HF 2823

as introduced - 87th Legislature (2011 - 2012) Posted on 03/12/2012 01:59pm

A bill for an act
relating to real estate; enacting the Supporting Responsible Homeowners and
Stabilizing Neighborhoods Act; providing homeowner opportunities in regard
to underwater mortgage loans and foreclosure relief on residential homestead
property; amending Minnesota Statutes 2010, section 580.02; Minnesota Statutes
2011 Supplement, section 580.041, subdivision 2; proposing coding for new
law in Minnesota Statutes, chapters 47; 580; proposing coding for new law as
Minnesota Statutes, chapter 584.

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

Section 1.

new text begin [47.22] REFINANCING OPPORTUNITY REQUIRED; CERTAIN
UNDERWATER HOME MORTGAGE LOANS.
new text end

new text begin Subdivision 1. new text end

new text begin Qualifications. new text end

new text begin This section applies to:
new text end

new text begin (1) a bank chartered in this state; and
new text end

new text begin (2) a home mortgage loan customer of the bank whose mortgage loan:
new text end

new text begin (i) was originated prior to January 1, 2009;
new text end

new text begin (ii) is current on payments;
new text end

new text begin (iii) had not been delinquent at any time within the preceding 12 months;
new text end

new text begin (iv) has a current interest rate of 5.25 percent or higher; and
new text end

new text begin (v) has a loan-to-value ratio in excess of 100 percent.
new text end

new text begin Subd. 2. new text end

new text begin Opportunity to refinance. new text end

new text begin A bank described in subdivision 1, clause (1),
must offer to an existing home mortgage loan customer described in subdivision 1, clause
(2), an opportunity to refinance the loan at a lower interest rate. The offer must not be
conditional upon the customer's payment of fees to the bank that exceed the cost actually
and reasonably incurred in connection with the refinancing. The offer to refinance must
be made no later than 60 days after the date of enactment of this bill. The offer must
remain available for acceptance by the borrower for at least 60 days after the date the
offer is communicated.
new text end

new text begin Subd. 3. new text end

new text begin Consequence of noncompliance by the bank. new text end

new text begin If the bank does not
comply with subdivision 2, and the bank begins foreclosure of the mortgage, the
redemption period shall be 12 months, notwithstanding a shorter period specified in
Minnesota Statutes, section 580.23.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

new text begin [47.221] TRANSPARENCY IN LOAN MODIFICATION CRITERIA.
new text end

new text begin A state-chartered bank shall provide to all of its residential mortgage loan customers
in writing the criteria the bank uses in determining eligibility for a loan modification. The
bank shall provide the criteria at least once per year, within 30 days after each change in
the criteria, and upon request. If the bank denies an application for a loan modification,
the bank shall notify the customer in writing within five days of the decision and provide
an explanation of how the customer failed to meet the criteria. The bank must provide
the customer with accurate information about the lender.
new text end

Sec. 3.

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

Sec. 4.

new text begin [47.223] NO FEES FOR SERVICES NOT PROVIDED.
new text end

new text begin A mortgage lender or mortgage broker shall not charge fees or other charges in
connection with origination of a mortgage loan for alleged services that the lender or
broker did not provide or fees or charges that exceed the cost paid to a third party for
products or services provided through the lender or broker by a third party.
new text end

Sec. 5.

Minnesota Statutes 2010, section 580.02, is amended to read:

580.02 REQUISITES FOR FORECLOSURE.

To entitle any party to make such foreclosure, 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; deleted text begin and
deleted text end

(4) before the notice of pendency as required under section 580.032 is recorded, the
party has complied with section 580.021 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (5) that if the mortgagor has requested a loan modification of the mortgage loan on
the mortgagor's homestead, the mortgagee has rejected the request by notice in writing
to the mortgagor. This requirement does not apply to a mortgagor's request for a loan
modification made sooner than 60 days after a previous request by the mortgagor for
a loan modification on the same mortgage loan was rejected by the mortgagee. The
mortgagee cannot begin or continue a foreclosure if a loan modification request has been
submitted, is under consideration, is pending, or if there has been a loan modification and
the mortgagor is not in default on the modified loan.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for foreclosures commenced on or
after June 1, 2012.
new text end

Sec. 6.

