SF 2430

3rd Engrossment - 86th Legislature (2009 - 2010) Posted on 05/08/2010 09:34am

A bill for an act
relating to mortgages; regulating reverse mortgages; requiring certain notices
related to redemption rights be made to a mortgagor; providing for a private
right of action; modifying time for requesting a hearing on an order to secure
a building; modifying notice of sale requirements; authorizing political
subdivisions to recover costs associated with obtaining a five-week redemption
period; amending Minnesota Statutes 2008, sections 47.58, subdivisions 3, 8, by
adding subdivisions; 580.03; 580.041, as amended; 580.06; 580.30, subdivision
1; 582.03, subdivision 1; 582.032, by adding a subdivision; Minnesota Statutes
2009 Supplement, sections 47.58, subdivision 1; 463.251, subdivision 3;
proposing coding for new law in Minnesota Statutes, chapter 58.

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

Section 1.

Minnesota Statutes 2009 Supplement, section 47.58, subdivision 1, is
amended to read:

Subdivision 1.

Definitions.

For the purposes of this section, the terms defined in this
subdivision have the meanings given them.

(a) "Reverse mortgage loan" means a loan:

(1) Made to a borrower wherein the committed principal amount is paid to the
borrower in equal or unequal installments over a period of months or years, interest is
assessed, and authorized closing costs are incurred as specified in the loan agreement;

(2) Which is secured by a mortgage on residential property owned solely by the
borrower; and

(3) Which is due deleted text begin when the committed principal amount has been fully paid to the
borrower, or upon sale of the property securing the loan, or deleted text end upon the death of the last
surviving borrower, or upon the borrower terminating use of the property as principal
residence so as to disqualify the property from the homestead credit given in chapter 290A.

(b) "Lender" means any bank subject to chapter 48, credit union subject to chapter
52, savings bank organized and operated pursuant to chapter 50, savings association
subject to chapter 51A, any residential mortgage originator subject to chapter 58, or any
insurance company as defined in section 60A.02, subdivision 4. "Lender" also includes
any federally chartered bank supervised by the comptroller of the currency or federally
chartered savings association supervised by the Federal Home Loan Bank Board or
federally chartered credit union supervised by the National Credit Union Administration,
to the extent permitted by federal law.

(c) "Borrower" includes any natural person holding an interest in severalty or as joint
tenant or tenant-in-common in the property securing a reverse mortgage loan.

(d) "Outstanding loan balance" means the current net amount of money owed by the
borrower to the lender whether or not that sum is suspended pursuant to the terms of the
reverse mortgage loan agreement or is immediately due and payable. The outstanding
loan balance is calculated by adding the current totals of the items described in clauses (1)
to (5) and subtracting the current totals of the item described in clause (6):

(1) The sum of all payments made by the lender which are necessary to clear the
property securing the loan of any outstanding mortgage encumbrance or mechanics or
material supplier's lien.

(2) The total disbursements made by the lender to date pursuant to the loan
agreement as formulated in accordance with subdivision 3.

(3) All taxes, assessments, insurance premiums and other similar charges paid to
date by the lender pursuant to subdivision 6, which charges were not reimbursed by the
borrower within 60 days.

(4) All actual closing costs which the borrower has deferred, if a deferral provision
is contained in the loan agreement as authorized by subdivision 7.

(5) The total accrued interest to date, as authorized by subdivision 5.

(6) All payments made by the borrower pursuant to subdivision 4.

(e) "Actual closing costs" mean reasonable charges or sums ordinarily paid at the
time of closing for the following, whether or not retained by the lender:

(1) Any insurance premiums on policies covering the mortgaged property including
but not limited to premiums for title insurance, fire and extended coverage insurance, flood
insurance, and private mortgage insurance.

(2) Abstracting, title examination and search, and examination of public records
related to the mortgaged property.

(3) The preparation and recording of any or all documents required by law or custom
for closing a reverse mortgage loan agreement.

(4) Appraisal and survey of real property securing a reverse mortgage loan.

(5) A single service charge, which service charge shall include any consideration,
not otherwise specified in this section as an "actual closing cost," paid by the borrower to
the lender for or in relation to the acquisition, making, refinancing or modification of a
reverse mortgage loan, and shall also include any consideration received by the lender
for making a commitment for a reverse mortgage loan, whether or not an actual loan
follows the commitment. The service charge shall not exceed one percent of the bona fide
committed principal amount of the reverse mortgage loan.

