as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am
|Introduction||Posted on 05/14/2004|
1.1 A bill for an act 1.2 relating to real property; mortgages; enacting the 1.3 Uniform Nonjudicial Foreclosure Act approved and 1.4 recommended for enactment in all states by the 1.5 National Conference of Commissioners on Uniform State 1.6 Laws; proposing coding for new law as Minnesota 1.7 Statutes, chapter 584. 1.8 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.9 ARTICLE 1 1.10 DEFINITIONS AND OTHER GENERAL PROVISIONS 1.11 Section 1. [584.101] [SHORT TITLE.] 1.12 This chapter may be cited as the "Uniform Nonjudicial 1.13 Foreclosure Act." 1.14 Sec. 2. [584.102] [DEFINITIONS.] 1.15 Subdivision 1. [SCOPE.] For purposes of this chapter, the 1.16 following terms have the meanings given. 1.17 Subd. 2. [COLLATERAL.] "Collateral" means property, real 1.18 or personal, subject to a security interest. 1.19 Subd. 3. [COMMON INTEREST COMMUNITY.] "Common interest 1.20 community" means real property with respect to which a person, 1.21 by virtue of ownership of a unit, is obligated to pay for real 1.22 property taxes, insurance premiums, maintenance, or improvement 1.23 of other real property described in a declaration or other 1.24 governing documents, however denominated. In this subdivision, 1.25 "ownership" includes a leasehold interest if the period of the 1.26 lease is at least 20 years, including renewal options. 2.1 Subd. 4. [DAY.] "Day" means calendar day. 2.2 Subd. 5. [DEBTOR.] "Debtor" means a person that owes 2.3 payment or other performance of an obligation, whether absolute 2.4 or conditional, secured under a security instrument. The term 2.5 includes a person that guarantees such an obligation and a 2.6 person that owns property securing such an obligation, whether 2.7 or not the person is personally liable on the obligation. 2.8 Subd. 6. [DOCUMENT.] "Document" means a tangible medium on 2.9 which information is inscribed. 2.10 Subd. 7. [EXPENSES OF FORECLOSURE.] "Expenses of 2.11 foreclosure" means the lesser of the reasonable expenses 2.12 incurred by a foreclosing creditor or the maximum amounts 2.13 permitted by other law of this state for expenses in connection 2.14 with a foreclosure, including a foreclosure discontinued under 2.15 section 584.601. These expenses include costs of transmission 2.16 of notices, advertising, title evidence, inspections and 2.17 examinations of the collateral, management and securing of the 2.18 collateral, insurance, filing and recording fees, attorney fees 2.19 and litigation expenses incurred to the extent provided in the 2.20 security instrument or authorized by law, appraisal fees, the 2.21 fee of the person conducting the sale in the case of a 2.22 foreclosure by auction, fees of court-appointed receivers, and 2.23 other expenses reasonably necessary to the foreclosure. 2.24 Subd. 8. [FORECLOSING CREDITOR.] "Foreclosing creditor" 2.25 means a secured creditor that is engaged in a foreclosure under 2.26 this chapter. 2.27 Subd. 9. [GUARANTOR.] "Guarantor" means a person that is 2.28 liable for the debt of another. The term includes a surety and 2.29 an accommodation party. 2.30 Subd. 10. [INDIVIDUAL.] "Individual" means a natural 2.31 person. 2.32 Subd. 11. [INTEREST HOLDER.] "Interest holder" means a 2.33 person that holds a legally recognized interest in real or 2.34 personal property that is subordinate in priority to a security 2.35 interest foreclosed under this chapter. 2.36 Subd. 12. [ORIGINAL NOTICE OF FORECLOSURE.] "Original 3.1 notice of foreclosure" means the first notice of foreclosure 3.2 given under section 584.204 instituting a foreclosure under this 3.3 chapter. 3.4 Subd. 13. [PERSON.] "Person" means an individual, 3.5 corporation, business trust, estate, trust, partnership, limited 3.6 liability company, association, joint venture, government, 3.7 governmental subdivision, agency or instrumentality, public 3.8 corporation, or any other legal or commercial entity. 3.9 Subd. 14. [REAL PROPERTY.] "Real property" means any 3.10 estate or interest in, over, or under land, including minerals, 3.11 structures, fixtures, and other things that by custom, usage, or 3.12 law pass with a conveyance of land whether or not described or 3.13 mentioned in the contract of sale or instrument of conveyance. 3.14 The term includes the interest of a landlord or tenant and, 3.15 unless the interest is personal property under the law of the 3.16 state in which the property is located, an interest in a common 3.17 interest community. 3.18 Subd. 15. [RECORD.] "Record," used as a verb, means to 3.19 submit a document complying with applicable legal standards, 3.20 with required fees and taxes paid, to the county recorder or 3.21 registrar of titles. 3.22 Subd. 16. [RESIDENTIAL DEBTOR.] "Residential debtor" means 3.23 a debtor who is an individual and who owns, or is obligated on 3.24 an obligation secured in whole or in part by, residential real 3.25 property. The term includes a person that is owned or 3.26 controlled by such an individual. 3.27 Subd. 17. [RESIDENTIAL REAL PROPERTY.] "Residential real 3.28 property" means real property that, when a security instrument 3.29 is entered into with respect to the property, is used or is 3.30 intended to be used primarily for the personal, family, or 3.31 household purposes of its owner and is improved, or is intended 3.32 by its owner to be improved, by one to four dwelling units. 3.33 Subd. 18. [SECURED CREDITOR.] "Secured creditor" means a 3.34 creditor that has the right to foreclose a security interest in 3.35 real property. 3.36 Subd. 19. [SECURITY INSTRUMENT.] "Security instrument" 4.1 means a mortgage, deed of trust, security deed, contract for 4.2 deed, land sale contract, lease, or other document that creates 4.3 or provides for an interest in real property to secure payment 4.4 or performance of an obligation, whether by acquisition or 4.5 retention of a lien, a lessor's interest under a lease, or title 4.6 to the real property. A document is a security instrument even 4.7 if it also creates or provides for a security interest in 4.8 personal property. If a security instrument provides that a 4.9 default under any other agreement is a default under the 4.10 security instrument, the security instrument includes the other 4.11 agreement. The term includes a modification or amendment of a 4.12 security instrument and a document creating a lien on real 4.13 property to secure an obligation owed by an owner of the real 4.14 property to an association in a common interest community or 4.15 under covenants running with the real property. 4.16 Subd. 20. [SECURITY INTEREST.] "Security interest" means 4.17 an interest in real or personal property created by a security 4.18 instrument that secures payment or performance of an obligation. 4.19 Subd. 21. [STATE.] "State" means a state of the United 4.20 States, the District of Columbia, Puerto Rico, the United States 4.21 Virgin Islands, or any territory or insular possession subject 4.22 to the jurisdiction of the United States. 4.23 Subd. 22. [TITLE EVIDENCE.] "Title evidence" means a title 4.24 insurance policy, a preliminary title report or binder, a title 4.25 insurance commitment, an attorney's opinion of title based on 4.26 examination of the public records or an abstract, or any other 4.27 means of reporting the state of title to real property which is 4.28 customary in the locality. 4.29 Sec. 3. [584.103] [APPLICATION.] 4.30 (a) Except as otherwise provided in paragraph (b), this 4.31 chapter applies to, and authorizes the nonjudicial foreclosure 4.32 of, every security interest in real property located in this 4.33 state created on or after the effective date of this chapter, if 4.34 the security instrument provides in substance that the security 4.35 interest may be foreclosed under this chapter or by nonjudicial 4.36 process. 5.1 (b) This chapter may not be used to foreclose: 5.2 (1) a security interest in rents or proceeds of real or 5.3 personal property; 5.4 (2) a lien created by statute or operation of law, except a 5.5 lien of an owners' association on property in a common interest 5.6 community; or 5.7 (3) a security interest in property in a common interest 5.8 community if under the law of this state that interest is 5.9 personal property. 5.10 (c) A secured creditor may not give an original notice of 5.11 foreclosure under this chapter if a judicial proceeding is 5.12 pending to foreclose the security interest or to enforce the 5.13 secured obligation against a person primarily liable for the 5.14 obligation. An original notice of foreclosure under this 5.15 chapter may be given even if a judicial proceeding is pending or 5.16 a judicial order has been obtained for appointment of or 5.17 supervision by a receiver of the collateral, possession of the 5.18 collateral, enforcement of an assignment of rents or other 5.19 proceeds of the collateral, collection or sequestration of rents 5.20 or other proceeds of the collateral, or enforcement of the 5.21 secured obligation against a guarantor or a guarantor's property. 5.22 (d) If a security instrument covers both real property and 5.23 personal property, a secured creditor foreclosing under this 5.24 chapter with respect to the real property may also proceed in 5.25 the foreclosure against the personal property to the extent 5.26 permitted by sections 336.9-101 to 336.9-709. 5.27 (e) This chapter does not preclude or govern foreclosure or 5.28 other enforcement of a security interest in real property by 5.29 judicial or other action permitted by law other than this 5.30 chapter. 