new text begin [580.0211] FORECLOSURE FORBEARANCE FOR FINANCIAL
HARDSHIP OF UNEMPLOYED LONG-TERM HOMEOWNERS.
new text end

new text begin (a) Upon request and proof of eligibility provided by the mortgagor, a mortgagee
shall defer commencement or continuation of a mortgage foreclosure for at least 12
months for mortgagors: (1) who have lived in their current home that is subject to the
mortgage for at least ten years; and (2) at least one of whom is unemployed and eligible
for unemployment compensation or whose eligibility for it has expired.
new text end

new text begin (b) Mortgagors who qualify under paragraph (a) and have lived in their current home
that is subject to the mortgage for at least 20 years may request, and the mortgagee must
provide, a deferral of commencement or continuation of foreclosure of at least 24 months.
new text end

new text begin (c) A mortgagor may request and receive a deferral under paragraph (a) or (b) at
any time before or during a foreclosure.
new text end

new text begin (d) Interest may continue to accrue on the loan, unless otherwise agreed between
the parties.
new text end

new text begin (e) The mortgagee must notify in writing, as part of the notice of default, any
potentially eligible mortgagor of the mortgagor's rights under this section.
new text end

Sec. 7.

Minnesota Statutes 2011 Supplement, section 580.041, subdivision 2, is
amended to read:

Subd. 2.

Content of foreclosure advice notice.

The foreclosure advice 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 (or "reinstate" your mortgage). You must pay this amount,
plus interest and other costs, 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. new text begin You may be eligible for
a loan modification from your lender. You have the right to ask your lender for a
statement in writing describing how the lender decides whether to agree to modify a
loan. new text end 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 or contact the United States Department of Housing and Urban
Development at 1-800-569-4287 or www.hud.gov to get the phone number and
location of the nearest certified counseling organization. Call today. The longer you
wait, the fewer options you may have for a desirable result."

Sec. 8.

new text begin [584.01] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For purposes of this chapter, the terms defined in this section
have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Affidavit of compliance. new text end

new text begin "Affidavit of compliance" means a sworn
affidavit recorded by the mortgagee with the county recorder or registrar of titles as
required under section 584.02.
new text end

new text begin Subd. 3. new text end

new text begin Completed loan modification application. new text end

new text begin "Completed loan modification
application" means all the documents and information reasonably necessary for a
mortgagee to determine the mortgagor's eligibility for a loan modification program have
been provided to the mortgagee.
new text end

new text begin Subd. 4. new text end

new text begin Foreclosure. new text end

new text begin "Foreclosure" means foreclosure of a residential mortgage
loan by advertisement under chapter 580, by action under chapter 581, or by any other
method permitted by law.
new text end

new text begin Subd. 5. new text end

new text begin Incomplete loan modification application. new text end

new text begin "Incomplete loan modification
application" means a loan modification application that lacks documents or information
necessary for a completed loan modification application, or a written submission from or
on behalf of a mortgagor demonstrating the mortgagor's intent to seek a loan modification.
new text end

new text begin Subd. 6. new text end

new text begin Loan modification. new text end

new text begin "Loan modification" means a permanent alteration to
the terms and conditions of a residential mortgage loan under a loan modification program.
new text end

new text begin Subd. 7. new text end

new text begin Loan modification notice. new text end

new text begin "Loan modification notice" means the notice
required by section 584.04.
new text end

new text begin Subd. 8. new text end

new text begin Loan modification program. new text end

new text begin "Loan modification program" means any
federal, state, or local government program that requires the mortgagee to make a loan
modification to a residential mortgage loan or any other loan modification program
the mortgagee offers voluntarily or offers or is required to offer in compliance with a
settlement, court judgment, consent decree, or other resolution of a legal proceeding.
new text end

new text begin Subd. 9. new text end

new text begin Mortgagee. new text end

new text begin "Mortgagee" means a person foreclosing a residential
mortgage, and any agent or employee of that person acting in connection with the
foreclosure of a residential mortgage, including but not limited to a mortgagee, a mortgage
servicer, or the owner of the mortgage loan.
new text end

new text begin Subd. 10. new text end

new text begin Residential mortgage loan. new text end

new text begin "Residential mortgage loan" means a
mortgage loan on real property consisting of one to four family dwelling units, one of
which the owner occupies as the owner's principal place of residency at the time of default.
new text end

new text begin Subd. 11. new text end

new text begin Telephone contact attempt. new text end

new text begin "Telephone contact attempt" means an
attempt by the mortgagee to contact the mortgagor that complies with the requirements
of section 584.03, subdivision 4.
new text end

