Engrossments
Introduction		Posted on 03/21/2006

ARTICLE 2

CONFORMING CHANGES

Section 1.

new text begin [580.011] DEFINITION.
new text end

new text begin "Postnotice reinstatement period" means the period of time between the end of
the required published notice of a foreclosure sale and the date upon which the sale is
scheduled to be held, during which time the mortgage may be reinstated.
new text end

Sec. 2.

Minnesota Statutes 2004, section 580.03, is amended to read:

580.03 NOTICE OF SALE; SERVICE ON OCCUPANT.

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

Sec. 3.

Minnesota Statutes 2004, section 580.032, subdivision 4, is amended to read:

Subd. 4.

Mailed notice.

A person foreclosing a mortgage by advertisement shall
mail, at least 14 days before the deleted text begin date of saledeleted text end new text begin beginning of the postnotice reinstatement
periodnew text end , a copy of the notice of sale to each person requesting notice in a recorded request
for notice at the address specified in the recorded request for notice. Mailed notice
is deemed given upon deposit in the United States mail first class, postage prepaid,
and addressed to the person requesting notice. Notice need not be mailed to a person:
(1) whose request for notice was recorded before the recording of the mortgage being
foreclosed or after the recording of the notice of pendency provided in subdivision 3; (2)
served pursuant to section 580.03; or (3) who no longer has a redeemable interest.

Sec. 4.

Minnesota Statutes 2004, section 580.04, is amended to read:

580.04 REQUISITES OF NOTICE.

Each notice shall specify:

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

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

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

(4) a description of the mortgaged premises, conforming substantially to that
contained in the mortgage;

(5) the time and place of sale;

(6) the time allowed by law for deleted text begin redemption by the mortgagor, the mortgagor's
personal representatives or assignsdeleted text end new text begin the postnotice reinstatement periodnew text end ; and

(7) if the party foreclosing the mortgage desires to preserve the right to reduce
the deleted text begin redemptiondeleted text end new text begin postnotice reinstatementnew text end period under section 582.032 after the
first publication of the notice, the notice must also state in capital letters: "THE
TIME ALLOWED BY LAW FOR deleted text begin REDEMPTION BY THE MORTGAGOR,
THE MORTGAGOR'S PERSONAL REPRESENTATIVES OR ASSIGNS,deleted text end new text begin THE
POSTNOTICE REINSTATEMENT PERIODnew text end MAY BE REDUCED TO FIVE WEEKS IF
A JUDICIAL ORDER IS ENTERED UNDER MINNESOTA STATUTES, SECTION
582.032, DETERMINING, AMONG OTHER THINGS, THAT THE MORTGAGED
PREMISES ARE IMPROVED WITH A RESIDENTIAL DWELLING OF LESS THAN
FIVE UNITS, ARE NOT PROPERTY USED IN AGRICULTURAL PRODUCTION,
AND ARE ABANDONED."

Sec. 5.

Minnesota Statutes 2004, section 580.06, is amended to read:

580.06 SALE, HOW AND BY WHOM MADE.

The sale shall be made by the sheriff or the sheriff's deputy at public vendue to the
highest bidder, in the county in which the premises to be sold, or some part thereof, are
situated, between 9:00 a.m. and the setting of the sun.new text begin The sale must be made no earlier
than the end of the postnotice reinstatement period as defined in section 580.001.
new text end

Sec. 6.

Minnesota Statutes 2004, section 580.10, is amended to read:

580.10 SURPLUS.

In all cases not provided for in section 580.09, if, after sale of any real estate,
made as herein prescribed, there remains in the hands of the officer making the sale any
surplus money, after satisfying the mortgage, with interest, taxes paid, and costs of sale,
the surplus shall be paid over by such officer, on demand, to the new text begin junior lienors, if any, in
order of their priority, and if any surplus remains after satisfying those liens, then to the
new text end mortgagor, the mortgagor's legal representatives or assigns.

Sec. 7.

Minnesota Statutes 2004, section 580.12, is amended to read:

580.12 CERTIFICATE OF SALE; RECORD; EFFECT.

When any sale of real property is made under a power of sale contained in any
mortgage, the officer shall make and deliver to the purchaser a certificate, executed in the
same manner as a conveyance, containing:

(1) a description of the mortgage;

(2) a description of the property sold;

(3) the price paid for each parcel sold;

(4) the time and place of the sale, and the name of the purchaser; and

(5) the time allowed by law for deleted text begin redemptiondeleted text end new text begin postnotice reinstatementnew text end , provided that if
the deleted text begin redemptiondeleted text end new text begin postnotice reinstatementnew text end period stated in the certificate is five weeks and
a longer deleted text begin redemptiondeleted text end new text begin postnotice reinstatementnew text end period was stated in the published notice
of foreclosure sale, a certified copy of the court order entered under section 582.032,
authorizing reduction of the deleted text begin redemptiondeleted text end new text begin postnotice reinstatementnew text end period to five weeks,
must be attached to the certificate.

A certificate deleted text begin which states a five-week redemption period must be recorded within
ten days after the sale; any other certificatedeleted text end must be recorded within 20 days after the
sale. When so recorded, deleted text begin upon expiration of the time for redemption,deleted text end the certificate shall
operate as a conveyance to the purchaser or the purchaser's assignee of all the right, title,
and interest of the mortgagor in and to the premises named therein at the date of such
mortgage, without any other conveyance. A certificate must not contain a time allowed
for deleted text begin redemptiondeleted text end new text begin postnotice reinstatementnew text end that is less than the time specified by section
580.23, 582.032, or 582.32, whichever applies.