(6) Charges and fees necessary for or related to the transfer of real property securing
a reverse mortgage loan or the closing of a reverse mortgage loan agreement paid by the
borrower and received by any party other than the lender.

Sec. 2.

Minnesota Statutes 2008, section 47.58, subdivision 3, is amended to read:

Subd. 3.

Payment; repayment; amount.

The committed principal amount of a
reverse mortgage loan shall be paid to the borrower over the period of months or years
as specified in the loan agreement. The borrower and lender may, by written agreement,
amend the loan agreement from time to time. Pursuant to the terms of the contract the
borrower shall make repayment to the lender deleted text begin :
deleted text end

deleted text begin (a) deleted text end upon deleted text begin payment to the borrower of the final installment unless, by written
agreement between the borrower and lender whereunder the borrower agrees to
periodically pay the lender interest accruing on the outstanding loan balance, repayment of
the outstanding loan balance is postponed until default in payment of interest or until deleted text end the
occurrence of any of the events specified in clauses deleted text begin (b) deleted text end new text begin (1) new text end to deleted text begin (e) deleted text end new text begin (4) new text end ;

deleted text begin (b) deleted text end new text begin (1) new text end upon sale of the property securing the loan;

deleted text begin (c) deleted text end new text begin (2) new text end upon the death of the last surviving borrower;

deleted text begin (d) deleted text end new text begin (3) new text end upon the borrower terminating use of the property as principal residence so as
to disqualify the property from homestead classification under section 273.13; or

deleted text begin (e) deleted text end new text begin (4) new text end upon renegotiation of the terms of the reverse mortgage loan agreement,
unless the parties agree in writing to postpone repayment.

Except as otherwise provided in this subdivision, the outstanding loan balance as
projected by the lender to the anticipated time of payment to the borrower of the final
installment of committed principal shall not exceed 80 percent of the appraised value of
the property at inception of the loan. If upon reappraisal of the property made at any time
during the term of the loan, the projected outstanding loan balance does not exceed 70
percent of the reappraised value of the property, the schedule of the lender's installment
payments may be extended and the amount of the committed principal amount increased,
provided the revised outstanding loan balance at payment of the lender's final installment
of committed principal does not exceed 80 percent of the reappraised value of the property.

Sec. 3.

Minnesota Statutes 2008, section 47.58, subdivision 8, is amended to read:

Subd. 8.

Counseling; requirement; penalty.

deleted text begin A lender, mortgage banking company,
or other mortgage lender not related to the mortgagor must keep a certificate on file
documenting that the borrower, prior to entering into the reverse mortgage loan, received
counseling as defined in this subdivision from an organization that meets the requirements
of section 462A.209 and is a deleted text end new text begin Prior to accepting a final and complete application for a
reverse mortgage loan or assessing any fees, a lender must:
new text end

new text begin (1) refer the prospective borrower to an independent new text end housing counseling agency
deleted text begin approved by the Department of Housing and Urban Development. The certificate must deleted text end new text begin for
reverse mortgage counseling. The lender shall provide the prospective borrower with a
list of at least three independent housing counseling agencies. The lender shall positively
promote the benefits of reverse mortgage counseling to the potential borrower; and
new text end

new text begin (2) receive a certification from the applicant or the applicant's authorized
representative that the applicant has received counseling as defined in this subdivision
from an independent housing counseling agency. The certification must new text end be signed by the
deleted text begin mortgagor deleted text end new text begin applicant new text end and the counselor new text begin from the independent agency new text end and new text begin must new text end include the
date of the counseling, new text begin and new text end the name, address, and telephone number of both the deleted text begin mortgagor
and the organization providing counseling. deleted text end new text begin counselor from the independent agency and
the applicant. The lender shall maintain the certification in an accurate, reproducible, and
accessible format for the term of the reverse mortgage. new text end A failure by the lender to comply
with this subdivision results in a $1,000 civil penalty payable to the deleted text begin mortgagor deleted text end new text begin borrower new text end .