Sec. 9.

new text begin [584.02] REQUISITES TO FORECLOSE.
new text end

new text begin Subdivision 1. new text end

new text begin Required recording of loan modification affidavit of compliance
before foreclosure. new text end

new text begin No foreclosure shall commence until the mortgagee has complied
with this chapter. Before the notice required by section 580.021 is provided to the
mortgagor, the mortgagee must record an affidavit of compliance. The affidavit must be
accurate and must attach supporting documents that establish that all requirements of
this chapter have been met. The affidavit must include the date, time, and name of the
representative who made each required telephone contact attempt. Within five days of
recording this affidavit, the mortgagee shall mail a copy of the affidavit to the mortgagor.
new text end

new text begin Subd. 2. new text end

new text begin Form of affidavit of compliance. new text end

new text begin To comply with the requirements of this
chapter, a mortgagee must record an affidavit of compliance that appears substantially
as follows:
new text end

new text begin LOAN MODIFICATION AFFIDAVIT OF COMPLIANCE
new text end

new text begin [Identifying information relating to the case, such as party names, addresses, contact
information, etc.]
new text end

new text begin The undersigned, being duly sworn, hereby deposes and says:
new text end

new text begin 1. I am the [job title] of [mortgagee] and am authorized to sign on behalf of
[mortgagee].
new text end

new text begin 2. I am familiar with the business records and procedures of [mortgagee].
new text end

new text begin 3. I have specific knowledge of the mortgage loan held by the mortgagor and of
all information sworn to in this affidavit.
new text end

new text begin 4. [Mortgagee] has the right to proceed with foreclosure and is not required to offer
a loan modification to mortgagor because (mortgagee MUST list one of the following
reasons):
new text end

new text begin (1) Prior to mortgagor applying for a loan modification, [mortgagee] had reliable
information that led the [mortgagee] in good faith to conclude that the mortgagor is
ineligible for a loan modification program and has notified the mortgagor of that; (2)
mortgagor did not send to [mortgagee] a loan modification application within 60 days
of the sending of the loan modification notice; (3) mortgagor sent an incomplete loan
modification application, was notified by [mortgagee] of the deficiencies, and has not
remedied the missing information by the deadline for a completed loan modification
application; (4) mortgagor sent a completed loan modification application, but based
upon reliable information, and in good faith, [mortgagee] has concluded that mortgagor
is ineligible for a modification and has notified the mortgagor; (5) mortgagor has sent a
completed loan modification application and has been offered a loan modification, but
has elected not to accept the modification offer; (6) [mortgagee] has previously granted a
mortgage loan modification to mortgagor, and mortgagor is in default on that mortgage
loan modification agreement; and (7) [mortgagee] has concluded in good faith that
mortgagor is not eligible for any additional mortgage loan modification.
new text end

new text begin 5. [Mortgagee] has notified the mortgagor of the reason listed above and complied
with all notice requirements of this chapter.
new text end

new text begin 6. Attached are documents which [mortgagee] represents to be accurate and correct
and which support the reason listed above.
new text end

new text begin [Mortgagee must attach supporting documents that establish that all requirements
of this chapter have been met].
new text end

new text begin Signature: [agent of mortgagee]
new text end

new text begin Legibly printed name [agent of mortgagee]
new text end

Sec. 10.

new text begin [584.03] NOTICE REQUIREMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin General. new text end

new text begin Notices required by this chapter must comply with the
requirements of this section.
new text end

new text begin Subd. 2. new text end

new text begin Form of written notice. new text end

new text begin Written notices required by this chapter must
be in 14-point boldface type. The color and format of the notice must 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 separate page and must not be accompanied by any
other documents or notices other than as specified in this chapter. The envelope or mailing
package in which the notice is sent must be colored and contain the phrase "LOAN
MODIFICATION INFORMATION" and "NOTICE REQUIRED BY THE STATE OF
MINNESOTA" in a minimum of 14-point boldface type, located above the recipient's
name and address. The written notices required by this chapter shall not contain any bills,
requests for payment of current or past due amounts, collection notices, or references to
collection of any kind, unless any such information is necessary for the determination
of loan modification or is requested by the mortgagor. Any time a written response is
required by the mortgagor, the mailing must include a return-addressed envelope. Any
return-addressed envelope required by this chapter must state conspicuously, "Please
consider sending this letter by a method that provides proof of delivery."
new text end