Sec. 8.

Minnesota Statutes 2004, section 580.23, subdivision 1, is amended to read:

Subdivision 1.

Six-month deleted text begin redemptiondeleted text end new text begin postnotice reinstatementnew text end period.

new text begin (a)
new text end When deleted text begin lands have been solddeleted text end new text begin the published notice has been givennew text end in conformity with the
preceding sections of this chapter, the mortgagor, the mortgagor's personal representatives
or assigns, within six months after deleted text begin such saledeleted text end new text begin that period of published noticenew text end , except as
otherwise provided in subdivision 2 or section 582.032 or 582.32, may deleted text begin redeem such lands,
as hereinafter provided, by paying the sum of money for which the same were sold, with
interest from the time of sale at the rate provided to be paid on the mortgage debt and, if
no rate be provided in the mortgage note, at the rate of six percent per annum, together
with any further sums which may be payable as provided in sections 582.03 and 582.031deleted text end new text begin
reinstate the mortgage as provided in section 580.30new text end .

new text begin (b) This subdivision does not limit the right to reinstate under section 580.30 prior to
completion of publication.
new text end

Sec. 9.

Minnesota Statutes 2004, section 580.23, subdivision 2, is amended to read:

Subd. 2.

12-month deleted text begin redemptiondeleted text end new text begin postnotice reinstatementnew text end period.

new text begin (a)
new text end Notwithstanding the provisions of subdivision 1 deleted text begin hereofdeleted text end , when deleted text begin lands have been solddeleted text end new text begin the
published foreclosure notice has been givennew text end in conformity with the preceding sections
of this chapter, the mortgagordeleted text begin ,deleted text end new text begin or new text end the mortgagor's personal representatives or assigns,
within 12 months after deleted text begin such saledeleted text end new text begin the period of published noticenew text end , may deleted text begin redeem such lands in
accordance with the provisions of payment of subdivision 1 thereof,deleted text end new text begin reinstate the mortgage
as provided in section 580.30new text end if:

(1) the mortgage was executed prior to July 1, 1967;

(2) the amount claimed to be due and owing as of the date of the notice of foreclosure
sale is less than 66-2/3 percent of the original principal amount secured by the mortgage;

(3) the mortgage was executed prior to July 1, 1987, and the mortgaged premises, as
of the date of the execution of the mortgage, exceeded ten acres in size;

(4) the mortgage was executed prior to August 1, 1994, and the mortgaged premises,
as of the date of the execution of the mortgage, exceeded ten acres but did not exceed 40
acres in size and was in agricultural use as defined in section 40A.02, subdivision 3;

(5) the mortgaged premises, as of the date of the execution of the mortgage,
exceeded 40 acres in size; or

(6) the mortgage was executed on or after August 1, 1994, and the mortgaged
premises, as of the date of the execution of the mortgage, exceeded ten acres but did
not exceed 40 acres in size and was in agricultural use. For purposes of this clause, "in
agricultural use" means that at least a portion of the mortgaged premises was classified
for ad valorem tax purposes as:

(i) class 2a agricultural homestead property under section 273.13, subdivision 23;

(ii) class 2b rural or agricultural nonhomestead property under section 273.13,
subdivision 23;

(iii) class 1b agricultural homestead property under section 273.13, subdivision
22; or

(iv) exempt wetlands under section 272.02, subdivision 11.

new text begin (b) This subdivision does not limit the right to reinstate prior to completion of
publication.
new text end

Sec. 10.

Minnesota Statutes 2005 Supplement, section 580.23, subdivision 4, is
amended to read:

Subd. 4.

Waiver; 12-month deleted text begin redemptiondeleted text end new text begin postnotice reinstatementnew text end for ag use.

A mortgagor, before or at the time of granting a mortgage executed on or after August
1, 1994, may waive in writing the mortgagor's right under subdivision 2, clause (6), to
have a 12-month deleted text begin redemptiondeleted text end new text begin postnotice reinstatementnew text end period based upon the premises
being in agricultural use as of the date of execution of the mortgage. The written waiver
must be either a document separate from the mortgage or a separately executed and
acknowledged addendum to the mortgage on a separate page. If the written waiver is a
separate document, it must be in recordable form and must either recite the recorded
document number of the mortgage or recite the names of the mortgagor and mortgagee,
the legal description of the mortgaged property, and the date of the mortgage. If the
written waiver is a separate document, it must be recorded in the office of the county
recorder or registrar of titles no later than ten days after the recording of the mortgage.
Where there is a waiver of the rights under subdivision 2, clause (6), the deleted text begin redemptiondeleted text end new text begin
postnotice reinstatementnew text end period in subdivision 1 applies.

Sec. 11.