5.31 Sec. 4. [584.104] [VARIATION BY AGREEMENT.] 5.32 (a) Except as otherwise provided in paragraphs (b) through 5.33 (d), the parties to a security instrument may not vary by 5.34 agreement the effect of a provision of this chapter. 5.35 (b) The time within which a person must respond to a notice 5.36 given by a secured creditor may be extended by agreement. 6.1 (c) The parties to a security instrument may vary the 6.2 effect of a provision of this chapter if the provision expressly 6.3 permits the parties to do so. 6.4 (d) If no debtor under a security instrument is a 6.5 residential debtor: 6.6 (1) the parties by agreement may determine that the 6.7 standards by which performance of an obligation under this 6.8 chapter is to be measured if those standards are not manifestly 6.9 unreasonable; and 6.10 (2) an agreement by a guarantor waiving the right to 6.11 receive notices under this chapter with respect to the 6.12 foreclosure of the property of a debtor whose obligation the 6.13 guarantor has guaranteed is enforceable unless enforcement is 6.14 prohibited by other law. 6.15 Sec. 5. [584.105] [SUPPLEMENTAL PRINCIPLES OF LAW AND 6.16 EQUITY APPLICABLE.] 6.17 Unless displaced by a particular provision of this chapter, 6.18 the principles of law and equity supplement this chapter. 6.19 Sec. 6. [584.106] [DAY OF PERFORMANCE.] 6.20 If this chapter or a notice given under this chapter 6.21 requires performance on or by a certain day and that day is a 6.22 Saturday, Sunday, or legal holiday, the performance is 6.23 sufficient if done on the next day that is not a Saturday, 6.24 Sunday, or legal holiday. 6.25 ARTICLE 2 6.26 NOTICE AND KNOWLEDGE 6.27 Section 1. [584.107] [DEFINITIONS.] 6.28 (a) For purposes of sections 584.107 to 584.112, the 6.29 following terms have the meanings given. 6.30 (b) "Address for notice" means: 6.31 (1) with respect to a notice given by a secured creditor: 6.32 (i) if the intended recipient has given to the secured 6.33 creditor a security instrument or other document in connection 6.34 with a security instrument that contains an address, the most 6.35 recent address in the security instrument or document or the 6.36 most recent address of which the secured creditor has knowledge; 7.1 (ii) if the sources described in this clause do not 7.2 disclose an address, the most recent address that is 7.3 identifiable from examination of the public records in the 7.4 office of the county recorder and, if personal property is being 7.5 foreclosed together with real property, the public records 7.6 containing filings of title transfers and security interests in 7.7 the type of personal property being foreclosed; 7.8 (iii) if the sources described in items (i) and (ii) do not 7.9 disclose an address and the secured creditor knows the intended 7.10 recipient is a tenant, subtenant, or assignee of a leasehold in 7.11 all or part of the real property collateral, the address of the 7.12 real property collateral or some portion thereof, including the 7.13 designation of any office, apartment, or other unit that the 7.14 secured creditor knows is possessed by the recipient, with the 7.15 notice directed to the recipient by name, if known, or otherwise 7.16 "To person occupying property at" followed by the physical 7.17 address or description of the real property collateral; 7.18 (iv) if the secured creditor does not know that the 7.19 intended recipient is a tenant, subtenant, or assignee of a 7.20 leasehold in all or part of the real property collateral and the 7.21 sources described in items (i) and (ii) do not disclose an 7.22 address, an address, if any, determined by reasonable efforts of 7.23 the secured creditor to be a correct address for the recipient 7.24 or, if none can be determined, the address of the real property 7.25 collateral or some portion thereof; or 7.26 (2) with respect to a notice given by a person other than a 7.27 secured creditor, the most recent address stated in a document 7.28 provided by the recipient to the person giving notice. 7.29 (c) "Address of the individual conducting the foreclosure" 7.30 means the address contained in a notice of default under section 7.31 584.202, paragraph (b), clause (6), or a notice of foreclosure 7.32 under section 584.204, paragraph (b), clause (11). 7.33 (d) "Individual conducting the foreclosure" means the 7.34 individual identified in the notice of default pursuant to 7.35 section 584.202, paragraph (b), clause (6), or a notice of 7.36 foreclosure pursuant to section 584.204, paragraph (b), clause 8.1 (11). 8.2 (e) "Notice" means a document containing required 8.3 information and signed by the person required to provide the 8.4 information. 8.5 (f) "Recipient" means a person to which a notice is given. 8.6 (g) "Sign" means to execute or adopt a tangible symbol with 8.7 the present intent to authenticate a document. 8.8 Sec. 2. [584.108] [MANNER OF GIVING NOTICE.] 8.9 (a) Subject to paragraphs (b) through (f), notice is given 8.10 by: 8.11 (1) handing it to the recipient; 8.12 (2) if the recipient's address for notice is an office, 8.13 leaving it at the office with an individual in charge or, if no 8.14 one is in charge, leaving it in a conspicuous place in the 8.15 office; 8.16 (3) if the recipient's address for notice is a dwelling, 8.17 leaving it at the dwelling with an individual of suitable age 8.18 and discretion residing therein; or 8.19 (4) depositing it with the United States Postal Service or 8.20 a commercially reasonable delivery service, properly addressed 8.21 to the recipient's address for notice, with costs of delivery 8.22 paid. 8.23 (b) If the recipient is a residential debtor and the notice 8.24 is given as provided in paragraph (a), clause (4), an additional 8.25 copy of the following notices must be deposited with the United 8.26 States Postal Service, registered or certified mail, properly 8.27 addressed to the recipient's address for notice, with costs of 8.28 delivery paid: 8.29 (1) a notice of default; 8.30 (2) a notice of foreclosure; 8.31 (3) an advertisement of an auction sale under section 8.32 584.303, paragraph (b); 8.33 (4) a notice of proposed negotiated sale under section 8.34 584.403; or 8.35 (5) a notice of appraisal under section 584.503. 8.36 (c) If a person giving a notice under this chapter and the 9.1 recipient have agreed to limit the methods for giving notice 9.2 otherwise permitted by paragraph (a), that limitation is 9.3 enforceable. 9.4 (d) If, at the time of giving a notice, the person giving 9.5 the notice knows that the notice, if directed to the recipient's 9.6 address for notice, will not be received by the recipient, the 9.7 person giving the notice shall make a reasonable effort to 9.8 determine an address for the recipient at which the notice is 9.9 likely to be received and direct the notice to that address, if 9.10 any, in addition to the recipient's address for notice. If an 9.11 address at which the notice is likely to be received cannot be 9.12 determined by a reasonable effort, notice is sufficient if 9.13 directed to the recipient's address for notice. 9.14 (e) If, after giving a notice and before the time of 9.15 foreclosure, a person acquires knowledge that the notice will 9.16 not be received at the address to which the notice was directed, 9.17 the person shall promptly make a reasonable effort to determine 9.18 an address for the recipient at which the notice is likely to be 9.19 received and direct a copy of the notice to that address, if 9.20 any. If an address at which the notice is likely to be received 9.21 cannot be determined by a reasonable effort, the notice given in 9.22 compliance with paragraphs (a) through (d) is sufficient. If a 9.23 copy of the notice is given pursuant to this paragraph: 9.24 (1) if no debtor is a residential debtor, notice sent in 9.25 compliance with paragraphs (a) through (d) satisfies the 9.26 requirements of this chapter for the time for giving notice and 9.27 operates to commence the running of any period that under this 9.28 chapter commences upon the giving of notice; 9.29 (2) if any debtor is a residential debtor, any period that 9.30 under this chapter commences upon the giving of notice runs from 9.31 the date on which the notice is given under this paragraph but 9.32 ends no later than 45 days after the date it would have ended if 9.33 counted from the date of the notice given in compliance with 9.34 paragraphs (a) through (d). 9.35 (f) A notice to a foreclosing creditor is sufficiently 9.36 addressed if directed to the address of the individual 10.1 conducting the foreclosure. 10.2 (g) If a notice is not given in accordance with paragraphs 10.3 (a) through (e) but is received by the recipient within the time 10.4 it would have been received if properly given, it is treated as 10.5 having been properly given as of the time of receipt. 10.6 Sec. 3. [584.109] [RECEIPT OF NOTICE.] 10.7 (a) A notice is received by a foreclosing creditor: 10.8 (1) when it is delivered to and available at the address of 10.9 the individual conducting the foreclosure; or 10.10 (2) when it is brought to the attention of the individual 10.11 conducting the foreclosure, or when it would have been brought 10.12 to that individual's attention if the recipient had exercised 10.13 reasonable diligence. 