HF 1377

as introduced - 88th Legislature (2013 - 2014) Posted on 03/07/2013 02:16pm

A bill for an act
relating to real estate; requiring loss mitigation by mortgage lenders and
servicers; amending Minnesota Statutes 2012, sections 580.02; 580.041,
subdivisions 1b, 1c, 2a.

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

Section 1.

Minnesota Statutes 2012, section 580.02, is amended to read:

580.02 REQUISITES FOR FORECLOSURE.

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the terms defined in
this subdivision have the meanings given them.
new text end

new text begin (b) "Foreclosing party" means any entity that is foreclosing a residential mortgage
in any manner permitted by law.
new text end

new text begin (c) "Loss mitigation obligations" means each and every required action to be taken
by a residential mortgage servicer, lender, mortgagee, note owner, note holder, or any other
person or entity in connection with a residential mortgage loan to review and consider
the homeowner for a loan modification or other relief which will allow the homeowner to
retain ownership of the property.
new text end

new text begin (d) "Required action" means an action required under:
new text end

new text begin (1) any applicable statute or rule;
new text end

new text begin (2) any regulation, guidance, directive, or other publication issued by a federal
agency or government-sponsored enterprise; or
new text end

new text begin (3) any consent, settlement, or other legal agreement.
new text end

new text begin Subd. 2. new text end

new text begin Generally applicable requisites. new text end

To entitle any new text begin foreclosing new text end party to make
deleted text begin such deleted text end new text begin a new text end foreclosure new text begin described in section 580.01 new text end , it is requisite:

(1) that some default in a condition of such mortgage has occurred, by which the
power to sell has become operative;

(2) that no action or proceeding has been instituted at law to recover the debt then
remaining secured by such mortgage, or any part thereof, or, if the action or proceeding
has been instituted, that the same has been discontinued, or that an execution upon the
judgment rendered therein has been returned unsatisfied, in whole or in part;

(3) that the mortgage has been recorded and, if it has been assigned, that all
assignments thereof have been recorded; provided, that, if the mortgage is upon registered
land, it shall be sufficient if the mortgage and all assignments thereof have been duly
registered; and

(4) before the notice of pendency as required under section 580.032 is recorded, the
party has complied with section 580.021.

new text begin Subd. 3. new text end

new text begin Requisites applicable to certain foreclosing parties. new text end

new text begin No foreclosing
party may publish or serve a notice of sale under section 580.03 until all loss mitigation
obligations relevant to the mortgage loan being foreclosed have been fully satisfied.
new text end

Sec. 2.

Minnesota Statutes 2012, section 580.041, subdivision 1b, is amended to read:

Subd. 1b.

Form and delivery of foreclosure advice notice.

The foreclosure advice
notice required by this section must be in 14-point boldface type and must be printed on
colored paper that is other than the color of the notice of foreclosure required by sections
580.03 and 580.04 and the notice of redemption rights required by this section, and that
does not obscure or overshadow the content of the notice. The title of the notice must
be in 20-point boldface type. The notice must be on its own page. The foreclosure
advice notice required by this section must be delivered with the notice of foreclosure
required by sections 580.03 and 580.04. The foreclosure advice notice required by this
section also must be delivered with each subsequent written communication regarding the
foreclosure mailed to the mortgagor by the foreclosing party up to the day of deleted text begin redemption.
A foreclosing mortgagee will be deemed to have complied with this section if it sends
the foreclosure advice notice required by this section at least once every 60 days during
the period of the foreclosure process deleted text end new text begin the foreclosure sale new text end . The foreclosure advice notice
required by this section must not be published.

Sec. 3.

Minnesota Statutes 2012, section 580.041, subdivision 1c, is amended to read:

Subd. 1c.

Form and delivery of notice of redemption rights.

The notice of
redemption rights required by this section must be in 14-point boldface type and must be
printed on colored paper that is other than the color of the notice of foreclosure required by
sections 580.03 and 580.04 and the foreclosure advice notice required by this section, and
that does not obscure or overshadow the content of the notice. The title of the notice must
be in 20-point boldface type. The notice must be on its own page. The notice of redemption
rights must be delivered with the notice of foreclosure required by sections 580.03 and
580.04 new text begin and with each subsequent written communication regarding the foreclosure mailed
to the mortgagor by the foreclosing party up to the day the redemption period expires new text end . The
notice of redemption rights required by this section must not be published.

Sec. 4.

Minnesota Statutes 2012, section 580.041, subdivision 2a, is amended to read:

Subd. 2a.

Content of notice of redemption rights.

The notice of redemption rights
required by this section must appear substantially as follows:

"What Happens After the Foreclosure Sale

After the sheriff's sale, you have the right to "redeem." Redeem means that you pay the
amount bid for your house at the sheriff's sale, plus interest and costs, to keep your house.
You can keep living in your home for a period of time after the foreclosure sale. This is
called a "redemption period." The redemption period is [insert number of months] months
after the sheriff's sale.

At the end of the redemption period, if you do not redeem or sell, you will have to
leave your home. If you do not leave, the person or company that bid on your home at the
sheriff's sale has the right to file an eviction against you in court.

Be Careful of Foreclosure Scams

Be careful! After the foreclosure sale, people may approach you to buy your house
or ask you to transfer your house to them for little or no money.

Before you give up the rights to your house or sign any documents (including a
deed), be sure you know how much the house sold for at the sheriff's sale and decide if
you can save the house by paying the amount of the bid, plus interest and costs.

How to Find Out How Much Your House Sold For at the Foreclosure Sale

The amount you need to pay to redeem your house may be less than the amount you
owed on the mortgage before the sale. You can learn what this amount is (and who the
winning bidder at the sale was) by attending the sheriff's sale or by contacting the sheriff's
office after the sale.

You Can Also Sell Your House

During the redemption period, if you sell your home, you must sell it for enough
to pay off the winning bidder from the sheriff's sale and pay interest, fees, and other
claims against the property. If there is any money left from the sale of the house after all
these debts are paid, you can keep the money. You can also enter into a "short sale." A
short sale is an agreement in which the lender agrees to accept less than the full amount
you owe on the mortgage.

Get More Information and Advice

For more information and advice, contact an attorney or a mortgage
foreclosure prevention counselor. You can find a mortgage foreclosure
prevention counselor by contacting the Minnesota Home Ownership Center
at 651-659-9336 or 866-462-6466 or www.hocmn.org or contact the United
States Department of Housing and Urban Development at 1-800-569-4287 or
deleted text begin www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search=MN#searchArea
deleted text end new text begin www.hud.gov new text end to get the phone number and location of the nearest certified counseling
organization."

Sec. 5. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 3 are effective for foreclosures commenced on or after August 1, 2013.
Section 4 is effective the day following final enactment.
new text end