Minnesota Statutes 2005 Supplement, section 580.24, is amended to read:

580.24 REDEMPTION BY CREDITOR.

(a) deleted text begin If no redemption is made by the mortgagor, the mortgagor's personal
representatives or assignsdeleted text end new text begin After the foreclosure salenew text end , the most senior creditor having
a legal or equitable lien upon the mortgaged premises, or some part of it, subsequent to
the foreclosed mortgage, may redeem within deleted text begin sevendeleted text end new text begin 37new text end days after the deleted text begin expiration of the
redemption period determined under section 580.23 or 582.032, whichever is applicabledeleted text end new text begin
salenew text end ; and each subsequent creditor having a lien may redeem, in the order of priority of
their respective liens, within seven days after the time allowed the prior lienholder by
paying the amount required under this section. However, no creditor is entitled to redeem
unless, deleted text begin within the period allowed for redemption by the mortgagordeleted text end new text begin no later than 30 days
after the salenew text end , the creditor:

(1) records with each county recorder and registrar of titles where the foreclosed
mortgage is recorded a notice of the creditor's intention to redeem;

(2) records in each office where the notice is recorded all documents necessary to
create the lien on the mortgaged premises and to evidence the creditor's ownership of the
lien; and

(3) after complying with clauses (1) and (2), delivers to the sheriff who conducted
the foreclosure sale or the sheriff's successor in office a copy of each of the documents
required to be recorded under clauses (1) and (2), with the office, date and time of filing
for record stated on the first page of each document.

The sheriff shall maintain for public inspection all documents delivered to the sheriff
and shall note the date of delivery on each document. The sheriff may charge a fee of $100
for the documents delivered to the sheriff relating to each lien. The sheriff shall maintain
copies of documents delivered to the sheriff for a period of six months after the end of the
mortgagor's deleted text begin redemptiondeleted text end new text begin reinstatementnew text end period.

(b) Saturdays, Sundays, legal holidays, and the first day following the expiration
of the prior redemption period must be included in computing the seven-day redemption
period. When the last day of the period falls on Saturday, Sunday, or a legal holiday,
that day must be omitted from the computation. All mechanic's lienholders who have
coordinate liens shall have one combined seven-day period to redeem.

(c) The amount required to redeem from the holder of the sheriff's certificate of sale
is the amount required under section 580.23. The amount required to redeem from a
person holding a certificate of redemption is:

(1) the amount paid to redeem as shown on the certificate of redemption; plus

(2) interest on that amount to the date of redemption; plus

(3) the amount claimed due on the person's lien, as shown on the affidavit under
section 580.25, clause (3).

The amount required to redeem may be paid to the holder of the sheriff's certificate
of sale or the certificate of redemption, as the case may be, or to the sheriff for the holder.

Sec. 12.

Minnesota Statutes 2004, section 580.25, is amended to read:

580.25 REDEMPTION, HOW MADE.

Redemption shall be made as provided in this section.

The person desiring to redeem shall pay the amount required by law for the
redemption, and shall produce to the person or officer receiving the redemption payment:

(1) a copy of the docket of the judgment, or of the deed or mortgage, or of the
record or files evidencing any other lien under which the person claims a right to redeem,
certified by the officer with custody of the docket, record, or files, or the original deed
or mortgage with the certificate of record endorsed on it;

(2) a copy of any assignment necessary to evidence the person's ownership of
the lien, certified by the officer with custody of the assignment, or the original of each
instrument of assignment with the certificate of record endorsed on it. If the redemption is
under an assignment of a judgment, the assignment shall be filed in the court entering the
judgment, as provided by law, and the person so redeeming shall produce a certified copy
of it and of the record of its filing, and the copy of the docket shall show that the proper
entry was made upon the docket. No further evidence of the assignment of the judgment
is required unless the mortgaged premises or part of it is registered property, in which
case the judgment and all assignments of the judgment must be entered as a memorial
upon the certificate of title to the mortgaged premises and the original judgment and
each assignment with the certificate of record endorsed on it, or a copy certified by the
registrar of titles, must be produced; and

(3) an affidavit of the person or the person's agent, showing the amount then actually
claimed due on the person's lien and required to be paid on the lien in order to redeem
from the person.

If redemption is made to the sheriff, the sheriff may charge a fee of $250 for issuing
the certificate of redemption and any related service. No other fee may be charged by the
sheriff for a redemption.

Within 24 hours after a redemption is made, the person redeeming shall cause the
documents so required to be produced to be filed with the county recorder, or registrar of
titles, who may receive fees as prescribed in section 357.18 or 508.82. If the redemption
is made at any place other than the county seat, it is sufficient forthwith to deposit the
documents in the nearest post office, addressed to the recorder or registrar of titles, with
the postage prepaid. A person recording documents produced for redemption shall, on
the same day, deliver copies of the documents to the sheriff for public inspection. The
sheriff may receive a fee of $20 for the documents delivered following a redemption. The
sheriff shall note the date of delivery on the documents and shall maintain for public
inspection all documents delivered to the sheriff for a period of six months after the deleted text begin end of
the mortgagor's redemption perioddeleted text end new text begin salenew text end .

Sec. 13.

Minnesota Statutes 2004, section 580.26, is amended to read:

580.26 CERTIFICATE OF REDEMPTION; RECORD.

The person or officer from whom such redemption is made shall make and deliver to
the person redeeming a certificate executed and acknowledged in the same manner as a
conveyance, containing:

(1) the name of the person redeeming, and the amount paid by the person on such
redemption;

(2) a description of the sale for which such redemption is made, and of the property
redeemed;

(3) a statement of the claim upon which such redemption is made and, if upon a lien,
the amount claimed to be due thereon at the date of redemption.