10.14 (b) A notice is received by a recipient other than a 10.15 foreclosing creditor: 10.16 (1) when it is delivered to and available at a place that 10.17 satisfies the requirements of section 584.108 for giving notice 10.18 to that recipient; 10.19 (2) if the recipient is an individual, when it comes to the 10.20 recipient's attention; or 10.21 (3) if the recipient is not an individual, when it is 10.22 brought to the attention of the individual responsible for the 10.23 transaction involving the security instrument or when it would 10.24 have been brought to that individual's attention if the 10.25 recipient had exercised reasonable diligence. 10.26 Sec. 4. [584.110] [SUFFICIENCY OF NOTICE.] 10.27 A notice that contains minor errors or information not 10.28 required by law is sufficient if the errors are not misleading 10.29 and the information does not obscure the required information. 10.30 Sec. 5. [584.111] [REVOCATION OF NOTICE.] 10.31 Except as otherwise provided in section 584.601, a person 10.32 that has given a notice may revoke it by a subsequent notice 10.33 unless the recipient materially changed its position in reliance 10.34 on the notice before receiving the revocation. 10.35 Sec. 6. [584.112] [KNOWLEDGE.] 10.36 (a) A person knows or has knowledge of a fact if: 11.1 (1) the person has actual knowledge of the fact; 11.2 (2) the person has received a notice or notification of the 11.3 fact; or 11.4 (3) from all of the facts and circumstances known to the 11.5 person at the time in question, the person has reason to know 11.6 the fact exists. 11.7 (b) If a foreclosing creditor would have reason to know a 11.8 fact only through an inspection of the collateral, knowledge of 11.9 the fact is imputed to the creditor only to the extent that the 11.10 creditor has made an inspection. 11.11 ARTICLE 3 11.12 PROCEDURES BEFORE FORECLOSURE 11.13 Section 1. [584.201] [RIGHT TO FORECLOSE.] 11.14 A secured creditor has a right to foreclose under this 11.15 chapter if all conditions required by law and the security 11.16 instrument as prerequisites to foreclosure are satisfied. A 11.17 foreclosing creditor may pursue foreclosure by auction, 11.18 negotiated sale, or appraisal or may simultaneously pursue more 11.19 than one of these methods. If the foreclosing creditor pursues 11.20 more than one method of foreclosure, the notice of foreclosure 11.21 must so state. 11.22 Sec. 2. [584.202] [NOTICE OF DEFAULT AND RIGHT TO CURE.] 11.23 (a) Before notice of foreclosure may be given, a 11.24 foreclosing creditor must give a notice of default to each 11.25 debtor, and any period allowed for cure by this section and by 11.26 the security instrument must expire without cure being made. 11.27 (b) A notice of default must identify the collateral and 11.28 the objection and must state: 11.29 (1) with particularity, the facts establishing that a 11.30 default has occurred; 11.31 (2) if the default is curable and cure requires the payment 11.32 of money, the amount to be paid, including the daily rate of 11.33 accrual for amounts accruing over time; 11.34 (3) if the default is curable and cure does not require the 11.35 payment of money, the performance required to cure the default; 11.36 (4) if the default is not curable, that the default cannot 12.1 be cured; 12.2 (5) the time within which cure must be made in order to 12.3 prevent accrual of the secured creditor's right to foreclose; 12.4 (6) the name, street and mailing addresses, and telephone 12.5 number of the foreclosing creditor if the foreclosing creditor 12.6 is an individual or, if the foreclosing creditor is not an 12.7 individual, the name, street and mailing addresses, and 12.8 telephone number of an individual who is a representative of the 12.9 foreclosing creditor, with whom a person may communicate for 12.10 further information concerning the default; and 12.11 (7) that foreclosure may be commenced on account of the 12.12 default and, if the default is curable, that foreclosure will 12.13 not be commenced if the default is cured in a timely manner. 12.14 (c) Subject to paragraph (e) and any additional right to 12.15 cure provided in the security instrument, within 30 days after 12.16 notice of default is given to the last person entitled to the 12.17 notice, any person may: 12.18 (1) if the default is curable by the payment of money, cure 12.19 the default; or 12.20 (2) if the default is curable but cannot be cured by the 12.21 payment of money, promptly commence to cure the default, 12.22 diligently proceed to cure the default, and complete the cure of 12.23 the default within 90 days after the notice of default is given 12.24 to the last person entitled to the notice. 12.25 (d) If no person is proceeding diligently to cure a default 12.26 that is curable but cannot be cured by the payment of money, 30 12.27 days after the date the notice of default was given to the last 12.28 person entitled to the notice the secured creditor may 12.29 immediately terminate the period allowed for cure by this 12.30 section by accelerating payment of the principal amount owing on 12.31 the secured obligation or giving an original notice of 12.32 foreclosure. 12.33 (e) If none of the real property collateral is residential 12.34 real property, the 30-day period specified in paragraph (c) for 12.35 cure of a monetary default may be reduced by a term of the 12.36 security instrument to a period not less than ten days. 13.1 (f) A secured creditor may give a notice of default even if 13.2 a previous notice of default for a different default is pending. 13.3 (g) The rights to notice of default and to cure a default 13.4 provided by this section do not impair or limit any right to 13.5 notice of default or to cure a default provided by the security 13.6 instrument. The period for cure provided by this section and 13.7 any period for cure provided by the security instrument run 13.8 concurrently unless the security instrument provides otherwise. 13.9 (h) If a default is cured within the time for cure provided 13.10 by this section or after expiration of that time but before 13.11 acceleration of the principal amount owing on the secured 13.12 obligation or the giving of an original notice of foreclosure, 13.13 the secured creditor may not give a notice of foreclosure or 13.14 accelerate the principal amount owing on the secured obligation 13.15 because of that default. Any acceleration because of that 13.16 default is ineffective. 13.17 (i) During a period allowed for cure of a default under 13.18 this section, a secured creditor may enforce any remedy, other 13.19 than foreclosure, provided for by the security instrument and 13.20 enforceable under law other than this chapter if enforcement 13.21 does not unreasonably interfere with the ability of the debtor 13.22 against which enforcement is sought to cure a default under this 13.23 section. 13.24 Sec. 3. [584.203] [NOTICE OF FORECLOSURE; MANNER OF 13.25 GIVING.] 13.26 (a) If a secured creditor has a right to foreclose under 13.27 section 584.201, the secured creditor may commence foreclosure 13.28 by giving a notice of foreclosure. The notice is a prerequisite 13.29 to foreclosure and must comply with paragraphs (b) and (c) and 13.30 section 584.204. 13.31 (b) A foreclosing creditor shall record a copy of the 13.32 notice of foreclosure in the office of the county recorder of 13.33 each county in which any part of the real property collateral is 13.34 located. All persons acquiring an interest in the real property 13.35 collateral after the notice of foreclosure is recorded have 13.36 knowledge of its existence and contents. If a notice of 14.1 foreclosure is not recorded, a foreclosure under this chapter is 14.2 void. 14.3 (c) Except as otherwise provided in paragraph (d), a 14.4 foreclosing creditor shall give a notice of foreclosure to each 14.5 of the following persons no later than five days after recording 14.6 the notice of foreclosure under paragraph (b) if the person can 14.7 be identified as of the time the notice of foreclosure is 14.8 recorded: 14.9 (1) any person that the foreclosing creditor knows is a 14.10 debtor; 14.11 (2) any person specified by a debtor in the security 14.12 instrument to receive notice on the debtor's behalf; 14.13 (3) any person shown by the public records in the office of 14.14 the county recorder of the county in which any part of the real 14.15 property collateral is located to be an interest holder in the 14.16 real property collateral; 14.17 (4) any person the foreclosing creditor knows is an 14.18 interest holder in the real property collateral; and 14.19 (5) any person that has recorded in the public records in 14.20 the office of the county recorder of the county in which any 14.21 part of the real property collateral is located a request for 14.22 notice of foreclosure satisfying the requirements of section 14.23 584.205. 14.24 (d) If, after recording the notice of foreclosure, the 14.25 foreclosing creditor acquires knowledge of an interest holder 14.26 whose interest existed at the time the notice of foreclosure was 14.27 recorded, the foreclosing creditor shall give a notice of 14.28 foreclosure to that interest holder no later than five days 14.29 after acquiring the knowledge. 14.30 (e) A foreclosing creditor, within ten days before or after 14.31 recording a notice of foreclosure, shall affix a conspicuous 14.32 sign on the real property collateral stating that foreclosure 14.33 has been commenced and identifying the foreclosing creditor. 14.34 (f) An original notice of foreclosure is ineffective if 14.35 given after the expiration of the period of limitation for 14.36 foreclosure of a security interest in real property by judicial 15.1 proceeding. 15.2 Sec. 4. [584.204] [NOTICE OF FORECLOSURE; CONTENT.] 