For the purposes of this subdivision deleted text begin , deleted text end new text begin :
new text end

new text begin (i) "independent counseling agency" means an agency approved by the United States
Department of Housing and Urban Development, domiciled in Minnesota, to provide loan
counseling that has no business relationship with the lender and, except for an authorized
foreclosure prevention counseling agency, as defined in section 580.021, subdivision 2,
neither makes loans nor refers borrowers to any person or entity that makes loans; and
new text end

new text begin (ii) new text end "counseling" means new text begin that during a session, which must be no less than 60 minutes,
new text end the following services are provided to the borrower:

deleted text begin (1) deleted text end new text begin (A) new text end a review of the advantages and disadvantages of new text begin a new text end reverse mortgage
deleted text begin programs deleted text end new text begin loan new text end ;

deleted text begin (2) an explanation of how the reverse mortgage affects the borrower's estate and
public benefits;
deleted text end

deleted text begin (3) an explanation of the lending process;
deleted text end

deleted text begin (4) a discussion of the borrower's supplemental income needs; and
deleted text end

deleted text begin (5) an opportunity to ask questions of the counselor.
deleted text end

new text begin (B) a discussion of the borrower's finances, assets, liabilities, expenses, and income
needs and a review of options other than a reverse mortgage loan that are available to the
borrower, including other housing, social services, health, and financial options;
new text end

new text begin (C) a review of other home equity conversion or other loan options that are or may
become available to the borrower;
new text end

new text begin (D) an explanation of the financial implication of entering into a reverse mortgage
loan, including the costs of the loan;
new text end

new text begin (E) an explanation that a reverse mortgage loan may have tax consequences, affect
eligibility for assistance under federal and state programs, and have an impact on the
estate and heirs of the borrower;
new text end

new text begin (F) an explanation of the lending process;
new text end

new text begin (G) an opportunity for the borrower to ask questions of the counselor;
new text end

new text begin (H) an explanation that:
new text end

new text begin (aa) the lender may not condition a reverse mortgage loan on the purchase of an
annuity, investment, life insurance, or long-term care insurance product; and
new text end

new text begin (bb) a reverse mortgage loan cannot obligate the borrower to purchase an annuity,
investment, life insurance, or long-term care insurance product; and
new text end

new text begin (I) notification to the borrower that, following the receipt of a written commitment
to make a reverse mortgage loan and prior to the expiration of the seven-day cooling off
period provided under subdivision 10, the borrower may seek additional information and
an analysis of the commitment from the counselor.
new text end

Sec. 4.

Minnesota Statutes 2008, section 47.58, is amended by adding a subdivision to
read:

new text begin Subd. 9. new text end

new text begin Lender default; forfeiture. new text end

new text begin A lender who fails to make loan advances
as required in the loan documents, and fails to cure an actual default after notice as
specified in the loan documents, shall forfeit any right to repayment of the outstanding
loan balance with respect to a mortgage that is not federally insured. Any mortgage that is
not federally insured securing a reverse mortgage loan agreement in which a forfeiture
has occurred pursuant to this subdivision may be declared null and void by a court of
competent jurisdiction.
new text end

Sec. 5.

Minnesota Statutes 2008, section 47.58, is amended by adding a subdivision to
read:

new text begin Subd. 10. new text end

new text begin Seven-day cooling off period; right of rescission. new text end

new text begin (a) A borrower shall
not be bound for seven days after the borrower's acceptance, in writing, of the lender's
written commitment to make the reverse mortgage loan, and cannot be required to close
or proceed with the loan during that time period. The lender shall provide the borrower
with written notice of the seven-day cooling off period, which must be on a separate
sheet of paper and in at least ten-point type. A borrower may not waive the provisions of
this paragraph.
new text end

new text begin (b) The borrower may rescind any reverse mortgage loan within three days of
execution, as provided in Code of Federal Regulations, Regulation Z.
new text end

Sec. 6.

Minnesota Statutes 2008, section 47.58, is amended by adding a subdivision to
read:

new text begin Subd. 11. new text end

new text begin Sales of insurance products in connection with reverse mortgage loan
transactions. new text end

new text begin No lender, mortgage broker, or residential mortgage originator may:
new text end

new text begin (1) require the purchase of an annuity, investment, life insurance, or long-term care
insurance product as a condition of obtaining a reverse mortgage loan;
new text end

new text begin (2) enter into any agreement to make a reverse mortgage loan that obligates the
borrower to purchase an annuity, investment, life insurance, or long-term care insurance
product; or
new text end

new text begin (3) receive compensation for providing the borrower with information relating to an
annuity, investment, life insurance, or long-term care insurance product.
new text end

new text begin For the purposes of this subdivision, "mortgage broker" has the meaning given in
section 58.02, subdivision 13, and "residential mortgage originator" has the meaning given
in section 58.02, subdivision 19.
new text end

Sec. 7.

new text begin [58.19] REVERSE MORTGAGE LOANS COORDINATION WITH
CHAPTER 47.
new text end

new text begin No person acting as a residential mortgage originator or servicer, including a person
required to be licensed under this chapter, and no person exempt from the licensing
requirements of this chapter under section 58.04, shall make, provide, or arrange for a
reverse mortgage as defined in chapter 47 without complying with that chapter.
new text end

Sec. 8.