If redemption is made deleted text begin by the owner of the property sold, the owner's heirs, personal
representatives, or assigns, such certificate shall be recorded within four days after the
expiration of the year allowed the owner for redemption and, if made by a creditor holding
a liendeleted text end , the certificate shall be recorded within four days after such redemption. Unless so
recorded, the certificate shall be void as against any person in good faith redeeming from
the same person or lien.

Sec. 14.

Minnesota Statutes 2004, section 580.27, is amended to read:

580.27 EFFECT OF REDEMPTION.

If redemption is made deleted text begin by the owner of the property sold, the owner's heirs, personal
representatives or assigns, such redemption annuls the sale; ifdeleted text end by a creditor holding
a lien on the property, or some part thereof, the certificate of redemption, executed,
acknowledged, and recorded as provided in section 580.26, operates as an assignment to
the creditor of the right acquired under such sale, subject to such right of any other person
to redeem as provided by law.

Sec. 15.

Minnesota Statutes 2004, section 580.28, is amended to read:

580.28 ACTION TO SET ASIDE MORTGAGE; FORECLOSURE;
REDEMPTION.

When an action is brought wherein it is claimed that any mortgage as to the plaintiff
or person for whose benefit the action is brought is fraudulent or void, or has been paid
or discharged, in whole or in part, if such mortgage deleted text begin has beendeleted text end new text begin is beingnew text end foreclosed by
advertisement, and the time for deleted text begin redemption fromdeleted text end new text begin reinstatement prior tonew text end the foreclosure
sale will expire before final judgment in such action, the plaintiff or beneficiary having the
right to deleted text begin redeemdeleted text end new text begin reinstatenew text end , for the purpose of saving such right in case the action fails, may
deposit with the sheriff before the time of deleted text begin redemptiondeleted text end new text begin reinstatementnew text end expires the amount
deleted text begin for which the mortgaged premises were sold, with interest thereon to the time of depositdeleted text end new text begin
required to reinstate the mortgagenew text end , together with a bond to the deleted text begin holder of the sheriff's
certificate of saledeleted text end new text begin mortgageenew text end , in an amount and with sureties to be approved by the deleted text begin sheriffdeleted text end new text begin
mortgageenew text end , conditioned to pay all interest that may accrue or be allowed on such deposit
if the action fail. deleted text begin The person shall, in writing, notify such sheriff that the person claims
the mortgage to be fraudulent or void, or to have been paid or discharged, in whole or
in part, as the case may be, and that such action is pending, and direct the sheriff todeleted text end new text begin The
mortgagee shallnew text end retain such money and bond until final judgment. In case such action fails,
such deposit shall operate as a deleted text begin redemption of the premises from such foreclosure sale, and
entitle the plaintiff to a certificate thereofdeleted text end new text begin written acknowledgment from the reinstatement
of the mortgagenew text end . Such foreclosurenew text begin proceedingnew text end , deposit, bond, and notice shall be brought
to the attention of the court by supplemental complaint in the action, and the judgment shall
determine the validity of the new text begin pending new text end foreclosure sale, and the rights of the parties to the
moneys and bond so deposited, which shall be paid and delivered by the deleted text begin sheriffdeleted text end new text begin mortgageenew text end
as directed by such judgment upon delivery to the deleted text begin sheriffdeleted text end new text begin mortgageenew text end of a certified copy
thereof. The remedy herein provided shall be in addition to other remedies now existing.

Sec. 16.

Minnesota Statutes 2004, section 581.06, is amended to read:

581.06 SURPLUS.

When the sale is for cash, if, after satisfying the mortgage debt, with costs and
expenses, there is a surplus, it shall be brought into court for the benefit of the new text begin junior
lienors, if any, in order of priority; with any remaining amount for the benefit of the
new text end mortgagor or the person entitled thereto, subject to the order of the court. If such surplus
remains in court for three months without being applied for, the judge may direct it to be
put out at interest, subject to the order of the court, for the benefit of the persons entitled
thereto, to be paid to them upon order of the court.

Sec. 17.

Minnesota Statutes 2004, section 581.10, is amended to read:

581.10 deleted text begin REDEMPTIONdeleted text end new text begin REINSTATEMENTnew text end BY MORTGAGORdeleted text begin ,deleted text end new text begin ;
REDEMPTION BYnew text end CREDITOR.

new text begin (a) new text end The mortgagor, or those claiming under the mortgagor, within the time specified
in section 580.23 or 582.032, whichever applies, deleted text begin after the date of the order of confirmationdeleted text end new text begin
prior to the salenew text end , may deleted text begin redeem the premises solddeleted text end new text begin reinstate the mortgagenew text end , or any separate
portion thereof, by paying the amount deleted text begin bid therefor, with interest thereon from the time
of sale at the rate provided to be paid on the mortgage debt, not to exceed eight percent
per annum, and, if no rate to be provided in the mortgage, at the rate of six percentdeleted text end new text begin then
owing on the mortgagenew text end , together with any further sum which may be payable pursuant
to deleted text begin section deleted text end new text begin sections new text end 582.03 and 582.031.

new text begin (b) new text end Creditors having a lien may redeem in the order and manner specified in section
580.24.

Sec. 18.

Minnesota Statutes 2004, section 582.032, is amended to read:

582.032 FIVE-WEEK deleted text begin REDEMPTIONdeleted text end new text begin REINSTATEMENTnew text end PERIOD;
CERTAIN ABANDONED PROPERTIES.