15.3 (a) The heading of a notice of foreclosure must be 15.4 conspicuous and must contain the following: "NOTICE OF 15.5 FORECLOSURE. YOU ARE HEREBY NOTIFIED THAT YOU MAY LOSE YOUR 15.6 RIGHTS TO CERTAIN PROPERTY. READ THIS NOTICE IMMEDIATELY AND 15.7 CAREFULLY." 15.8 (b) A notice of foreclosure must contain: 15.9 (1) a statement that the foreclosing creditor is commencing 15.10 foreclosure; 15.11 (2) a statement that the foreclosure will terminate the 15.12 rights in the collateral of the person given the notice of 15.13 foreclosure unless the foreclosing creditor elects to give a 15.14 subsequent notice of preservation of interest to that person 15.15 under section 584.210; 15.16 (3) the date of the notice, the name of the owner of the 15.17 collateral as identified in the security instrument, a 15.18 description of the real property collateral as stated in the 15.19 security instrument, the interest in or portion of the 15.20 collateral being foreclosed, a description of any personal 15.21 property collateral to be included in the foreclosure, and, at 15.22 the secured creditor's option, the street address of the real 15.23 property collateral, if any; 15.24 (4) the recording data for the security instrument; 15.25 (5) a statement that a default exists under the security 15.26 instrument and the facts establishing with particularity the 15.27 default; 15.28 (6) a statement that the foreclosing creditor has 15.29 accelerated or, by virtue of the notice, is accelerating the due 15.30 date of the principal amount owing on the secured obligation, 15.31 making that amount immediately due, or a statement that the 15.32 foreclosing creditor elects not to accelerate the due date; 15.33 (7) a statement that the collateral may be redeemed from 15.34 the security interest by payment or performance of the 15.35 obligation in full before foreclosure, the amount to be paid or 15.36 other action necessary to redeem, including a daily amount that 16.1 will allow calculation of the total balance owed as of future 16.2 dates, and an estimate of any further amount the foreclosing 16.3 creditor anticipates expending to protect the collateral; 16.4 (8) a statement of the method or methods of foreclosure the 16.5 foreclosing creditor elects to use and the earliest date on 16.6 which foreclosure will occur if redemption is not made; 16.7 (9) if applicable, an explanation of what a residential 16.8 debtor can do to avoid a claim for a deficiency under section 16.9 584.607; 16.10 (10) if applicable, a statement: 16.11 (i) that the debtor may request a meeting with a 16.12 representative of the foreclosing creditor to object to the 16.13 foreclosure as provided by section 584.206; 16.14 (ii) that the debtor may be advised or assisted by another 16.15 person at the meeting; and 16.16 (iii) of the last date on which the request must be 16.17 received by the foreclosing creditor; 16.18 (11) the name, street and mailing addresses, and telephone 16.19 number of the foreclosing creditor if the foreclosing creditor 16.20 is an individual or, if the foreclosing creditor is not an 16.21 individual, the name, street and mailing addresses, and 16.22 telephone number of an individual who is a representative of the 16.23 foreclosing creditor, with whom a person may communicate for 16.24 further information concerning the foreclosure; and 16.25 (12) an explanation of any workout or loss mitigation plan 16.26 generally available from the foreclosing creditor. 16.27 Sec. 5. [584.205] [REQUEST FOR NOTICE OF FORECLOSURE.] 16.28 (a) Any person may record in the office of the county 16.29 recorder of the county in which the security instrument is 16.30 recorded a request for notice of foreclosure of a recorded 16.31 security instrument. The request must state: 16.32 (1) the recording data for the security instrument; 16.33 (2) the names of the parties to the security instrument; 16.34 (3) the name and mailing address of the person requesting 16.35 notice of foreclosure; and 16.36 (4) a legally sufficient description of the real property 17.1 collateral affected by the security instrument. 17.2 (b) A person that records a request under paragraph (a) 17.3 before a notice of foreclosure is recorded is entitled to be 17.4 given notice of foreclosure under section 584.203, paragraph 17.5 (a). Recording a request does not affect the title to the real 17.6 property collateral and does not impute knowledge to any person 17.7 of an interest in the real property collateral held or claimed 17.8 by the person requesting notice. A person that records a 17.9 request for notice under this section may subsequently record an 17.10 amendment withdrawing the request or supplementing or correcting 17.11 the person's name, mailing address, or other information in the 17.12 request. An amendment is not effective against a foreclosing 17.13 creditor unless it is recorded before the recording of the 17.14 notice of foreclosure. 17.15 (c) If a foreclosure is completed and a person that 17.16 recorded a proper request under paragraph (a) was not given 17.17 timely notice of foreclosure, the person is entitled to recover 17.18 $500 from the foreclosing creditor. No other remedy may be 17.19 granted or sanction imposed against the foreclosing creditor on 17.20 behalf of the person for failure to give timely notice of 17.21 foreclosure under this section. 17.22 Sec. 6. [584.206] [MEETING TO OBJECT TO FORECLOSURE.] 17.23 (a) A residential debtor may request a meeting to object to 17.24 a foreclosure. The request must be made by a notice received by 17.25 the foreclosing creditor within 30 days after the notice of 17.26 foreclosure is given to the debtor. 17.27 (b) If the foreclosing creditor receives a timely request 17.28 for a meeting, the foreclosing creditor or a responsible 17.29 representative of the foreclosing creditor shall schedule and 17.30 attend a meeting with the residential debtor requesting it at a 17.31 mutually agreeable time. The foreclosure may not be completed 17.32 until the meeting is held or the debtor requesting the meeting 17.33 fails without reasonable cause to appear at the scheduled 17.34 meeting. The representative may be an employee, agent, 17.35 servicer, or attorney of the foreclosing creditor. The meeting 17.36 may be held in person or by telephone, video conferencing, or 18.1 other reasonable means at the election of the foreclosing 18.2 creditor. If the meeting is held in person, it must be held at 18.3 a location reasonably convenient to a parcel of the real 18.4 property collateral unless the debtor and the creditor or 18.5 representative mutually agree on a different location. If the 18.6 foreclosing creditor receives requests from more than one 18.7 residential debtor, the creditor or representative may attempt 18.8 to arrange a consolidated meeting. The debtors requesting 18.9 meetings shall cooperate with the foreclosing creditor's effort 18.10 to do so. 18.11 (c) A meeting held under this section is informal, and the 18.12 rules of evidence do not apply. The parties may be represented 18.13 by legal counsel, and the residential debtor may be advised or 18.14 assisted by another person to the meeting. Documents that 18.15 provide evidence of the grounds for foreclosure must be 18.16 available to the foreclosing creditor or representative and 18.17 provided to the debtor at or before the meeting. The creditor 18.18 or representative shall consider the objections to foreclosure 18.19 stated by the debtor. No later than ten days after the meeting, 18.20 the creditor shall give to each debtor who requested the meeting 18.21 a written statement indicating whether the foreclosure will be 18.22 discontinued or will proceed and the reasons for the 18.23 determination. Neither the objections to foreclosure stated by 18.24 the debtor nor the reasons stated by the creditor or 18.25 representative preclude any person from raising those or other 18.26 grounds for objecting to or supporting foreclosure in any 18.27 judicial proceeding. A statement or representation made by a 18.28 person at the meeting may not be introduced as evidence in any 18.29 judicial proceeding. Each party bears its own expenses in 18.30 connection with the meeting. 18.31 (d) Neither the foreclosing creditor nor its representative 18.32 is subject to liability for making a determination that is 18.33 adverse to a residential debtor who requested a meeting under 18.34 this section. A debtor is not subject to liability for 18.35 requesting or attending a meeting under this section. 18.36 Sec. 7. [584.207] [PERIOD OF LIMITATION FOR FORECLOSURE.] 19.1 The time of foreclosure may not be less than 90 days nor 19.2 more than one year after an original notice of foreclosure is 19.3 recorded under section 584.203 and not less than 30 days after 19.4 any subsequent notice of foreclosure is recorded. The one-year 19.5 period of limitation may be extended by agreement of the 19.6 foreclosing creditor and all persons to which notice of 19.7 foreclosure was required to be given, other than persons having 19.8 interests that have been preserved from foreclosure by a notice 19.9 of preservation under section 584.210. All periods provided in 19.10 this section are tolled for not more than 180 days while a court 19.11 order expressly enjoining or staying the foreclosure is in 19.12 effect and for the period of, and for 45 days after the end of, 19.13 an automatic stay under United States Code, title 11, section 19.14 362. 19.15 Sec. 8. [584.208] [JUDICIAL SUPERVISION OF FORECLOSURE.] 