HF 2825

as introduced - 87th Legislature (2011 - 2012) Posted on 03/13/2012 10:24am

A bill for an act
relating to financial institutions; requiring banks chartered under the laws of
this state to provide relief for certain home mortgage loan customers whose
loan balance exceeds the value of their homes; providing a consequence for
noncompliance by the bank; 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 [47.22] REFINANCING OPPORTUNITY REQUIRED; CERTAIN
HOME MORTGAGE LOAN BORROWERS.
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:
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new text begin (1) a bank chartered in this state; and
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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;
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new text begin (ii) is current on payments;
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new text begin (iii) had not been delinquent at any time within the preceding 12 months;
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new text begin (iv) has a current interest rate of 5.25 percent or higher; and
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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 section. 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 is 12 months, notwithstanding a shorter period specified in 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