HF 3931

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to civil actions; moving mortgage redemption sales to the end of the
current redemption period; eliminating the redemption rights of the mortgagee;
amending Minnesota Statutes 2006, sections 580.03; 580.04; 580.10; 580.12;
580.23, subdivisions 1, 2, 4; 580.28; 581.06; 581.10; 582.032; 582.041,
subdivision 5; 582.042, subdivision 5; 582.05; 582.27, subdivision 1; 582.30,
subdivision 2; 582.32, subdivisions 3, 5; proposing coding for new law in
Minnesota Statutes, chapter 580; repealing Minnesota Statutes 2006, sections
580.25; 580.26; 580.27; Minnesota Statutes 2007 Supplement, section 580.24.

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

Section 1.

new text begin [580.011] DEFINITION.
new text end

new text begin (a) For purposes of this chapter and chapters 581 and 582, the terms defined in this
section have the meanings given.
new text end

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

new text begin (c) "Service of the notice of a foreclosure sale upon the occupants" means the
service of the notice of a foreclosure sale upon the occupants of the property, if the
property is occupied, and if not, the determination that the property is not occupied, all as
established by affidavit.
new text end

Sec. 2.

Minnesota Statutes 2006, section 580.03, is amended to read:

580.03 NOTICE OF SALE; SERVICE ON OCCUPANT.

Six weeks' published notice shall be given new text begin prior to the sale, but beginning no earlier
than 60 days prior to the sale, new text end that such mortgage will be foreclosed by sale of the
mortgaged premises or some part thereof, and at least deleted text begin four weeks deleted text end new text begin six months new text end before
the appointed time of sale a deleted text begin copy of such deleted text end new text begin like new text end 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 2006, 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) deleted text begin the time allowed by law for redemption by the mortgagor, the mortgagor's
personal representatives or assigns; and deleted text end new text begin that the mortgage may be reinstated prior to
the sale by the mortgagor;
new text end

new text begin (7) that there is no postsale redemption right; and
new text end

deleted text begin (7) deleted text end new text begin (8) new text end if the party foreclosing the mortgage desires to preserve the right to
reduce the deleted text begin redemption deleted text end new text begin postnotice reinstatement new 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 PERIOD new 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. 4.

Minnesota Statutes 2006, 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. 5.

Minnesota Statutes 2006, 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 new text begin that was new text end allowed by law for deleted text begin redemption deleted text end new text begin postnotice reinstatement new text end ,
provided that if the deleted text begin redemption deleted text end new text begin postnotice reinstatement new text end period stated in the certificate
is five weeks and a longer deleted text begin redemption deleted text end new text begin postnotice reinstatement new 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 redemption deleted text end new text begin postnotice reinstatement new 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 certificate deleted 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 new text begin that was new text end
allowed for deleted text begin redemption deleted text end new text begin postnotice reinstatement new text end that is less than the time specified by
section 580.23, 582.032, or 582.32, whichever applies.

Sec. 6.

Minnesota Statutes 2006, section 580.23, subdivision 1, is amended to read:

Subdivision 1.

Six-month deleted text begin redemption deleted text end new text begin postnotice reinstatement new text end period.

new text begin (a) new text end When
deleted text begin lands have been sold deleted text end new text begin service of the notice of the foreclosure upon the occupants has
been given new text end in conformity with the preceding sections of this chapter, the mortgagor, the
mortgagor's personal representatives or assigns, deleted text begin within deleted text end new text begin prior to the sale, which must be
no less than new text end six months after deleted text begin such sale deleted text end new text begin that date of service new 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 582.031 deleted text end new text begin reinstate
the mortgage as provided in section 580.30 new text end .

new text begin (b) This subdivision does not limit the right to reinstate under section 580.30 prior to
service of the notice referenced in paragraph (a).
new text end

Sec. 7.

Minnesota Statutes 2006, section 580.23, subdivision 2, is amended to read:

Subd. 2.

12-month deleted text begin redemption deleted text end new text begin postnotice reinstatement new text end period.

new text begin (a)
new text end Notwithstanding the provisions of subdivision 1 deleted text begin hereof deleted text end , when deleted text begin lands have been sold deleted text end new text begin
the foreclosure notice referenced in subdivision 1 has been given new text end in conformity with
the preceding sections of this chapter, the mortgagor deleted 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 sale deleted text end new text begin service of that notice new 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 580.30 new 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 service of the notice.
new text end

Sec. 8.

Minnesota Statutes 2006, section 580.23, subdivision 4, is amended to read:

Subd. 4.

Waiver; 12-month deleted text begin redemption deleted text end new text begin postnotice reinstatement new text end for deleted text begin ag deleted text end new text begin
agricultural new text end 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 redemption deleted text end new text begin postnotice reinstatement new 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 redemption deleted text end new text begin
postnotice reinstatement new text end period in subdivision 1 applies.

Sec. 9.

new text begin [580.241] REDEMPTION LIMITED TO FEDERAL TAX LIEN.
new text end

new text begin If the mortgaged property is subject to a federal tax lien, the United States may
exercise its right to redeem after the foreclosure sale, to the extent required under section
7425(d)(1) of the Internal Revenue Code, for 120 days from the date of sale. The sheriff's
certificate of sale must reference that redemption period.
new text end

Sec. 10.

Minnesota Statutes 2006, section 580.28, is amended to read:

580.28 ACTION TO SET ASIDE MORTGAGE; FORECLOSURE;
deleted text begin REDEMPTION deleted text end new text begin REINSTATEMENT new text end .