19.16 An aggrieved person may commence a judicial proceeding for 19.17 a violation of this chapter or of other law or principle of 19.18 equity in the conduct of the foreclosure. If the person 19.19 commencing the proceeding is a residential debtor, a bond or 19.20 other security may not be required as a condition for the 19.21 granting of injunctive relief. The court may issue any order 19.22 within the authority of the court in a foreclosure of a mortgage 19.23 by judicial action, including injunction or postponement of the 19.24 foreclosure. 19.25 Sec. 9. [584.209] [REDEMPTION.] 19.26 A person having the right to redeem collateral from a 19.27 security interest may not redeem after the time of foreclosure. 19.28 Unless precluded from doing so by law other than this chapter, 19.29 upon request a foreclosing creditor shall cooperate with a 19.30 person that attempts to redeem the collateral from the security 19.31 interest before the time of foreclosure by promptly providing 19.32 information concerning the amount due or performance required to 19.33 redeem. 19.34 Sec. 10. [584.210] [NOTICE OF PRESERVATION.] 19.35 A foreclosing creditor may give to any interest holder a 19.36 notice stating that the interest of the recipient in the 20.1 collateral will be preserved from and will not be affected by 20.2 the foreclosure. The notice must be given no later than 30 days 20.3 before the time of foreclosure unless a later notice is 20.4 authorized by a specific provision of this chapter. A notice 20.5 complying with this section preserves the interest from 20.6 termination by foreclosure. A foreclosing creditor that gives a 20.7 notice of preservation under this section may not later revoke 20.8 the notice or foreclose against the interest of the person to 20.9 which notice of preservation was given. 20.10 ARTICLE 4 20.11 FORECLOSURE BY AUCTION 20.12 Section 1. [584.301] [FORECLOSURE BY AUCTION.] 20.13 To foreclose by auction under this chapter, the secured 20.14 creditor must comply with the requirements of this article and 20.15 articles 1, 2, and 7. 20.16 Sec. 2. [584.302] [TITLE EVIDENCE; OTHER INFORMATION.] 20.17 (a) If a secured creditor elects to foreclose by auction, 20.18 the foreclosing creditor shall obtain title evidence and make a 20.19 copy available upon request to any person. The title evidence 20.20 must have an effective date no earlier than the time of 20.21 recording of the original notice of foreclosure and must be 20.22 issued no later than 30 days after the time of recording. 20.23 Unless the title evidence is an attorney's opinion, the title 20.24 evidence must state that the issuer is willing to provide a 20.25 policy of title insurance to a person that acquires title to the 20.26 real property by virtue of the foreclosure and the exceptions 20.27 and exclusions from coverage which the policy will contain. 20.28 (b) A foreclosing creditor may make reports and information 20.29 concerning the collateral other than title evidence available to 20.30 prospective bidders at the foreclosure. 20.31 (c) A foreclosing creditor is not subject to liability 20.32 because of error in any information disclosed to prospective 20.33 bidders unless the foreclosing creditor had actual knowledge of 20.34 the error when the information was disclosed. 20.35 Sec. 3. [584.303] [ADVERTISEMENT OF AUCTION.] 20.36 (a) After giving notice of foreclosure, a foreclosing 21.1 creditor shall advertise a foreclosure auction under this 21.2 section by placing an advertisement in a newspaper having 21.3 general circulation in each county where any part of the real 21.4 property collateral is located. The advertisement must be 21.5 published at least once per week for six consecutive weeks, and 21.6 the last publication date must not be less than seven nor more 21.7 than 30 days before the advertised date of auction. 21.8 (b) No later than 21 days before the advertised date of 21.9 auction, the foreclosing creditor shall send a copy of the 21.10 advertisement required by paragraph (a) to the persons to which 21.11 notice of foreclosure was required to be given under section 21.12 584.203. The advertisement may be sent with the notice of 21.13 foreclosure or may be sent separately in the manner prescribed 21.14 for giving notices in article 2. The foreclosing creditor may 21.15 post on the real property collateral a copy of the advertisement 21.16 or a sign containing information about the auction. 21.17 (c) An advertisement required by paragraph (a) must contain: 21.18 (1) the date, time, and location by street address and, if 21.19 applicable, by floor and office number, of the foreclosure 21.20 auction; 21.21 (2) a statement that sale will be made to the highest 21.22 qualified bidder; 21.23 (3) the amount or percentage of the bid that will be 21.24 required of the successful bidder at the completion of the 21.25 auction as a deposit and the form in which the deposit may be 21.26 made if payment other than by cash or certified check will be 21.27 accepted; 21.28 (4) a legally sufficient description of the property, such 21.29 as the property tax identification number, the street address, 21.30 or, if there is no street address, the location of the real 21.31 property to be sold; 21.32 (5) a brief description of any improvements on the real 21.33 property and any personal property collateral to be sold; 21.34 (6) if the foreclosing creditor is an individual, the name, 21.35 street and mailing addresses, and telephone number of the 21.36 foreclosing creditor, or, if the foreclosing creditor is not an 22.1 individual, the name, street and mailing addresses, and 22.2 telephone number of an individual who is a representative of the 22.3 foreclosing creditor, with whom a person may communicate for 22.4 further information concerning the collateral and the 22.5 foreclosure; 22.6 (7) a statement that a copy of the title evidence and any 22.7 applicable reports concerning the collateral or additional 22.8 information are available from the person identified under 22.9 clause (6); and 22.10 (8) a statement as to whether access to the collateral for 22.11 the purpose of inspection before foreclosure is available to 22.12 prospective bidders and, if applicable, how to obtain access. 22.13 (d) An advertisement required by paragraph (a) may contain 22.14 any other information concerning the collateral or the 22.15 foreclosure that the foreclosing creditor elects to include. 22.16 Sec. 4. [584.304] [ACCESS TO COLLATERAL.] 22.17 If a creditor foreclosing by auction has authority to grant 22.18 access to the real property collateral, the creditor shall 22.19 reasonably accommodate a person that contacts the creditor, 22.20 expresses an interest in bidding at the foreclosure auction, and 22.21 requests an opportunity to inspect the collateral. 22.22 Sec. 5. [584.305] [LOCATION AND TIME OF AUCTION.] 22.23 An auction under this section must be conducted: 22.24 (1) at a date and time permitted for an auction under 22.25 judicial foreclosure of a security interest in real property; 22.26 and 22.27 (2) in a county where any part of the real property 22.28 collateral to be auctioned is located. 22.29 Sec. 6. [584.306] [FORECLOSURE OF TWO OR MORE PARCELS.] 22.30 (a) Collateral consisting of two or more parcels of real 22.31 property may be foreclosed by auction separately or in 22.32 combination as provided in the security instrument. If the 22.33 security instrument does not specify the manner of sale of two 22.34 or more parcels, the auction may be conducted: 22.35 (1) by a separate auction of each of the parcels; or 22.36 (2) if at the time notice of foreclosure is recorded two or 23.1 more parcels are contiguous, being used in a unitary manner, 23.2 part of a unitary plan of development, or operated under 23.3 integrated management: 23.4 (i) by combining the parcels in a single auction; or 23.5 (ii) by conditionally offering the parcels at auction both 23.6 in combination and separately and accepting the higher of the 23.7 two aggregate bids. 23.8 (b) If collateral consisting of two or more parcels of real 23.9 property is not made the subject of a single auction, the 23.10 foreclosing creditor shall discontinue sales of parcels or 23.11 combinations of parcels when the total amount of bids received 23.12 is sufficient to pay the secured obligation and the expenses of 23.13 foreclosure. 23.14 Sec. 7. [584.307] [POSTPONEMENT OF AUCTION.] 23.15 (a) An individual conducting an auction under this section 23.16 may postpone the auction for any cause the foreclosing creditor 23.17 considers appropriate. Announcement of the postponement and the 23.18 time and location of the rescheduled auction must be given 23.19 orally at the place and time advertised for commencement of the 23.20 auction. No other advertisement or notice of the postponed time 23.21 and place of auction is required. An auction may be postponed 23.22 more than once, but each postponement may be for not more then 23.23 30 days. 23.24 (b) If an auction cannot be held at the time stated in the 23.25 advertisement of auction because of an automatic stay under 23.26 United States Code, title 11, section 362, or an express stay 23.27 order issued by a court, the foreclosing creditor may reschedule 23.28 the auction. The rescheduled auction must be advertised and a 23.29 copy of the advertisement given to each person entitled to a 23.30 copy as provided in section 584.303. 23.31 Sec. 8. [584.308] [CONDUCT OF AUCTION.] 23.32 (a) An auction under this section must be conducted by a 23.33 person designated by the foreclosing creditor according to this 23.34 section. 