HF 2818

as introduced - 87th Legislature (2011 - 2012) Posted on 03/14/2012 11:35am

A bill for an act
relating to real estate; requiring lender response to short sale requests; specifying
consequences of nonresponse; proposing coding for new law in Minnesota
Statutes, chapter 47.

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

Section 1.

new text begin [47.222] RESPONSE TO SHORT SALE REQUESTS.
new text end

new text begin Subdivision 1. new text end

new text begin Short sale defined. new text end

new text begin For purposes of this section, "short sale" means a
sale by a homeowner of the homeowner's mortgaged home to a buyer for a price that is
less than the amount owed on the mortgage loan.
new text end

new text begin Subd. 2. new text end

new text begin Prompt response by lender. new text end

new text begin If a homeowner requests approval of the
lender for a short sale of property on which the lender holds a mortgage, the lender must
respond in writing to the request, either accepting it, denying it, or accepting it subject to
conditions, within 30 days after receiving the request. The response by the lender must
state the reason or reasons for a denial or for an acceptance subject to conditions.
new text end

new text begin Subd. 3. new text end

new text begin Effect of failure to respond by lender. new text end

new text begin If the lender fails to respond
in compliance with subdivision 2, the homeowner becomes entitled to a redemption
period of 12 months and the loss of any right the lender might otherwise have to obtain
a deficiency judgment in the event of a future foreclosure of the loan. This subdivision
applies notwithstanding anything to the contrary in section 580.23.
new text end