Subdivision 1.

Application.

This section applies to mortgages executed after
December 31, 1989, under which there has been a default in the payment of money
existing for at least 60 days as of the date of the filing of the complaint or motion provided
for in this section. This section applies only when the mortgaged premises are:

(1) ten acres or less in size;

(2) improved with a residential dwelling consisting of less than five units which is
neither a model home nor a dwelling under construction; and

(3) not property used in agricultural production.

This section applies to foreclosures by action under chapter 581 and to foreclosures
by advertisement under chapter 580.

Subd. 2.

Before deleted text begin foreclosure saledeleted text end new text begin end of the published notice periodnew text end .

Notwithstanding section 580.23 or 581.10, if at any time before the deleted text begin foreclosure saledeleted text end new text begin end of
the published notice periodnew text end but not more than 30 days before the first publication of the
notice of sale, a court order is entered reducing the mortgagor's deleted text begin redemptiondeleted text end new text begin postnotice
reinstatementnew text end period to five weeks under subdivision 7, after the deleted text begin mortgaged premises
have been sold as provided in chapter 580 or 581deleted text end new text begin end of the published notice periodnew text end , the
mortgagor, and the mortgagor's personal representatives or assigns, within five weeks
after the deleted text begin saledeleted text end new text begin published notice periodnew text end under chapter 580deleted text begin ,deleted text end or deleted text begin within five weeks after the
date of the order confirming the sale underdeleted text end deleted text begin chapterdeleted text end 581, may deleted text begin redeem the mortgaged
premisesdeleted text end new text begin reinstate the mortgagenew text end as provided in section 580.23, subdivision 1, or 581.10,
as applicable. If an order is obtained after the first publication of the notice of sale, the
five-week deleted text begin redemptiondeleted text end new text begin reinstatementnew text end period applies only if the notice of sale contained the
statement required by section 580.04, clause (7).

deleted text begin Subd. 3. deleted text end

deleted text begin After foreclosure sale. deleted text end

deleted text begin Notwithstanding section or , if at
any time after the foreclosure sale, a court order is entered reducing the mortgagor's
redemption period under subdivision 7, the period during which the mortgagor, the
mortgagor's personal representatives and assigns, may redeem the mortgaged premises
in accordance with the provisions of section deleted text begin 580.23, subdivision 1deleted text end , or section , as
applicable, is reduced so as to expire five weeks from the date the order is entered. Within
ten days after the order is entered, a certified copy of the order must be filed with the
office of the county recorder or registrar of titles for the county in which the mortgaged
premises are located, and a copy of the order must be posted in a conspicuous place
on the mortgaged premises. Within ten days of the order's entry, a copy of the order
must be sent by certified mail to any party holding a lien or interest of record junior to
the foreclosed mortgage who has filed with the county recorder or registrar of titles a
certificate identifying the lienholder and the lien claimed, stating the lienholder's address
and the legal description of the property covered by the lien, and requesting notice of any
postforeclosure sale reduction of the mortgagor's redemption period for any superior lien.
Affidavits of posting and mailing to evidence the same are prima facie evidence of the
facts stated therein and are entitled to recordation along with the certified copy of the order.
deleted text end

Subd. 4.

Summons and complaint.

In a foreclosure by advertisement, the party
foreclosing a mortgage deleted text begin or holding the sheriff's certificate of saledeleted text end may initiate a proceeding
in district court to reduce the mortgagor's deleted text begin redemptiondeleted text end new text begin reinstatementnew text end period under this
section. The proceeding must be initiated by the filing of a complaint, naming the
mortgagor, or the mortgagor's personal representatives or assigns of record, as defendant,
in district court for the county in which the mortgaged premises are located. If the
proceeding is commenced after the deleted text begin foreclosure saledeleted text end new text begin end of the period of published noticenew text end ,
the holders of junior liens and interests entitled to notice under subdivision 3 must also
be named as defendants. The complaint must identify the mortgaged premises by legal
description and must identify the mortgage by the names of the mortgagor and mortgagee,
and any assignee of the mortgagee; the date of its making; and pertinent recording
information. The complaint must allege that the mortgaged premises are:

(1) ten acres or less in size;

(2) improved with a residential dwelling consisting of less than five units, which is
not a model home or a dwelling under construction;

(3) not property used in agricultural production; and

(4) abandoned.

The complaint must request an order reducing the mortgagor's deleted text begin redemptiondeleted text end new text begin
postnotice reinstatementnew text end period to five weeks. When the complaint has been filed, the
court shall issue a summons commanding the person or persons named in the complaint to
appear before the court on a day and at a place stated in the summons. The appearance
date shall be not less than l5 nor more than 25 days from the date of the issuing of the
summons. A copy of the filed complaint must be attached to the summons.

Subd. 5.

Order to show cause.

In a foreclosure by action, the plaintiff deleted text begin or the holder
of the sheriff's certificatedeleted text end may make a motion to reduce the mortgagor's deleted text begin redemptiondeleted text end new text begin
reinstatementnew text end period under this section. The motion must conform generally to the
pleading requirements provided in subdivision 4. For purposes of the motion, the court has
continuing jurisdiction over the parties and the mortgaged premises through the expiration
of the deleted text begin redemptiondeleted text end new text begin reinstatementnew text end period. When the motion has been filed, the court shall
issue an order to show cause commanding the parties it considers appropriate to appear
before the court on a day and at a place stated in the order. The appearance date may not
be less than 15 nor more than 25 days after the date of the order to show cause. A copy of
the motion must be attached to the order to show cause.