23.35 (b) The person conducting the auction, before commencing 23.36 the auction: 24.1 (1) shall make available to prospective purchasers copies 24.2 of the title evidence; 24.3 (2) may make available to prospective purchasers other 24.4 reports and information concerning the collateral; and 24.5 (3) may verify that a person intending to bid has the 24.6 present ability to make the deposit stated in the advertisement 24.7 but may not disclose the amount that a bidder is prepared to 24.8 deposit. 24.9 (c) Any person, including a debtor and the foreclosing 24.10 creditor, may bid at the auction. The individual conducting the 24.11 auction, if authorized, may bid on behalf of the foreclosing 24.12 creditor but may not bid for the individual's own account. The 24.13 foreclosing creditor may bid by credit any amount up to the 24.14 balance owing on the secured obligation, including the expenses 24.15 of the foreclosure. 24.16 (d) A person may submit a fixed bid by a document received 24.17 at least 24 hours before the scheduled time of the auction by 24.18 the person designated in the advertisement of the auction to 24.19 provide information about the property. The bid must be 24.20 accompanied by a deposit satisfying the requirements of section 24.21 548.309. The bid must be read aloud by the person conducting 24.22 the auction before the auction is opened to oral bids. 24.23 (e) The property must be sold to the person who complies 24.24 with this section and sections 548.309 and 548.310 and who bids 24.25 the highest amount. 24.26 (f) The auction is completed by the announcement of the 24.27 person conducting the auction that the property is "sold." 24.28 Sec. 9. [584.309] [DEPOSIT BY SUCCESSFUL BIDDER.] 24.29 Immediately after the auction is completed, the successful 24.30 bidder, if other than the foreclosing creditor or the creditor's 24.31 agent, shall pay a deposit to the person conducting the 24.32 auction. The deposit must be at least ten percent of the amount 24.33 of the bid or the lower amount as the advertisement of auction 24.34 stated would be accepted. The deposit must be in the form of 24.35 cash, certified check, or the other form of payment as was 24.36 stated in the advertisement of auction to be acceptable or is 25.1 acceptable to the person conducting the auction. 25.2 Sec. 10. [584.310] [PAYMENT OF REMAINDER OF BID.] 25.3 (a) The successful bidder at an auction under this section 25.4 shall pay the remainder of the bid to the foreclosing creditor 25.5 within seven days after the date of completion of the auction. 25.6 (b) If payment of the remainder of the bid is timely made, 25.7 the foreclosing creditor shall complete the foreclosure pursuant 25.8 to section 584.602. 25.9 (c) If payment of the remainder of the bid is not timely 25.10 made, the foreclosing creditor shall discontinue the foreclosure 25.11 under section 584.601, and the deposit of the successful bidder 25.12 is forfeited and must be distributed by the foreclosing creditor 25.13 under section 584.604. The defaulting bidder is not subject to 25.14 any other liability on account of the default. 25.15 Sec. 11. [584.311] [FORECLOSURE AMOUNT; DISTRIBUTION OF 25.16 PROCEEDS.] 25.17 If foreclosure by auction under this section is completed 25.18 under section 584.602, the highest amount bid at the auction is 25.19 the foreclosure amount. The foreclosure amount must be applied 25.20 and distributed by the foreclosing creditor under section 25.21 584.604. 25.22 ARTICLE 5 25.23 FORECLOSURE BY NEGOTIATED SALE 25.24 Section 1. [584.401] [FORECLOSURE BY NEGOTIATED SALE.] 25.25 To foreclose by negotiated sale pursuant to this chapter, 25.26 the secured creditor must comply with the requirements of this 25.27 article and articles 1, 2, and 7. 25.28 Sec. 2. [584.402] [ADVERTISEMENT AND CONTRACT OF SALE.] 25.29 (a) A creditor foreclosing by negotiated sale may enter 25.30 into a contract of sale with a prospective purchaser or, if the 25.31 collateral is sold in parcels, with more than one purchaser. 25.32 The contract must state the gross sale price before deduction of 25.33 expenses of sale that the purchaser will pay for the 25.34 collateral. The foreclosing creditor's obligation to sell under 25.35 the contract is subject to the following conditions, which must 25.36 be stated in the contract: 26.1 (1) that no objection to the foreclosure is made under 26.2 section 584.404; and 26.3 (2) that no redemption of the collateral from the security 26.4 interest is made before the time of foreclosure. 26.5 (b) The foreclosing creditor may advertise the collateral 26.6 for sale to prospective purchasers by whatever method the 26.7 foreclosing creditor considers appropriate and may list the 26.8 collateral for sale with a broker. The foreclosing creditor may 26.9 post on the property collateral a sign containing information 26.10 about the sale. 26.11 Sec. 3. [584.403] [NOTICE OF PROPOSED NEGOTIATED SALE; 26.12 FORECLOSURE AMOUNT.] 26.13 (a) If a foreclosing creditor enters into a contract of 26.14 sale as provided in section 584.402, the foreclosing creditor 26.15 shall give notice of the proposed sale at least 30 days before 26.16 the date of the proposed sale to the persons specified in 26.17 section 584.203, paragraph (c). The notice of proposed sale 26.18 must state: 26.19 (1) the date on or after which the foreclosing creditor 26.20 proposes to sell the collateral; 26.21 (2) the gross sale price stated in the contract of sale; 26.22 (3) the amount that the foreclosing creditor offers to 26.23 credit against the secured obligation and distribute to other 26.24 persons entitled thereto; 26.25 (4) the manner in which the amount stated in clause (3) 26.26 will be applied, which must be consistent with section 584.604; 26.27 (5) that if the sale is completed, title to the collateral 26.28 will be transferred to the purchaser under the contract as of 26.29 the time of foreclosure; 26.30 (6) if the foreclosing creditor is an individual, the name, 26.31 street and mailing addresses, and telephone number of the 26.32 foreclosing creditor, or, if the foreclosing creditor is not an 26.33 individual, the name, street and mailing addresses, and 26.34 telephone number of an individual who is a representative of the 26.35 foreclosing creditor, with whom a person may communicate for 26.36 further information concerning the foreclosure or to inspect a 27.1 copy of the contract of sale; and 27.2 (7) that, if a debtor or person holding a lien on the real 27.3 property collateral subordinate in priority to the foreclosing 27.4 creditor's security interest objects to the foreclosure and 27.5 gives the foreclosing creditor a notice so stating, and the 27.6 notice is received by the foreclosing creditor no later than 27.7 seven days before the date of proposed sale, the foreclosing 27.8 creditor will discontinue the foreclosure by negotiated sale, 27.9 give the objecting person a notice of preservation under section 27.10 584.210, or, if the objecting person's interest is a lien, 27.11 discharge the lien. 27.12 (b) The amount stated pursuant to paragraph (a), clause 27.13 (3), is the foreclosure amount. 27.14 (c) The foreclosure amount need not be identical to, but 27.15 must be at least 85 percent of, the gross sale price stated in 27.16 the contract of sale. 27.17 Sec. 4. [584.404] [NOTICE OF OBJECTION TO FORECLOSURE BY 27.18 NEGOTIATED SALE.] 27.19 (a) If, seven or more days before the date of a proposed 27.20 sale under this section, the foreclosing creditor receives 27.21 notice of objection to the foreclosure from a debtor or a person 27.22 that holds a lien on the real property collateral subordinate in 27.23 priority to the foreclosing creditor's security interest, the 27.24 foreclosing creditor shall: 27.25 (1) discontinue the foreclosure under section 584.601, in 27.26 which case the notice of objection has no further effect; 27.27 (2) if the person that made the objection holds a lien on 27.28 the real property collateral and the purchaser under the 27.29 contract of sale consents, give notice under section 584.210, 27.30 before the time of foreclosure, to the person that made the 27.31 objection that the person's lien will be preserved from 27.32 termination by the foreclosure; or 27.33 (3) if the person that made the objection holds a lien on 27.34 the real property collateral that can be discharged by payment 27.35 of a sum of money, tender that sum or other consideration 27.36 acceptable to the person and thereby discharge the lien, in 28.1 which case the notice of objection has no further effect. 28.2 (b) If the foreclosing creditor gives notice pursuant to 28.3 paragraph (a), clause (2): 28.4 (1) the foreclosing creditor and the purchaser may adjust 28.5 the gross sale price, but not the foreclosure amount, by mutual 28.6 agreement to reflect the existence of the preserved lien; 28.7 (2) the foreclosing creditor may disregard the objection of 28.8 the person to which the notice is given; 28.9 (3) the foreclosure by negotiated sale may be completed 28.10 under section 584.602; 28.11 (4) the affidavit recorded under section 584.602 must state 28.12 that the objecting person's lien is not terminated by the 28.13 foreclosure; and 28.14 (5) the person notified is not entitled to any of the 28.15 foreclosure amount by virtue of the preserved lien. 28.16 (c) If the foreclosing creditor pays the consideration or 28.17 makes a tender as provided in paragraph (a), clause (3), and 28.18 keeps the tender in effect, the person to which the tender is 28.19 made must provide the foreclosing creditor with a suitable 28.20 document in recordable form evidencing that the person's 28.21 interest has been discharged. 