new text begin Subd. 3. new text end

new text begin Delivery of written notices. new text end

new text begin Notices required by this chapter must be
sent to the last known address of the mortgagor. Notices must be sent by a method that
provides proof of delivery. Notices required by this chapter shall also be transmitted
within one business day in substantially similar form by e-mail to the mortgagor if the
mortgagee has a valid e-mail address for the mortgagor.
new text end

new text begin Subd. 4. new text end

new text begin Telephone contact attempt. new text end

new text begin A telephone contact attempt by a mortgagee
under this chapter must meet the following requirements:
new text end

new text begin (1) the mortgagee shall use the last known telephone number of the mortgagor;
new text end

new text begin (2) no call shall be initiated by the mortgagee between 9:00 p.m. and 8:00 a.m. in
the mortgagor's time zone;
new text end

new text begin (3) all calls must be conducted by a live representative, and the use of automated
dialers is prohibited; and
new text end

new text begin (4) the representative of the mortgagee must be authorized to and reasonably capable
of discussing available loan modification programs and must encourage the mortgagor to
take the next applicable steps for loan modification.
new text end

new text begin Subd. 5. new text end

new text begin Transparency of loan modification formula. new text end

new text begin The mortgagee shall publish
on a Web site any net present value (NPV) formula the mortgagee uses to make any
determination of eligibility under a loan modification program. Any NPV or similar tests
and any data inputs used for making the determination of eligibility for a loan modification
for a mortgagor must be retained by the mortgagee for a period of three years and must be
provided to the mortgagor within seven days of request by the mortgagor.
new text end

Sec. 11.

new text begin [584.04] NOTICES OF LOAN MODIFICATION AVAILABILITY.
new text end

new text begin Subdivision 1. new text end

new text begin Notice required. new text end

new text begin A mortgagee shall provide to the mortgagor the
notices required by this section. The mortgagee may record an affidavit of compliance if
the mortgagor fails to mail to the mortgagee a completed loan modification application
or an incomplete loan modification application within 60 days of the mortgagee sending
the notices.
new text end

new text begin Subd. 2. new text end

new text begin Loan modification notice. new text end

new text begin The mortgagee shall send to the mortgagor a
notice that appears substantially as follows:
new text end

new text begin Loan Modification Notice
new text end

new text begin Date of Notice: (insert date sent)
new text end

new text begin Name of Mortgagor(s):
new text end

new text begin Why You are Getting This Notice
new text end

new text begin You may be eligible to prevent foreclosure by receiving a loan modification under
a loan modification program. If you apply for a loan modification within 60 days from
the date of this notice, you will have certain rights under Minnesota law to a prompt
evaluation of your request for a loan modification.
new text end

new text begin You may apply for a loan modification by completing the enclosed Loan
Modification Application and providing all requested information. We have included a
return-addressed envelope for your convenience. Please consider sending these documents
by a method that provides proof of delivery to ensure accurate record keeping.
new text end

new text begin Please Read Carefully
new text end

new text begin Please make sure to read this letter carefully so that you can take advantage of your
potential options for a loan modification. Please make sure all documents mentioned in
this letter are enclosed or available to you, and contact us immediately if a document is
missing.
new text end

new text begin Foreclosure Prevention Counselor
new text end

new text begin We strongly encourage you to contact a foreclosure prevention counselor from the
list below, and have the counselor review and assist you with your loan modification
application.
new text end

new text begin Contact Information
new text end

new text begin [Mortgagee contact information, including mailing address, toll-free telephone
number, and e-mail address.]
new text end

new text begin [Contact information for at least one HUD-certified foreclosure counseling agency
that serves the county in which the mortgagor lives and contact information for the
Minnesota Home Ownership Center. Include: name, mailing address, toll-free telephone
number, e-mail address, and Web site.]
new text end