Subd. 6.

Service.

The summons or order to show cause may be served by any
person not named a party to the action. The summons or order to show cause must be
served at least seven days before the appearance date, in the manner provided for service
of a summons in a civil action in the district court. If the defendant cannot be found in
the county, the summons or order to show cause may be served by sending a copy by
certified mail to the defendant's last known address, if any, at least ten days before the
appearance date. The summons or order to show cause must be posted in a conspicuous
place on the mortgaged premises not less than seven days before the appearance date. If
personal or certified mail service cannot be made on a defendant, then the plaintiff or
plaintiff's attorney may file an affidavit to that effect with the court and service by posting
the summons or order to show cause on the mortgaged premises is sufficient as to that
defendant.

Subd. 7.

Hearing; evidence; order.

At the hearing on the summons and complaint
or order to show cause, the court shall enter an order reducing the mortgagor's deleted text begin redemptiondeleted text end new text begin
reinstatementnew text end period as provided in subdivision 2 or 3, as applicable, if evidence is
presented supporting the allegations in the complaint or motion and no appearance is
made to oppose the relief sought. An affidavit by the sheriff or a deputy sheriff of the
county in which the mortgaged premises are located, or of a building inspector, zoning
administrator, housing official, or other municipal or county official having jurisdiction
over the mortgaged premises, stating that the mortgaged premises are not actually
occupied and further setting forth any of the following supporting facts, is prima facie
evidence of abandonment:

(1) windows or entrances to the premises are boarded up or closed off, or multiple
window panes are broken and unrepaired;

(2) doors to the premises are smashed through, broken off, unhinged, or continuously
unlocked;

(3) gas, electric, or water service to the premises has been terminated;

(4) rubbish, trash, or debris has accumulated on the mortgaged premises;

(5) the police or sheriff's office has received at least two reports of trespassers on the
premises, or of vandalism or other illegal acts being committed on the premises; or

(6) the premises are deteriorating and are either below or are in imminent danger of
falling below minimum community standards for public safety and sanitation.

An affidavit of the party foreclosing the mortgage deleted text begin or holding the sheriff's certificatedeleted text end ,
or one of their agents or contractors, stating any of the above supporting facts, and that
the affiant has changed locks on the mortgaged premises under section 582.031 and that
for a period of ten days no party having a legal possessory right has requested entrance
to the premises, is also prima facie evidence of abandonment. Either affidavit described
above, or an affidavit from any other person having knowledge, may state facts supporting
any other allegations in the complaint or motion and is prima facie evidence of the
same. Written statements of the mortgagor, the mortgagor's personal representatives or
assigns, including documents of conveyance, which indicate a clear intent to abandon the
premises, are conclusive evidence of abandonment. In the absence of affidavits or written
statements, or if rebuttal evidence is offered by the defendant or a party lawfully claiming
through the defendant, the court may consider any competent evidence, including oral
testimony, concerning any allegation in the complaint or motion. An order entered under
this section must contain a legal description of the mortgaged premises.

Subd. 8.

Recording.

A certified copy of an order reducing a mortgagor's deleted text begin redemptiondeleted text end new text begin
reinstatementnew text end period entered under this section may be recorded in the office of the county
recorder or registrar of titles for the county in which the mortgaged premises are located.

Sec. 19.

Minnesota Statutes 2004, section 582.041, subdivision 5, is amended to read:

Subd. 5.

deleted text begin Redemptiondeleted text end new text begin Reinstatementnew text end .

A party who has a right of deleted text begin redemptiondeleted text end new text begin
reinstatementnew text end may deleted text begin redeemdeleted text end new text begin reinstatenew text end the designated homestead, the remaining property, or
the entire property including the homestead. The period of deleted text begin redemptiondeleted text end new text begin reinstatementnew text end is the
period for the entire property including the designated homestead.

Sec. 20.

Minnesota Statutes 2004, section 582.042, subdivision 5, is amended to read:

Subd. 5.

deleted text begin Redemptiondeleted text end new text begin Reinstatementnew text end .

The designated tracts may be deleted text begin redeemeddeleted text end new text begin
reinstatednew text end separately or the entire foreclosed property may be deleted text begin redeemeddeleted text end new text begin reinstatednew text end . The
period of deleted text begin redemptiondeleted text end new text begin reinstatementnew text end is the period for the entire property including all
of the designated tracts.

Sec. 21.

Minnesota Statutes 2004, section 582.05, is amended to read:

582.05 RECEIVER OF RENTS WITH POSSESSION.

On the commencement of proceedings to foreclose, either by action or advertisement,
any mortgage on a leasehold estate of more than three years covering urban property, or
at any time after such commencement until the expiration of the period of deleted text begin redemptiondeleted text end new text begin
reinstatementnew text end , the owner of any such mortgage or the purchaser at the foreclosure sale,
as the case may be, may apply to the district court for the appointment of a receiver to
take immediate possession of the mortgaged premises and to hold, maintain, and operate
the same and collect the rents and income therefrom, and apply the same in the manner
hereinafter specified. The application for such receiver may be included in an action to
foreclose the mortgage or may be by separate action and, if by separate action, the only
necessary party defendant shall be the owner of the mortgaged leasehold at the time of
the commencement of the action.