28.22 (d) After expiration of the time for objection specified in 28.23 paragraph (a), a person given notice of foreclosure under 28.24 section 584.203 and notice of proposed sale under section 28.25 584.403 may assert that the foreclosure amount was inadequate 28.26 only if it was less than 85 percent of the gross sale price 28.27 stated in the contract of sale. 28.28 Sec. 5. [584.405] [COMPLETION OF SALE.] 28.29 Unless the foreclosing creditor discontinues the 28.30 foreclosure by negotiated sale under section 584.404, paragraph 28.31 (a), clause (1), the foreclosing creditor may complete the sale 28.32 as provided in section 584.602 pursuant to the contract of sale. 28.33 ARTICLE 6 28.34 FORECLOSURE BY APPRAISAL 28.35 Section 1. [584.501] [FORECLOSURE BY APPRAISAL.] 28.36 To foreclose by appraisal under this chapter, the secured 29.1 creditor must comply with the requirements of this article and 29.2 articles 1, 2, and 7. 29.3 Sec. 2. [584.502] [APPRAISAL.] 29.4 A creditor foreclosing by appraisal shall obtain a written 29.5 appraisal of the collateral. The debtor and other persons in 29.6 possession of the collateral shall provide reasonable access to 29.7 the collateral to the appraiser. The appraisal report must 29.8 state the appraiser's conclusion as to the fair market value of 29.9 the collateral as of a date not more than 60 days before the 29.10 date of proposed foreclosure stated in the notice of appraisal. 29.11 The appraisal must be made by an independent appraiser who is 29.12 not an employee or affiliate of the foreclosing creditor or its 29.13 servicer and who is a real estate appraiser licensed by the 29.14 commissioner of commerce under chapter 82B. If the real 29.15 property collateral is residential real property, the appraisal 29.16 must conform to the underwriting requirements of institutional 29.17 lenders that regularly lend money secured by first mortgages on 29.18 residential real estate or regularly purchase those mortgages. 29.19 Sec. 3. [584.503] [NOTICE OF APPRAISAL; FORECLOSURE 29.20 AMOUNT.] 29.21 (a) The foreclosing creditor shall give notice of the 29.22 appraisal at least 30 days before the date of proposed 29.23 foreclosure to the persons specified in section 584.203, 29.24 paragraph (c). The notice of appraisal must be accompanied by a 29.25 copy of the appraisal report and must state: 29.26 (1) the date on or after which the foreclosing creditor 29.27 proposes to foreclose the collateral; 29.28 (2) the appraised value of the collateral as stated in the 29.29 appraisal report; 29.30 (3) the amount that the foreclosing creditor offers to 29.31 credit against the secured obligation and distribute to other 29.32 persons entitled thereto; 29.33 (4) the manner in which the stated foreclosure amount will 29.34 be applied, which must be consistent with section 584.604; 29.35 (5) that, if the foreclosure is completed, title to the 29.36 collateral will be transferred to the foreclosing creditor as of 30.1 the time of foreclosure; 30.2 (6) if the foreclosing creditor is an individual, the name, 30.3 street and mailing addresses, and telephone number of the 30.4 foreclosing creditor or, if the foreclosing creditor is not an 30.5 individual, the name, street and mailing addresses, and 30.6 telephone number of an individual who is a representative of the 30.7 foreclosing creditor with whom a person may communicate for 30.8 further information concerning the foreclosure; and 30.9 (7) that, if a debtor or person holding a lien on the 30.10 collateral subordinate in priority to the foreclosing creditor's 30.11 security interest objects to the foreclosure and gives the 30.12 foreclosing creditor a notice so stating and the notice is 30.13 received by the foreclosing creditor no later than seven days 30.14 before the date of proposed foreclosure, the foreclosing 30.15 creditor will discontinue the foreclosure by appraisal, give the 30.16 objecting person a notice of preservation under section 584.210, 30.17 or, if the objecting person's interest is a lien, discharge the 30.18 objecting person's interest. 30.19 (b) The amount stated under paragraph (a), clause (3), is 30.20 the foreclosure amount. 30.21 (c) The foreclosure amount need not be identical to, but 30.22 must be at least 85 percent of, the value of the collateral as 30.23 stated in the appraisal report. 30.24 Sec. 4. [584.504] [NOTICE OF OBJECTION TO FORECLOSURE BY 30.25 APPRAISAL.] 30.26 (a) If, seven or more days before the date of proposed 30.27 foreclosure under this section, a foreclosing creditor receives 30.28 notice of objection to the foreclosure from a debtor or a person 30.29 that holds a lien on the real property collateral subordinate in 30.30 priority to the foreclosing creditor's security interest, the 30.31 foreclosing creditor shall: 30.32 (1) discontinue the foreclosure under section 584.601, in 30.33 which case the notice of objection has no further effect; 30.34 (2) give notice under section 584.210, before the time of 30.35 foreclosure, to the person that made the objection that the 30.36 person's interest in the collateral will be preserved from 31.1 termination by the foreclosure; or 31.2 (3) if the person that made the objection holds a lien on 31.3 the real property collateral that can be discharged by payment 31.4 of a sum of money, tender that sum or other consideration 31.5 acceptable to the person and thereby discharge the lien, in 31.6 which case the notice of objection has no further effect. 31.7 (b) If the foreclosing creditor gives notice under 31.8 paragraph (a), clause (2): 31.9 (1) the foreclosing creditor may disregard the objection of 31.10 the person to which notice is given; 31.11 (2) the foreclosure by appraisal may be completed as 31.12 provided in section 584.602; 31.13 (3) the affidavit recorded under section 584.602 must state 31.14 that the objecting person's interest in the collateral is not 31.15 terminated by the foreclosure; and 31.16 (4) the person notified is not entitled to any of the 31.17 foreclosure amount by reason of the preserved lien. 31.18 (c) If the foreclosing creditor pays the consideration or 31.19 makes a tender as provided in paragraph (a), clause (3), and 31.20 keeps the tender in effect, the person to which the tender is 31.21 made must provide the foreclosing creditor with a suitable 31.22 document in recordable form evidencing that the person's 31.23 interest has been discharged. 31.24 (d) After expiration of the time for objection specified in 31.25 paragraph (a), a person given notice of foreclosure under 31.26 section 584.203 and notice of appraisal under section 584.503 31.27 may assert that the foreclosure amount was inadequate only if it 31.28 was less than 85 percent of the appraised value of the 31.29 collateral as stated in the appraisal report. 31.30 Sec. 5. [584.505] [COMPLETION OF FORECLOSURE.] 31.31 Unless the foreclosing creditor discontinues the 31.32 foreclosure by appraisal under section 584.504, paragraph (a), 31.33 clause (1), the foreclosing creditor may complete the 31.34 foreclosure as provided in section 584.602 on or after the date 31.35 of proposed foreclosure. 31.36 ARTICLE 7 32.1 DISCONTINUANCE AND COMPLETION OF FORECLOSURE; 32.2 RIGHTS AFTER FORECLOSURE 32.3 Section 1. [584.601] [DISCONTINUANCE OF FORECLOSURE.] 32.4 (a) A foreclosing creditor may discontinue foreclosure 32.5 under this chapter at any time before: 32.6 (1) the completion of the auction in the case of a 32.7 foreclosure by auction; or 32.8 (2) the time of foreclosure, in the case of a foreclosure 32.9 by negotiated sale or by appraisal. 32.10 (b) If a foreclosing creditor discontinues foreclosure, the 32.11 creditor shall give notice to the persons to which notice of 32.12 foreclosure was required to be given under section 584.203, 32.13 paragraph (b), advising them that the foreclosure has been 32.14 discontinued and whether the foreclosing creditor will: 32.15 (1) continue to foreclose by another method under this 32.16 chapter pursuant to a notice of foreclosure previously given; 32.17 (2) commence another foreclosure by the same method under a 32.18 new notice of foreclosure; 32.19 (3) commence foreclosure by a different method under this 32.20 chapter pursuant to a new notice of foreclosure; 32.21 (4) commence foreclosure by judicial proceeding; or 32.22 (5) abandon foreclosure. 32.23 (c) If a notice given by a foreclosing creditor under 32.24 paragraph (b), clause (2) or (3), includes all elements required 32.25 for a notice of foreclosure under sections 584.203 and 584.204, 32.26 it constitutes a new notice of foreclosure and no additional 32.27 notice of foreclosure is necessary to pursue a further 32.28 foreclosure under this chapter. 32.29 Sec. 2. [584.602] [COMPLETION OF FORECLOSURE; DEED TO 32.30 SUCCESSFUL BIDDER; AFFIDAVIT; TIME OF FORECLOSURE.] 