new text begin Subd. 3. new text end

new text begin Application for loan modification. new text end

new text begin The mortgagee shall send with the
notice required by subdivision 2 an application form that appears substantially as follows:
new text end

new text begin Application for Loan Modification
new text end

new text begin YOU MAY BE ELIGIBLE FOR A LOAN MODIFICATION TO AVOID FORECLOSURE
new text end

new text begin Date of Notice: (insert date sent)
new text end

new text begin Name of Mortgagor(s):
new text end

new text begin Property Address:
new text end

new text begin Please complete this loan application form and attach the documents and information
requested from the "required documents list." Return the completed application to the
address at the bottom of this form within 60 days of the date of this form.
new text end

new text begin For questions or assistance completing this application, please contact [mortgagee
representative(s) who can provide assistance] at [telephone number of representative(s)] or
[e-mail address of representative(s)] immediately; OR [loan counselor(s) who can provide
assistance] at [telephone number of counselor(s)] or [e-mail address of counselor(s).]
new text end

new text begin Required Documents List. The following documents must be sent to us in order for
us to process your loan modification application.
new text end

new text begin [All documents required by the applicable Loan Modification Program, listed
separately and numbered, with attached documents listed first.]
new text end

new text begin Attached Documents List. To make your application as easy as possible, we have
included some of the documents you need to complete in order to apply for a modification.
These documents are listed below. Remember that they must be sent with all materials
listed in the Required Documents List. Please verify that every document listed below is
included:
new text end

new text begin [All documents required by the applicable loan modification program which can be
provided by the mortgagee must be attached, listed separately, and numbered.]
new text end

new text begin If any of these documents is not included in this packet, please contact [mortgagee
representative(s) who can forward the missing information] at [telephone number of
representative(s)] or [e-mail address of representative(s)] immediately.
new text end

new text begin PLEASE MAKE A COPY OF ALL ENCLOSED FORMS AND DOCUMENTS
FOR YOUR RECORDS.
new text end

new text begin For accurate record keeping, we strongly encourage you to send this completed form
and all requested documents with return receipt requested or by other method with proof
of delivery to the address below:
new text end

new text begin [mortgagee's mailing address]
new text end

new text begin Thank you. [Mortgagee] will contact you within 30 days of receipt to inform you of
the status of your loan modification application.
new text end

new text begin Subd. 4. new text end

new text begin Required attached documents. new text end

new text begin The mortgagee shall enclose any
documents required for a completed loan modification application which can be provided
by the mortgagee.
new text end

new text begin Subd. 5. new text end

new text begin Telephone contact attempt required. new text end

new text begin The mortgagee is required to make
six telephone contact attempts to inform the mortgagor of possible eligibility for a loan
modification program within 50 days after the date the loan modification notice is sent. If
the mortgagee speaks with the mortgagor or someone authorized to speak on behalf of the
mortgagor, no further contact attempts are required under this subdivision.
new text end

new text begin Subd. 6. new text end

new text begin Deadline notice. new text end

new text begin If the mortgagee has not received a completed loan
modification application or incomplete loan modification application 50 days after the date
the loan modification notice is sent, the mortgagor shall within five days do the following:
(1) make one telephone contact attempt to inform the mortgagor of the approaching
deadline and communicate to the mortgagor the documents necessary to submit a loan
modification application; and (2) if mortgagee has an e-mail address for the mortgagor,
send an e-mail to the mortgagor stating the approaching deadline.
new text end

Sec. 12.

new text begin [584.05] NOTICE OF INCOMPLETE LOAN MODIFICATION
APPLICATION.
new text end

new text begin Subdivision 1. new text end

new text begin Receipt of incomplete loan modification application. new text end

new text begin If the
mortgagor mails an incomplete loan modification application within 60 days of the
date the loan modification notice is sent by the mortgagee, the mortgagee must send to
the mortgagor the notice required by subdivision 2 within ten days of the receipt of the
incomplete loan application. The mortgagee may record an affidavit of compliance if the
mortgagor has not mailed to the mortgagee a completed loan application within 30 days
after the date of mailing of the notice required by subdivision 2, but not less than 60 days
after the date the loan modification notice is sent by the mortgagee.
new text end