Minnesota Statutes 2009 Supplement, section 463.251, subdivision 3, is
amended to read:

Subd. 3.

Securing building by city; lien.

If the owner of the building or a holder of
the sheriff's certificate of sale fails to either comply or provide to the governing body a
reasonable plan and schedule to comply with an order issued under subdivision 2 or to
request a hearing on the order within deleted text begin 14 deleted text end new text begin six new text end days after the order is served, the governing
body shall cause the building to be properly secured and the cost of securing the building
may be charged against the real estate as provided in section 463.21. In the metropolitan
area, as defined in section 473.121, subdivision 2, the governing body may work with
neighborhood associations to develop and implement plans to secure vacant buildings in
a timely and cost-effective fashion. The city may use rehabilitation and revitalization
funds in implementing this section.

Sec. 9.

Minnesota Statutes 2008, section 580.03, is amended to read:

580.03 NOTICE OF SALE; SERVICE ON OCCUPANT.

Six weeks' published notice shall be given that such mortgage will be foreclosed by
sale of the mortgaged premises or some part thereof, and at least four weeks before the
appointed time of sale 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 deleted text begin notice deleted text end new text begin notices
new text end required by sections 580.041 and 580.042 must be served simultaneously with the notice
of foreclosure required by this section.

Sec. 10.

Minnesota Statutes 2008, section 580.041, as amended by Laws 2009, chapter
123, section 7, and Laws 2009, chapter 130, section 7, is amended to read:

580.041 FORECLOSURE ADVICE new text begin AND REDEMPTION RIGHTS new text end NOTICE
TO OWNERS.

Subd. 1a.

Applicability.

This section applies to foreclosure of mortgages by
advertisement under this chapter and foreclosure of mortgages by action under chapter
581 on property consisting of one to four family dwelling units, one of which the owner
occupies as the owner's principal place of residency when the notice of pendency under
section 580.032 or the lis pendens for a foreclosure under chapter 581 is recorded.

Subd. 1b.

Form and delivery of new text begin foreclosure advice new text end notice.

The new text begin foreclosure advice
new text end notice required by this section must be in 14-point boldface type and must be printed on
colored paper that is other than the color of the notice of foreclosure new text begin required by sections
580.03 and 580.04 and the notice of redemption rights required by this section, new text end and that
does not obscure or overshadow the content of the notice. The title of the notice must
be in 20-point boldface type. The notice must be on its own page. The new text begin foreclosure
advice new text end notice required by this section must be delivered with the notice of foreclosure
required by sections 580.03 and 580.04. The new text begin foreclosure advice new text end notice required by this
section also must be delivered with each subsequent written communication regarding the
foreclosure mailed to the mortgagor by the foreclosing party up to the day of redemption.
A foreclosing mortgagee will be deemed to have complied with this section if it sends
the new text begin foreclosure advice new text end notice required by this section at least once every 60 days during
the period of the foreclosure process. The new text begin foreclosure advice new text end notice required by this
section must not be published.

new text begin Subd. 1c. new text end

new text begin Form and delivery of notice of redemption rights. new text end

new text begin The notice of
redemption rights required by this section must be in 14-point boldface type and must be
printed on colored paper that is other than the color of the notice of foreclosure required
by sections 580.03 and 580.04 and the foreclosure advice notice required by this section,
and that does not obscure or overshadow the content of the notice. The title of the notice
must be in 20-point boldface type. The notice must be on its own page. The notice of
redemption rights must be delivered with the notice of foreclosure required by sections
580.03 and 580.04. The notice of redemption rights required by this section must not
be published.
new text end

Subd. 2.

Content of new text begin foreclosure advice new text end notice.