32.31 (a) To complete a foreclosure by auction under article 4, a 32.32 foreclosure by negotiated sale under article 5, or a foreclosure 32.33 by appraisal under article 6, the foreclosing creditor shall: 32.34 (1) execute, deliver, and record in the office of the 32.35 county recorder a deed without warranty of title, execute and 32.36 deliver a bill of sale or other appropriate document of transfer 33.1 with respect to personal property, if applicable, and execute 33.2 and deliver any other documents that are necessary in order for 33.3 the deed to be recorded, transferring the collateral: 33.4 (i) to or as directed by the successful bidder in the case 33.5 of a foreclosure by auction; 33.6 (ii) to or as directed by the contract purchaser in the 33.7 case of a foreclosure by negotiated sale; or 33.8 (iii) to the foreclosing creditor in its own capacity or to 33.9 its nominee, in the case of a foreclosure by appraisal; 33.10 (2) execute and record in the office of the county recorder 33.11 an affidavit containing: 33.12 (i) the recording data for the security instrument; 33.13 (ii) identification of the foreclosing creditor and the 33.14 debtor; 33.15 (iii) a legally sufficient description of the real property 33.16 collateral; 33.17 (iv) the recording data for the notice of foreclosure; 33.18 (v) identification of the persons to which notice of 33.19 foreclosure was given and the recording data for documents 33.20 reflecting their interests in the collateral; 33.21 (vi) the method of foreclosure employed and, if the 33.22 foreclosure was by negotiated sale or by appraisal, a statement 33.23 that no person entitled to object to the foreclosure made a 33.24 timely objection, or identifying any person that made a timely 33.25 objection and stating whether the person's interest was 33.26 discharged by the secured creditor or was preserved from the 33.27 effect of the foreclosure by the giving of a notice of 33.28 preservation under section 584.210; 33.29 (vii) identification of any additional persons to which 33.30 notices of preservation under section 584.210 were given; 33.31 (viii) a statement that the foreclosing creditor has 33.32 complied with all provisions of this chapter for a valid 33.33 foreclosure; and 33.34 (ix) identification of the person acquiring title to the 33.35 collateral by virtue of the foreclosure. 33.36 (b) The time of recording of the deed is the time of 34.1 foreclosure. 34.2 Sec. 3. [584.603] [TITLE TRANSFERRED BY FORECLOSURE.] 34.3 Compliance with section 584.602, paragraph (a), clause (1), 34.4 transfers, to the persons identified in the deed or document of 34.5 transfer, the title to the collateral held by the person that 34.6 granted the security interest, subject only to: 34.7 (1) interests in the collateral having priority over the 34.8 security interest foreclosed; 34.9 (2) interests of persons entitled to notice of foreclosure 34.10 under section 584.203, paragraph (c), that were not given notice 34.11 of foreclosure; and 34.12 (3) interests that were preserved from foreclosure by 34.13 notice of preservation given under section 584.210. 34.14 Sec. 4. [584.604] [APPLICATION OF PROCEEDS OF 34.15 FORECLOSURE.] 34.16 (a) After receiving proceeds of a sale but before applying 34.17 them, the foreclosing creditor may invest them in a reasonable 34.18 manner. Within seven days after the time of foreclosure or such 34.19 longer time as may be permitted by court order, the foreclosing 34.20 creditor shall apply and distribute the foreclosure amount and 34.21 any investment earnings thereon in the following order: 34.22 (1) in the case of a foreclosure by auction, to pay or 34.23 reimburse the expenses of foreclosure; 34.24 (2) to pay the obligation secured by the foreclosed 34.25 security instrument; 34.26 (3) to pay, in the order of their priority, the amounts 34.27 secured by all liens terminated by the foreclosure; and 34.28 (4) to the person that owned the collateral at the time of 34.29 foreclosure. 34.30 (b) If the foreclosing creditor, in applying the proceeds 34.31 of the sale, acts in good faith and without actual knowledge of 34.32 the invalidity or lack of priority of the claim of a person to 34.33 which distribution is made, the foreclosing creditor is not 34.34 liable for an erroneous distribution. The foreclosing creditor 34.35 may maintain an action in the nature of interpleader for an 34.36 order directing the order of distribution of the proceeds of the 35.1 sale. 35.2 Sec. 5. [584.605] [CONCLUSIVE EFFECT OF FORECLOSURE.] 35.3 Recording of the notice of foreclosure under section 35.4 584.203, paragraph (b), and recording of the documents under 35.5 section 584.602, conclusively establishes compliance with this 35.6 chapter in favor of purchasers of the collateral in good faith 35.7 for value. 35.8 Sec. 6. [584.606] [POSSESSION AFTER FORECLOSURE.] 35.9 If the rights acquired by a person by a foreclosure under 35.10 this chapter include the right of possession, the person may 35.11 gain possession of the real property by an action under sections 35.12 504B.281 to 504B.371 or other appropriate judicial proceeding 35.13 but may not dispossess persons in possession of the real 35.14 property without a judicial order or judgment. 35.15 Sec. 7. [584.607] [ENTITLEMENT TO DEFICIENCY.] 35.16 (a) Except as otherwise provided in paragraph (b), a 35.17 creditor that has completed a foreclosure under this chapter may 35.18 obtain a judgment for a deficiency, as determined by section 35.19 584.608, against a debtor that is liable for the secured debt 35.20 owed to the creditor. 35.21 (b) A debtor is not liable for a deficiency after a 35.22 foreclosure under this chapter if: 35.23 (1) the person seeking the deficiency waived the right to a 35.24 deficiency; or 35.25 (2) the debtor is a residential debtor, unless the debtor 35.26 is found by the court not to have acted in good faith and the 35.27 debtor's conduct caused significant loss or damage to the 35.28 foreclosing creditor or the collateral. 35.29 (c) For purposes of this section, a residential debtor 35.30 acted in good faith if the debtor: 35.31 (1) peaceably vacated the real property collateral and 35.32 relinquished any personal property collateral within 21 days 35.33 after the time of foreclosure and the receipt of a notice 35.34 demanding possession by the person entitled to possession by 35.35 virtue of the foreclosure; 35.36 (2) did not engage in activity, unauthorized by the 36.1 foreclosing creditor, that significantly reduced the value of 36.2 the collateral as of the time possession was relinquished to the 36.3 person entitled to possession by virtue of the foreclosure; 36.4 (3) did not commit fraud against the foreclosing creditor; 36.5 (4) did not permit significant uncured damage to the 36.6 collateral by other persons or natural causes as a consequence 36.7 of the debtor's failure to take reasonable precautions against 36.8 such damage; and 36.9 (5) provided reasonable access to the collateral for 36.10 inspection by the foreclosing creditor and prospective 36.11 purchasers if the debtor had the right of possession of the 36.12 collateral. 36.13 (d) The absence of good faith must be established at a 36.14 judicial hearing by the person seeking a deficiency judgment 36.15 against a residential debtor. A residential debtor who does not 36.16 satisfy the standards of paragraph (c) may have acted in good 36.17 faith. The absence of good faith by one residential debtor does 36.18 not make any other residential debtor liable for a deficiency. 36.19 (e) If liability of a residential debtor for a deficiency 36.20 is barred by paragraph (b), clause (2), liability of a guarantor 36.21 of the residential debtor's obligation also is barred. 36.22 (f) An action to recover a deficiency against a residential 36.23 debtor must be commenced within 90 days after the time of 36.24 foreclosure. 36.25 Sec. 8. [584.608] [DETERMINING AMOUNT OF DEFICIENCY.] 36.26 (a) Subject to paragraphs (b) and (c), the deficiency to 36.27 which a foreclosing creditor is entitled after a foreclosure 36.28 under this chapter is the balance remaining, if any, after 36.29 subtracting the amount paid or applied on behalf of the creditor 36.30 under section 584.604, paragraph (a), clauses (1) and (2), from 36.31 the balance owing on the secured obligation to the creditor, 36.32 including principal, interest, and legally recoverable fees and 36.33 charges. 36.34 (b) In an action by a foreclosing creditor for a deficiency: 36.35 (1) following a foreclosure by negotiated sale or 36.36 appraisal, a residential debtor against which the action is 37.1 filed may offer proof that the foreclosure amount was less than 37.2 90 percent of the fair market value of the collateral as of the 37.3 time of foreclosure; or 37.4 (2) following a foreclosure by auction, a debtor against 37.5 which the action is filed may offer proof that the foreclosure 37.6 amount was less than 90 percent of the fair market value of the 37.7 collateral as of the time of the auction. 37.8 (c) If the court, after a hearing on the proof offered 37.9 under paragraph (b), finds that the foreclosure amount was less 37.10 than 90 percent of the fair market value of the collateral, the 37.11 court shall substitute 90 percent of the fair market value of 37.12 the collateral for the foreclosure amount for the purpose of 37.13 determining the deficiency under paragraph (a). 37.14 ARTICLE 8 37.15 MISCELLANEOUS PROVISIONS 37.16 Section 1. [UNIFORMITY OF APPLICATION AND CONSTRUCTION.] 37.17 In applying and constructing this uniform act, 37.18 consideration must be given to the need to promote uniformity of 37.19 the law with respect to its subject matter among states that 37.20 enact it. 37.21 Sec. 2. [CONFORMING AMENDMENTS; REVISOR'S INSTRUCTION.] 37.22 The revisor, in consultation with the real property section 37.23 of the Minnesota state bar association, shall prepare and submit 37.24 to the legislature a bill recodifying and renumbering sections, 37.25 correcting cross references, repealing obsolete laws, and making 37.26 other technical and conforming amendments to Minnesota Statutes, 37.27 required by the enactment of this act. The revisor shall submit 37.28 this bill by February 1, 2005. 37.29 Sec. 3. [EFFECTIVE DATE.] 37.30 This act is effective August 1, 2005.