HF 2699

2nd Engrossment - 86th Legislature (2009 - 2010) Posted on 03/23/2010 12:51pm

A bill for an act
relating to mortgages; amending notice requirements during foreclosure;
amending Minnesota Statutes 2008, sections 580.03; 580.041, as amended;
580.06; Minnesota Statutes 2009 Supplement, section 580.04.

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

Section 1.

Minnesota Statutes 2008, section 580.03, is amended to read:

580.03 NOTICE OF SALE; SERVICE ON OCCUPANT.

Six weeks' published notice shall be given that such mortgage will be foreclosed by
sale of the mortgaged premises or some part thereof, and at least four weeks before the
appointed time of sale a copy of such notice shall be served in like manner as a summons
in a civil action in the district court upon the person in possession of the mortgaged
premises, if the same are actually occupied. If there be a building on such premises used
by a church or religious corporation, for its usual meetings, service upon any officer
or trustee of such corporation shall be a sufficient service upon it. The deleted text begin notice deleted text end new text begin notices
new text end required by sections 580.041 and 580.042 must be served simultaneously with the notice
of foreclosure required by this section.

Sec. 2.

Minnesota Statutes 2009 Supplement, section 580.04, is amended to read:

580.04 REQUISITES OF NOTICE.

(a) Each notice shall specify or contain:

(1) the name of the mortgagor, the mortgagee, each assignee of the mortgage, if any,
and the original or maximum principal amount secured by the mortgage;

(2) the date of the mortgage, and when and where recorded, except where the
mortgage is upon registered land, in which case the notice shall state that fact, and when
and where registered;

(3) the amount claimed to be due on the mortgage on the date of the notice;

(4) a description of the mortgaged premises, conforming substantially to that
contained in the mortgage, and the commonly used street address of the mortgaged
premises;

(5) the time and place of sale;

(6) the time allowed by law for redemption by the mortgagor, the mortgagor's
personal representatives or assigns; and

(7) for mortgaged premises described in section 582.032, subdivision 1, the following
statement in capital letters: "THE TIME ALLOWED BY LAW FOR REDEMPTION
BY THE MORTGAGOR, THE MORTGAGOR'S PERSONAL REPRESENTATIVES
OR ASSIGNS, MAY BE REDUCED TO FIVE WEEKS IF A JUDICIAL ORDER IS
ENTERED UNDER MINNESOTA STATUTES, SECTION 582.032, DETERMINING,
AMONG OTHER THINGS, THAT THE MORTGAGED PREMISES ARE IMPROVED
WITH A RESIDENTIAL DWELLING OF LESS THAN FIVE UNITS, ARE NOT
PROPERTY USED IN AGRICULTURAL PRODUCTION, AND ARE ABANDONED."

(b) If the real estate is an owner-occupied, single-family dwelling, the notice must
also specify the date on or before which the mortgagor must vacate the property if the
mortgage is not reinstated under section 580.30 or the property redeemed under section
580.23. The notice must state that the time to vacate the property is 11:59 p.m. on the
specified date.

Sec. 3.

Minnesota Statutes 2008, section 580.041, as amended by Laws 2009, chapter
123, section 7, and Laws 2009, chapter 130, section 7, is amended to read:

580.041 FORECLOSURE ADVICE new text begin AND REDEMPTION RIGHTS new text end NOTICE
TO OWNERS.

Subd. 1a.

Applicability.

This section applies to foreclosure of mortgages by
advertisement under this chapter and foreclosure of mortgages by action under chapter
581 on property consisting of one to four family dwelling units, one of which the owner
occupies as the owner's principal place of residency when the notice of pendency under
section 580.032 or the lis pendens for a foreclosure under chapter 581 is recorded.

Subd. 1b.

Form and delivery of new text begin foreclosure advice new text end notice.

The new text begin foreclosure advice
new text end 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 new text begin required by sections
580.03 and 580.04 and the notice of redemption rights required by this section, new text end 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 new text begin foreclosure
advice new text end notice required by this section must be delivered with the notice of foreclosure
required by sections 580.03 and 580.04. The new text begin foreclosure advice new text end 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 redemption.
A foreclosing mortgagee will be deemed to have complied with this section if it sends
the new text begin foreclosure advice new text end notice required by this section at least once every 60 days during
the period of the foreclosure process. The new text begin foreclosure advice new text end notice required by this
section must not be published.

new text begin Subd. 1c. new text end

new text begin Form and delivery of notice of redemption rights. new text end

new text begin 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. The notice of redemption rights required by this section must not
be published.
new text end

Subd. 2.

Content of new text begin foreclosure advice new text end notice.