new text begin Subd. 2. new text end

new text begin Incomplete loan modification application notice. new text end

new text begin If an incomplete loan
modification application has been received by the mortgagee, the mortgagee must send a
notice to the mortgagor that appears substantially as follows:
new text end

new text begin NOTICE OF INCOMPLETE LOAN MODIFICATION APPLICATION
new text end

new text begin Date of Notice: (insert date sent)
new text end

new text begin Name of Mortgagor(s):
new text end

new text begin You recently submitted an application for a loan modification. Unfortunately, it was
not complete. We require more information to evaluate your eligibility for a modification.
new text end

new text begin PLEASE SUBMIT THE FOLLOWING DOCUMENTS AS SOON AS POSSIBLE:
new text end

new text begin [numbered list of all missing or incomplete documents, described in plain language.
For each incomplete document, the mortgagee must describe in plain language the
information that is missing.]
new text end

new text begin PLEASE NOTE: We must receive this information within 30 days of the date of
this notice for you to protect certain rights under Minnesota law to a prompt evaluation
of your request for a loan modification.
new text end

new text begin Subd. 3. new text end

new text begin Inclusions with incomplete loan modification application. new text end

new text begin The
second page of this notice must be a glossary describing the nature of any missing or
incomplete documents and in plain language where the documents are available and how
to submit them. If the mortgagor has partially completed a form from section 584.04, any
information from that form must be included on the copy sent to the mortgagor pursuant
to this section, with the locations of the missing information conspicuously marked.
new text end

new text begin Subd. 4. new text end

new text begin Telephone contact attempts. new text end

new text begin The mortgagee must make three telephone
contact attempts to inform the mortgagor of any deficiencies necessary to make a
completed loan modification application. The first telephone contact attempt must be
made within ten days of receipt of the incomplete loan modification application and all
three attempts must be completed within 15 days of the first attempt.
new text end

Sec. 13.

new text begin [584.06] NOTICE OF DETERMINATION.
new text end

new text begin Subdivision 1. new text end

new text begin Determination required. new text end

new text begin The mortgagee must determine eligibility
for each loan modification program for which the mortgagor may be eligible and issue a
notice of determination as specified under this section within 30 days of the receipt of a
completed loan modification application. The mortgagee shall comply with all guidelines
and requirements of each loan modification program in connection with this determination.
new text end

new text begin Subd. 2. new text end

new text begin Loan modification offer. new text end

new text begin If the mortgagee determines that the mortgagor
is eligible for a loan modification program, the mortgagee shall state the following in
plain language in a written notice of the loan modification offer or offers for each loan
modification program for which the mortgagor is eligible: a description of the terms of the
modified loan offer; an explanation of any required timeline to respond to the offer; that the
mortgagee is permitted to initiate foreclosure proceedings upon failure of the mortgagor to
accept the offer; instructions regarding how the mortgagor should respond to the offer; and
accurate contact information for how the mortgagor should respond to the offer.
new text end

new text begin Subd. 3. new text end

new text begin Refusal to offer loan modification. new text end

new text begin If the mortgagee determines that the
mortgagor is not eligible for any loan modification program, the mortgagee shall state the
following in plain language in a written notice: the timeline and procedures, if applicable,
for how the mortgagor may request review of the determination; that failure to do so will
free the mortgagee to initiate foreclosure proceedings; and the toll-free telephone number,
address, e-mail address, and other contact information that will provide access during
regular business hours to a live representative authorized to discuss the determination
on behalf of the mortgagee. The timeline for the mortgagor to request a review of the
determination must be at least 30 days after the date of mailing of the written notice of
ineligibility and must be stated prominently in the written notice of ineligibility. The
written notice of ineligibility must be accompanied by a form for the mortgagee to use in
appealing the determination of ineligibility. The mortgagee may record an affidavit of
compliance after making a determination in good faith that the mortgagor is ineligible for
a loan modification, but the mortgagee shall not record an affidavit of compliance until at
least 35 days after mailing the notice of ineligibility.
new text end

new text begin Subd. 4. new text end

new text begin General inclusions. new text end

new text begin Any notice described in this section must contain
a detailed, clear description of any and all net present value (NPV) calculations used in
making the determination, instructions explaining how to access the published NPV
calculations contained on the mortgagee's Web site as required under section 584.03,
subdivision 5, and a plain language statement that if the mortgagor believes there is an
error in any element of the determination that the mortgagor has the right to contact an
attorney or loan counselor for assistance. This mailing must include any and all data
inputs used in the NPV calculations, which must be on a separate piece of paper.
new text end