The new text begin foreclosure advice new text end notice
required by this section must appear substantially as follows:

"Help For Homeowners in Foreclosure

	The attorney preparing this foreclosure is: _
		(Attorney name, address, phone)
	It is being prepared for:
	_
	(Lender name, loss mitigation phone number)

AS OF [insert date], this lender says that you owe $[insert dollar amount] to bring
your mortgage up to date new text begin (or "reinstate" your mortgage) new text end . You must pay this amount new text begin ,
plus interest and other costs, new text end to keep your house from going through a sheriff's sale.
The sheriff's sale is scheduled for [insert date] at [insert time] at [insert place].

Mortgage foreclosure is a complex process. People may contact you with advice and
offers to help "save" your home.

Remember: It is important that you learn as much as you can about foreclosure and
your situation. Find out about all your options before you make any agreements with
anyone about the foreclosure of your home.

Getting Help

As soon as possible, you should contact your lender at the above number to talk
about things you might be able to do to prevent foreclosure. You should also
consider contacting the foreclosure prevention counselor in your area. A foreclosure
prevention counselor can answer your questions, offer free advice, and help you
create a plan which makes sense for your situation.

Contact the Minnesota Home Ownership Center at 651-659-9336
or 866-462-6466 or www.hocmn.org new text begin or contact the United States
Department of Housing and Urban Development at 1-800-569-4287 or
www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search=MN#searchArea new text end
to get the phone number and location of the nearest new text begin certified new text end counseling organization.
Call today. The longer you wait, the fewer options you may have for a desirable
result.

deleted text begin Information About the Foreclosure Process
deleted text end

deleted text begin You do not need to move at the time of the sheriff's sale. After the sheriff's sale you
have the right to "redeem." Redeem means that you pay off the entire loan amount
plus fees to keep your house. You can keep living in your home for a period of time.
This is called a "redemption period." The redemption period is [insert number of
months] months after the sheriff's sale. This redemption period is your chance to
try and sell your home or refinance it with a different loan. You can also pay the
redemption amount with any other funds you have available. At the end of the
redemption period you will have to leave your home. If you do not, the person or
company that bid on your home at the sheriff's sale has the right to file an eviction
against you in district court. deleted text end "

new text begin Subd. 2a. new text end

new text begin Content of notice of redemption rights. new text end

new text begin The notice of redemption rights
required by this section must appear substantially as follows:
new text end

new text begin "What Happens After the Foreclosure Sale
new text end

new text begin After the sheriff's sale, you have the right to "redeem." Redeem means that you pay the
amount bid for your house at the sheriff's sale, plus interest and costs, to keep your house.
You can keep living in your home for a period of time after the foreclosure sale. This is
called a "redemption period." The redemption period is [insert number of months] months
after the sheriff's sale.
new text end

new text begin At the end of the redemption period, if you do not redeem or sell, you will have to
leave your home. If you do not leave, the person or company that bid on your home at the
sheriff's sale has the right to file an eviction against you in court.
new text end

new text begin Be Careful of Foreclosure Scams
new text end

new text begin Be careful! After the foreclosure sale, people may approach you to buy your house
or ask you to transfer your house to them for little or no money.
new text end

new text begin Before you give up the rights to your house or sign any documents (including a
deed), be sure you know how much the house sold for at the sheriff's sale and decide if
you can save the house by paying the amount of the bid, plus interest and costs.
new text end

new text begin How to Find Out How Much Your House Sold For at the Foreclosure Sale
new text end

new text begin The amount you need to pay to redeem your house may be less than the amount you
owed on the mortgage before the sale. You can learn what this amount is (and who the
winning bidder at the sale was) by attending the sheriff's sale or by contacting the sheriff's
office after the sale.
new text end

new text begin You Can Also Sell Your House
new text end

new text begin During the redemption period, if you sell your home, you must sell it for enough
to pay off the winning bidder from the sheriff's sale and pay interest, fees, and other
claims against the property. If there is any money left from the sale of the house after all
these debts are paid, you can keep the money. You can also enter into a "short sale." A
short sale is an agreement in which the lender agrees to accept less than the full amount
you owe on the mortgage.
new text end

new text begin Get More Information and Advice
new text end

new text begin For more information and advice, contact an attorney or a mortgage
foreclosure prevention counselor. You can find a mortgage foreclosure
prevention counselor by contacting the Minnesota Home Ownership Center
at 651-659-9336 or 866-462-6466 or www.hocmn.org or contact the United
States Department of Housing and Urban Development at 1-800-569-4287 or
www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search=MN#searchArea to get
the phone number and location of the nearest certified counseling organization."
new text end

Subd. 3.