Sec. 22.

Minnesota Statutes 2004, section 582.27, subdivision 1, is amended to read:

Subdivision 1.

Section 582.25.

Upon expiration of the periods specified in this
section, the provisions of section 582.25 apply to a mortgage foreclosure sale subject
to this section:

(A) as to all of the provisions of section 582.25, except clause (2), one year after
the last day of the deleted text begin redemptiondeleted text end new text begin reinstatementnew text end period of the mortgagor, the mortgagor's
personal representatives or assigns;

(B) as to clause (2), ten years after the date of the foreclosure sale.

Sec. 23.

Minnesota Statutes 2004, section 582.30, subdivision 2, is amended to read:

Subd. 2.

Not if six-month or five-week deleted text begin redemptiondeleted text end new text begin reinstatementnew text end period.

A
deficiency judgment is not allowed if a mortgage is foreclosed by advertisement under
chapter 580, and has a deleted text begin redemptiondeleted text end new text begin postnotice reinstatementnew text end period of six months under
section 580.23, subdivision 1, or five weeks under section 582.032.

Sec. 24.

Minnesota Statutes 2004, section 582.32, subdivision 3, is amended to read:

Subd. 3.

Procedure.

(a) Voluntary foreclosure may occur only in accordance with
this section.

(b) The mortgagor and mortgagee shall enter into a written agreement for voluntary
foreclosure under this section only during the existence of a default under the mortgage.
At least one of the items constituting the default must have been in existence for at least
one month on the date of agreement. The agreement shall identify the mortgage by
recording data and the real estate by legal description, specify the date of the agreement
and provide that:

(1) The mortgagor and mortgagee have agreed that the mortgage shall be voluntarily
foreclosed with the mortgagor's deleted text begin redemptiondeleted text end new text begin reinstatementnew text end period reduced to two months
as provided in this section.

(2) The mortgagee waives any rights to a deficiency or other claim for personal
liability against the mortgagor arising from the mortgage or the debt secured by the
mortgage. This does not preclude an agreement between the mortgagor and mortgagee
to a payment to the mortgagee as part of the voluntary foreclosure, or collection from a
guarantor.

(3) The mortgagor waives its right to surplus sale proceeds, to contest foreclosure,
and to rents and occupancy during the period from the date of agreement through the
redemption period.

(4) The mortgagor consents to the appointment of a receiver for, or grants mortgagee
possession of, the real estate and all rights of possession of the real estate, including, but
not limited to operating, maintaining, and protecting the real estate, and the making of any
additions or betterments to the real estate.

(5) A default exists under the mortgage and on the date of agreement at least one of
the items constituting the default has been in existence for at least one month.

(c) Within seven days after the date of agreement, the mortgagee must record or
file the agreement with the county recorder or registrar of titles, as appropriate, in each
county where any part of the real estate is located. Filing or recording of a short form
agreement signed by the mortgagor and mortgagee containing the following information
satisfies this requirement:

(1) the identity and mailing address of the mortgagor and mortgagee;

(2) the legal description of the real estate;

(3) the mortgage identified by recording data;

(4) a statement that an event of default under the mortgage has existed for at least
one month as of the date of agreement and foreclosure under this section has been agreed
to by the parties; and

(5) the date of agreement.

(d) A certificate signed by the county or city assessor where the real estate is located,
stating that, as of the date of agreement, the real estate was not in agricultural use as
defined in section 40A.02, subdivision 3, and was not a homestead for property tax
purposes under section 273.124, must be recorded before or with the certificate of sale in
the office of the county recorder or registrar of titles where the real estate is located, and
shall be prima facie evidence of the facts contained in the certificate.

(e) Within ten days of receipt of a written request for information from a holder
of a junior lien, the mortgagee, without charge, shall deliver or mail by first class mail
postage prepaid, to the address of the holder set forth in the request, either the agreement
or a written statement of the amount of money and the value or a detailed description
of any property paid or transferred, or to be paid or transferred, by the parties to the
agreement under the terms of the agreement. Failure to provide this information does not
invalidate the foreclosure.

Sec. 25.

Minnesota Statutes 2004, section 582.32, subdivision 5, is amended to read:

Subd. 5.

Foreclosure procedure; notice to creditors.

(a) After the date of
agreement, the mortgagee may proceed to foreclose the mortgage in accordance with the
laws generally applicable to foreclosure by advertisement including this chapter and
chapter 580, except as otherwise provided in this section.

(b) At least 14 days before the date of sale, the mortgagee shall:

(1) serve the persons in possession of the real estate with notice of the voluntary
foreclosure sale under this section in the same manner as in a foreclosure by advertisement
as provided in section 580.03; and

(2) mail notice of the voluntary foreclosure sale under this section to each holder of
a junior lien who has filed or recorded a request for notice under section 580.032.

(c) The mortgagee shall publish notice of the voluntary foreclosure sale under this
section in the same manner as in a foreclosure by advertisement as provided in section
580.03 for four consecutive weeks. The notice must include all information required under
section 580.04, clauses (1) to (6), the date of agreement, and shall state that each holder of
a junior lien may redeem in the order and manner provided in subdivision 9, beginning
after the deleted text begin expiration of the mortgagor's redemption period under this sectiondeleted text end new text begin salenew text end .

