin EFFECTIVE DATE; APPLICATION.
new text end
new text begin
Section 1 is effective the day following final enactment and applies to causes
of action pending on, or commenced on or after, that date. Section 11 is effective
retroactively from June 30, 2006.
new text end