The new text begin foreclosure advice new text end notice
required by this section must appear substantially as follows:

"Help For Homeowners in Foreclosure

	The attorney preparing this foreclosure is: _
		(Attorney name, address, phone)
	It is being prepared for:
	_
	(Lender name, loss mitigation phone number)

AS OF [insert date], this lender says that you owe $[insert dollar amount] to bring
your mortgage up to date new text begin (or "reinstate" your mortgage) new text end . You must pay this amount new text begin ,
plus interest and other costs, new text end to keep your house from going through a sheriff's sale.
The sheriff's sale is scheduled for [insert date] at [insert time] at [insert place].

Mortgage foreclosure is a complex process. People may contact you with advice and
offers to help "save" your home.

Remember: It is important that you learn as much as you can about foreclosure and
your situation. Find out about all your options before you make any agreements with
anyone about the foreclosure of your home.

Getting Help

As soon as possible, you should contact your lender at the above number to talk
about things you might be able to do to prevent foreclosure. You should also
consider contacting the foreclosure prevention counselor in your area. A foreclosure
prevention counselor can answer your questions, offer free advice, and help you
create a plan which makes sense for your situation.

Contact the Minnesota Home Ownership Center at 651-659-9336 or 866-462-6466
or www.hocmn.org to get the phone number and location of the nearest counseling
organization. Call today. The longer you wait, the fewer options you may have for
a desirable result.

deleted text begin Information About the Foreclosure Process
deleted text end

deleted text begin You do not need to move at the time of the sheriff's sale. After the sheriff's sale you
have the right to "redeem." Redeem means that you pay off the entire loan amount
plus fees to keep your house. You can keep living in your home for a period of time.
This is called a "redemption period." The redemption period is [insert number of
months] months after the sheriff's sale. This redemption period is your chance to
try and sell your home or refinance it with a different loan. You can also pay the
redemption amount with any other funds you have available. At the end of the
redemption period you will have to leave your home. If you do not, the person or
company that bid on your home at the sheriff's sale has the right to file an eviction
against you in district court. deleted text end "

new text begin Subd. 2a. new text end

new text begin Content of notice of redemption rights. new text end

new text begin The notice of redemption rights
required by this section must appear substantially as follows:
new text end

new text begin "What Happens After the Foreclosure Sale
new text end

new text begin 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.
new text end

new text begin 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.
new text end

new text begin Be Careful of Foreclosure Scams
new text end

new text begin 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.
new text end

new text begin 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 it by paying the amount of the bid, plus interest and costs.
new text end

new text begin How to Find Out How Much Your House Sold For at the Foreclosure Sale
new text end

new text begin The amount you need to pay to redeem your house may be less than the amount
you owed on your 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.
new text end

new text begin You Can Also Sell Your House
new text end

new text begin 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 any recorded liens, fines, or
fees that have accumulated. (A lien is a legal claim that someone has put on your property
because you owe that person money. A recorded lien means that it has been filed with the
county as a public document.) 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" where
the lender agrees to accept less than the full amount you owe on the mortgage.
new text end

new text begin Get More Information and Advice
new text end

new text begin 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 to get the phone number and location of the nearest counseling
organization."
new text end

Subd. 3.

Affidavit.

Any person may establish compliance with or inapplicability of
this section by recording, with the county recorder or registrar of titles, an affidavit by
a person having knowledge of the facts, stating that the notice required by this section
has been delivered in compliance with this section or that this section is not applicable
because the property described in the notice of foreclosure did not consist of one to four
family dwelling units, one of which was occupied by the owner as the owner's principal
place of residency. The affidavit and a certified copy of a recorded affidavit shall be prima
facie evidence of the facts stated in the affidavit. The affidavit may be recorded regarding
any foreclosure sale, including foreclosure sales which occurred prior to August 1, 2005,
and may be recorded separately or as part of the record of a foreclosure.

Subd. 4.

Validation of foreclosure sales.

No mortgage foreclosure sale under this
chapter shall be invalid because of failure to comply with this section unless an action
to invalidate the sale is commenced and a notice of lis pendens is filed with the county
recorder or registrar of titles within one year after the last day of the redemption period of
the mortgagor, the mortgagor's personal representatives, or assigns. This subdivision shall
not affect any action or proceeding pending on August 1, 2005, or which is commenced
before February 1, 2006, in any court of this state, provided a notice of lis pendens of the
action is filed with the county recorder or registrar of titles before February 1, 2006.

Sec. 4.