(d) The mortgagor's deleted text begin redemptiondeleted text end new text begin reinstatementnew text end period is two months from the deleted text begin date of
sale, exceptdeleted text end new text begin end of the published notice period, andnew text end that if the real estate is subject to a
federal tax lien under which the United States is entitled to a 120-day redemption period
under section 7425(d)(1) of the Internal Revenue Code, as amended, the deleted text begin mortgagor'sdeleted text end new text begin
United States'new text end redemption period is 120 days from the date of sale. The certificate of sale
must indicate the redemption period applicable under this paragraph.

Sec. 26.

Minnesota Statutes 2004, section 582.32, subdivision 9, is amended to read:

Subd. 9.

Creditor redemption.

A person holding a junior lien upon the real estate
or some part of the real estate may redeem in the order and manner specified in sections
580.24 and 580.25, but only if deleted text begin before the end of the mortgagor's redemption period under
this sectiondeleted text end new text begin no later than 30 days after the sale,new text end the creditor files with the county recorder
or registrar of titles of each county where the real estate is located, a notice of intention to
redeem. If a junior creditor fails to timely file a notice of intention to redeem as provided
in this subdivision, or fails to redeem, its lien on the real estate is extinguished.

HF 3824

Bill Text Versions

Current Version - as introduced

ARTICLE 1

GENERAL PRINCIPLES OF POST-2006 MORTGAGE FORECLOSURES

Section 1.

new text begin [582.001] POST-2006 FORECLOSURE PROCEEDINGS. new text end

new text begin EFFECTIVE DATE. new text end

ARTICLE 2

CONFORMING CHANGES

Section 1.

new text begin [580.011] DEFINITION. new text end

Sec. 2.

580.03 NOTICE OF SALE; SERVICE ON OCCUPANT.

Sec. 3.

Subd. 4.

Mailed notice.

Sec. 4.

580.04 REQUISITES OF NOTICE.

Sec. 5.

580.06 SALE, HOW AND BY WHOM MADE.

Sec. 6.

580.10 SURPLUS.

Sec. 7.

580.12 CERTIFICATE OF SALE; RECORD; EFFECT.

Sec. 8.

Subdivision 1.

Six-month deleted text begin redemptiondeleted text end new text begin postnotice reinstatementnew text end period.

Sec. 9.

Subd. 2.

12-month deleted text begin redemptiondeleted text end new text begin postnotice reinstatementnew text end period.

Sec. 10.

Subd. 4.

Waiver; 12-month deleted text begin redemptiondeleted text end new text begin postnotice reinstatementnew text end for ag use.

Sec. 11.

580.24 REDEMPTION BY CREDITOR.

Sec. 12.

580.25 REDEMPTION, HOW MADE.

Sec. 13.

580.26 CERTIFICATE OF REDEMPTION; RECORD.

Sec. 14.

580.27 EFFECT OF REDEMPTION.

Sec. 15.

580.28 ACTION TO SET ASIDE MORTGAGE; FORECLOSURE; REDEMPTION.

Sec. 16.

581.06 SURPLUS.

Sec. 17.

581.10 deleted text begin REDEMPTIONdeleted text end new text begin REINSTATEMENTnew text end BY MORTGAGORdeleted text begin ,deleted text end new text begin ; REDEMPTION BYnew text end CREDITOR.

Sec. 18.

582.032 FIVE-WEEK deleted text begin REDEMPTIONdeleted text end new text begin REINSTATEMENTnew text end PERIOD; CERTAIN ABANDONED PROPERTIES.

Subdivision 1.

Application.

Subd. 2.

Before deleted text begin foreclosure saledeleted text end new text begin end of the published notice periodnew text end .

deleted text begin Subd. 3. deleted text end

deleted text begin After foreclosure sale. deleted text end

Subd. 4.

Summons and complaint.

Subd. 5.

Order to show cause.

Subd. 6.

Service.

Subd. 7.

Hearing; evidence; order.

Subd. 8.

Recording.

Sec. 19.

Subd. 5.

deleted text begin Redemptiondeleted text end new text begin Reinstatementnew text end .

Sec. 20.

Subd. 5.

deleted text begin Redemptiondeleted text end new text begin Reinstatementnew text end .

Sec. 21.

582.05 RECEIVER OF RENTS WITH POSSESSION.

Sec. 22.

Subdivision 1.

Section 582.25.

Sec. 23.

Subd. 2.

Not if six-month or five-week deleted text begin redemptiondeleted text end new text begin reinstatementnew text end period.

new text begin [582.001] POST-2006 FORECLOSURE PROCEEDINGS.
new text end

new text begin [580.011] DEFINITION.
new text end

580.28 ACTION TO SET ASIDE MORTGAGE; FORECLOSURE;
REDEMPTION.

581.10 deleted text begin REDEMPTIONdeleted text end new text begin REINSTATEMENTnew text end BY MORTGAGORdeleted text begin ,deleted text end new text begin ;
REDEMPTION BYnew text end CREDITOR.

582.032 FIVE-WEEK deleted text begin REDEMPTIONdeleted text end new text begin REINSTATEMENTnew text end PERIOD;
CERTAIN ABANDONED PROPERTIES.