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 been deleted text end new text begin is being new text end foreclosed by
advertisement, and the time for deleted text begin redemption from deleted text end new text begin reinstatement prior to new text end the foreclosure
sale will expire before final judgment in such action, the plaintiff or beneficiary having
the right to deleted text begin redeem deleted text end new text begin reinstate new 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 redemption deleted text end new text begin reinstatement new text end expires the
amount deleted text begin for which the mortgaged premises were sold, with interest thereon to the time
of deposit deleted text end new text begin required to reinstate the mortgage new text end , together with a bond to the deleted text begin holder of the
sheriff's certificate of sale deleted text end new text begin mortgagee new text end , in an amount and with sureties to be approved by
the sheriff, conditioned to pay all interest that may accrue or be allowed on such deposit if
the action fail. 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 to 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 thereof deleted text end new text begin reinstatement of the mortgage new text end . Such foreclosure new text begin proceeding new 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 sheriff as directed by such judgment upon delivery to the sheriff
of a certified copy thereof. The remedy herein provided shall be in addition to other
remedies now existing.

Sec. 11.

Minnesota Statutes 2006, 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. new text begin The junior lienor
need not have taken any action in order to receive the amount to which the junior lienor is
entitled under this section. new text end 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. 12.

Minnesota Statutes 2006, section 581.10, is amended to read:

581.10 deleted text begin REDEMPTION deleted text end new text begin REINSTATEMENT new text end BY MORTGAGOR deleted text begin , CREDITOR deleted 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 confirmation deleted text end new text begin
prior to the sale new text end , may deleted text begin redeem the premises sold deleted text end new text begin reinstate the mortgage new 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 percent deleted text end new text begin then
owing on the mortgage new 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. deleted text begin Creditors having a lien may redeem in the order
and manner specified in section 580.24. deleted text end

Sec. 13.

Minnesota Statutes 2006, section 582.032, is amended to read:

582.032 FIVE-WEEK deleted text begin REDEMPTION deleted text end new text begin REINSTATEMENT new 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 foreclosure sale.

Notwithstanding section 580.23 or 581.10, if at
any time before the foreclosure sale 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 redemption deleted text end new text begin
postnotice reinstatement new 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 581 deleted text end new text begin end of the published notice
period new text end , the mortgagor, and the mortgagor's personal representatives or assigns, within five
weeks after the deleted text begin sale deleted text end new text begin published notice period new text end under chapter 580 deleted text begin , deleted text end or deleted text begin within five weeks after
the date of the order confirming the sale under chapter deleted text end 581, may deleted text begin redeem the mortgaged
premises deleted text end new text begin reinstate the mortgage new 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 redemption deleted text end new text begin reinstatement new 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 1 deleted 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 sale deleted text end may initiate a
proceeding in district court to reduce the mortgagor's deleted text begin redemption deleted text end new text begin reinstatement new 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.
deleted text begin If the proceeding is commenced after the foreclosure sale, the holders of junior liens and
interests entitled to notice under subdivision 3 must also be named as defendants. deleted text end 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 redemption deleted text end new text begin postnotice
reinstatement new 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 certificate deleted text end may make a motion to reduce the mortgagor's deleted text begin redemption deleted text end new text begin
reinstatement new 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 redemption deleted text end new text begin reinstatement new 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 redemption deleted text end new text begin
reinstatement new 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 certificate deleted 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 redemption deleted text end new text begin
reinstatement new 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. 14.

Minnesota Statutes 2006, section 582.041, subdivision 5, is amended to read:

Subd. 5.

deleted text begin Redemption deleted text end new text begin Reinstatement new text end .

A party who has a right of deleted text begin redemption deleted text end new text begin
reinstatement new text end may deleted text begin redeem deleted text end new text begin reinstate new text end the designated homestead, the remaining property, or
the entire property including the homestead. The period of deleted text begin redemption deleted text end new text begin reinstatement new text end is the
period for the entire property including the designated homestead.

Sec. 15.

Minnesota Statutes 2006, section 582.042, subdivision 5, is amended to read:

Subd. 5.

deleted text begin Redemption deleted text end new text begin Reinstatement new text end .

The designated tracts may be deleted text begin redeemed deleted text end new text begin
reinstated new text end separately or the entire foreclosed property may be deleted text begin redeemed deleted text end new text begin reinstated new text end . The
period of deleted text begin redemption deleted text end new text begin reinstatement new text end is the period for the entire property including all
of the designated tracts.

Sec. 16.

Minnesota Statutes 2006, 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 redemption deleted text end new text begin
reinstatement new text end , the owner of any such mortgage deleted text begin or the purchaser at the foreclosure sale,
as the case may be, deleted text end 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. 17.

Minnesota Statutes 2006, 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 redemption deleted text end new text begin reinstatement new 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. 18.

Minnesota Statutes 2006, section 582.30, subdivision 2, is amended to read:

Subd. 2.

Not if six-month or five-week deleted text begin redemption deleted text end new text begin reinstatement new 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 redemption deleted text end new text begin postnotice reinstatement new text end period of six months under
section 580.23, subdivision 1, or five weeks under section 582.032.

Sec. 19.

Minnesota Statutes 2006, 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 redemption deleted text end new text begin reinstatement new 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. 20.

Minnesota Statutes 2006, 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 section deleted text end new text begin sale new text end .

(d) The mortgagor's deleted text begin redemption deleted text end new text begin reinstatement new text end period is two months from the deleted text begin date of
sale, except deleted text end new text begin end of the published notice period, and new 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's deleted 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. 21. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2006, sections 580.25; 580.26; and 580.27, new text end new text begin are repealed.
new text end

new text begin Minnesota Statutes 2007 Supplement, section 580.24, new text end new text begin are repealed.
new text end

Sec. 22. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 21 are effective August 1, 2008, and apply to foreclosures commenced
on or after that date.
new text end