Sec. 14.

new text begin [584.07] NOTICE FOR INELIGIBLE HOMEOWNER.
new text end

new text begin The mortgagee may record an affidavit of compliance if, prior to sending the loan
modification notices, the mortgagee has reliable information that leads the mortgagee in
good faith to conclude that the mortgagor is ineligible for any applicable loan modification
program. Ten days prior to recording the affidavit of compliance, the mortgagee must
send a written communication to the ineligible mortgagor. This written communication
must contain a plain language statement explaining why the mortgagor is ineligible,
and a toll-free telephone number, address, and e-mail address of a representative of the
mortgagee that the mortgagor may contact to dispute any finding of ineligibility. The
plain language statement must state that the mortgagor may contact a loan counselor or
foreclosure prevention counselor for advice.
new text end

Sec. 15.

new text begin [584.08] ENFORCEMENT; REMEDIES.
new text end

new text begin Subdivision 1. new text end

new text begin Private right of action. new text end

new text begin A mortgagee who fails to comply with any
provision of this chapter is liable to a mortgagor for actual, incidental, and consequential
damages in a private right of action and for any or all other remedies specified in this
section.
new text end

new text begin Subd. 2. new text end

new text begin Statutory damages. new text end

new text begin (a) A mortgagee who violates any provision of this
chapter is liable to the mortgagor for up to $2,000 for each violation.
new text end

new text begin (b) De minimus violations are not subject to the statutory damages available under
this subdivision.
new text end

new text begin Subd. 3. new text end

new text begin Punitive damages. new text end

new text begin (a) A mortgagor is entitled to punitive damages under
paragraphs (b) and (c) and section 549.20.
new text end

new text begin (b) The court may award punitive damages if the mortgagee has failed to issue
a notice of determination within 30 days of the mortgagee's receipt of a completed
loan modification application. There is a rebuttable presumption that all required
documentation has been provided to the mortgagee for purposes of a completed loan
modification application if the mortgagor can provide:
new text end

new text begin (1) copies of all such required documents to the court; and either
new text end

new text begin (2) proof of mortgagee's receipt of a completed loan modification application; or
new text end

new text begin (3) a sworn affidavit by a HUD-approved counseling agency or substantially similar
third party that those documents were sent to the mortgagee.
new text end

new text begin (c) The court may award punitive damages to the mortgagor if the mortgagee did not
in good faith attempt to comply with the standards, duties, prohibitions, or requirements of
this chapter. Factors the court must consider in determining a lack of good faith include,
but are not limited to:
new text end

new text begin (1) the frequency, nature, and persistence of noncompliance;
new text end

new text begin (2) a pattern of violations;
new text end

new text begin (3) the extent to which the violation was reckless or intentional; or
new text end

new text begin (4) a violation that results in, or substantially contributes to, the mortgagor's loss
of home.
new text end

new text begin Subd. 4. new text end

new text begin Injunctive relief. new text end

new text begin The court may issue an injunction to prevent violations
of this chapter and to enjoin foreclosure in violation of this chapter.
new text end

new text begin Subd. 5. new text end

new text begin Reimbursement for litigation costs. new text end

new text begin A prevailing plaintiff shall recover
costs and disbursements of the action, plus reasonable attorney fees.
new text end

new text begin Subd. 6. 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 remedy that is otherwise available.
new text end

new text begin Subd. 7. new text end

new text begin Public enforcement. new text end

new text begin (a) The attorney general may enforce this chapter
under section 8.31.
new text end

new text begin (b) The commissioner of commerce may enforce this chapter under chapter 45.
new text end

Sec. 16.

new text begin [584.09] APPLICABILITY TO PRIORITY OF LOANS.
new text end

new text begin A loan modification, as defined in section 584.01, does not affect the priority of the
lien of the mortgage that secures the loan.
new text end

Sec. 17. new text begin EFFECTIVE DATE; APPLICABILITY.
new text end

new text begin Sections 8 to 16 are effective 60 days after enactment and apply to foreclosures of
residential mortgages commenced on or after that date.
new text end