Minnesota Statutes 2008, section 580.06, is amended to read:

580.06 SALE, HOW AND BY WHOM MADE new text begin ; NOTICE TO MORTGAGOR new text end .

new text begin Subdivision 1. new text end

new text begin Requirements for sale. new text end

The sale shall be made by the sheriff or the
sheriff's deputy at public venue to the highest bidder, in the county in which the premises
to be sold, or some part thereof, are situated, between 9:00 a.m. and 4:00 p.m.

new text begin Subd. 2. new text end

new text begin Notice of results of sale required; contents. new text end

new text begin (a) Except as provided in
paragraph (c), a person attempting to acquire fee title to the mortgagor's property from
the mortgagor following the sheriff's sale and prior to the end of the redemption period
must provide to the mortgagor, by personal delivery three days prior to entering into
an agreement to acquire title, notice of the results of the foreclosure as provided under
paragraph (b).
new text end

new text begin (b) The notice required under paragraph (a) must contain the following information:
new text end

new text begin (1) the date the sale occurred;
new text end

new text begin (2) the identity of the purchaser and any assignees of the purchaser;
new text end

new text begin (3) the sheriff's sale price; and
new text end

new text begin (4) the following statement: "There are very important things you need to know now
that your house has been auctioned at the sheriff's sale:
new text end

new text begin new text begin (i) you have (insert the number of months) to "redeem," which means to pay
the winning bidder the sale price listed above (plus interest and costs) and keep
your house;
new text end new text end

new text begin (ii) whether you can pay off the amount or not, YOU DO NOT HAVE TO MOVE
RIGHT AWAY. YOU CAN KEEP LIVING IN YOUR HOME until the end of this
redemption period;
new text end

new text begin (iii) read all notices and documents related to the foreclosure of your home
carefully!! THE AMOUNT YOU NEED TO PAY THE WINNING BIDDER TO
REDEEM YOUR HOUSE (THE SHERIFF'S SALE PRICE LISTED ABOVE, PLUS
INTEREST AND COSTS) MAY BE LESS THAN THE AMOUNT YOU OWED ON
YOUR MORTGAGE BEFORE THE SHERIFF'S SALE; and
new text end

new text begin (iv) you can also try to sell your home during this "redemption period." You must
sell it for enough to pay off the winning bidder from the sheriff's sale and pay any recorded
liens, fines, or fees that have built up. A lien is a legal claim that someone has put on your
property because you owe them money. A recorded lien means that it has been filed with
the county as a public document. For example, if you owe on a second mortgage or to a
contractor, there could be a recorded lien against the property. You can also enter into a
"short sale" where the lender accepts less than the full amount you owe on the mortgage.
new text end

new text begin If there is any money left from the sale of the house after all these debts are paid,
you can keep the money.
new text end

new text begin For more information and advice, contact an attorney or a mortgage foreclosure
prevention counselor. You can find a mortgage foreclosure prevention counselor in
your county by calling the Minnesota Home Ownership Center at 651-659-9336 or
866-462-6466 or www.hocmn.org."
new text end

new text begin (c) This subdivision does not apply to:
new text end

new text begin (1) a seller or buyer who has entered into a signed agency agreement, facilitator
agreement, or other written agreement to buy or sell the mortgagor's property with a
person licensed under chapter 82;
new text end

new text begin (2) a buyer who offers to buy the mortgagor's property for a purchase price that
meets or exceeds the amount required to be paid by the mortgagor to redeem the property;
new text end

new text begin (3) a foreclosing lender acquiring the mortgagor's property by a deed in lieu of
foreclosure;
new text end

new text begin (4) a nonprofit lender holding a certificate of exemption from the Department
of Commerce;
new text end

new text begin (5) the state or a local unit of government or an agent of the state or a local unit
of government; or
new text end

new text begin (6) a natural person who shows by affidavit that the natural person is not in the
business of acquiring fee title to mortgaged property following the sheriff's sale and has a
prior personal relationship with the foreclosed homeowner. An affidavit recorded in
the real estate records to that effect is prima facie evidence that the person is not in the
business of acquiring fee title to mortgaged property following the sheriff's sale and has a
prior personal relationship with the foreclosed homeowner.
new text end

new text begin Subd. 3. new text end

new text begin Private right of action. new text end

new text begin (a) Any person who violates subdivision 2 is liable
to the mortgagor for the sum of:
new text end

new text begin (1) actual, incidental, and consequential damages;
new text end

new text begin (2) $1,000 statutory damages; and
new text end

new text begin (3) costs, disbursements, and reasonable attorney fees.
new text end

new text begin (b) It shall be a rebuttable presumption that a person has complied with subdivision
2 if the person has recorded with the county recorder or registrar of titles an affidavit by a
person having knowledge of the facts, stating that the mortgagor received the notice
required under subdivision 2. The affidavit and a certified copy of a recorded affidavit
shall be prima facie evidence of the facts stated in the affidavit.
new text end

Sec. 5. new text begin EXPIRATION.
new text end

new text begin Section 4 expires December 31, 2012.
new text end