Affidavit.

Any person may establish compliance with or inapplicability of
this section by recording, with the county recorder or registrar of titles, an affidavit by
a person having knowledge of the facts, stating that the notice required by this section
has been delivered in compliance with this section or that this section is not applicable
because the property described in the notice of foreclosure did not consist of one to four
family dwelling units, one of which was occupied by the owner as the owner's principal
place of residency. The affidavit and a certified copy of a recorded affidavit shall be prima
facie evidence of the facts stated in the affidavit. The affidavit may be recorded regarding
any foreclosure sale, including foreclosure sales which occurred prior to August 1, 2005,
and may be recorded separately or as part of the record of a foreclosure.

Subd. 4.

Validation of foreclosure sales.

No mortgage foreclosure sale under this
chapter shall be invalid because of failure to comply with this section unless an action
to invalidate the sale is commenced and a notice of lis pendens is filed with the county
recorder or registrar of titles within one year after the last day of the redemption period of
the mortgagor, the mortgagor's personal representatives, or assigns. This subdivision shall
not affect any action or proceeding pending on August 1, 2005, or which is commenced
before February 1, 2006, in any court of this state, provided a notice of lis pendens of the
action is filed with the county recorder or registrar of titles before February 1, 2006.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2010, and applies to
notices delivered on or after that date.
new text end

Sec. 11.

Minnesota Statutes 2008, section 580.06, is amended to read:

580.06 SALE, HOW AND BY WHOM MADE new text begin ; NOTICE TO MORTGAGOR new text end .

new text begin Subdivision 1. new text end

new text begin Requirements for sale. new text end

The sale shall be made by the sheriff or the
sheriff's deputy at public venue 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 4:00 p.m.

new text begin Subd. 2. new text end

new text begin Notice of results of sale required; contents. new text end

new text begin (a) Except as provided in
paragraph (c), a person attempting to acquire fee title to the mortgagor's property directly
from the mortgagor following the sheriff's sale and prior to the end of the redemption
period must provide to the mortgagor, by personal delivery three days prior to entering into
an agreement with the mortgagor to acquire title, notice of the results of the foreclosure
as provided under paragraph (b).
new text end

new text begin (b) The notice required under paragraph (a) must contain the following information:
new text end

new text begin (1) the date the sale occurred;
new text end

new text begin (2) the identity of the purchaser and any assignees of the purchaser;
new text end

new text begin (3) the sheriff's sale price; and
new text end

new text begin (4) the following statement: "There are very important things you need to know now
that your house has been auctioned at the sheriff's sale:
new text end

new text begin new text begin (i) you have (insert the number of months) to "redeem," which means to pay
the winning bidder the sale price listed above (plus interest and costs) and keep
your house;
new text end new text end

new text begin (ii) whether you can pay off the amount or not, YOU DO NOT HAVE TO MOVE
RIGHT AWAY. YOU CAN KEEP LIVING IN YOUR HOME until the end of this
redemption period;
new text end

new text begin (iii) read all notices and documents related to the foreclosure of your home
carefully!! THE AMOUNT YOU NEED TO PAY THE WINNING BIDDER TO
REDEEM YOUR HOUSE (THE SHERIFF'S SALE PRICE LISTED ABOVE, PLUS
INTEREST AND COSTS) MAY BE LESS THAN THE AMOUNT YOU OWED ON
YOUR MORTGAGE BEFORE THE SHERIFF'S SALE; and
new text end

new text begin (iv) you can also try to sell your home during this "redemption period." You must sell
it for enough to pay off the winning bidder from the sheriff's sale and pay interest, fees, and
other claims against the property. You can also enter into a "short sale." A short sale is an
agreement in which the lender accepts less than the full amount you owe on the mortgage.
new text end

new text begin If there is any money left from the sale of the house after all these debts are paid,
you can keep the money.
new text end

new text begin For more information and advice, contact an attorney or a mortgage
foreclosure prevention counselor. You can find a mortgage foreclosure prevention
counselor in your county by calling the Minnesota Home Ownership Center
at 651-659-9336 or 866-462-6466 or www.hocmn.org or contact the United
States Department of Housing and Urban Development at 1-800-569-4287 or
www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search=MN#searchArea."
new text end

new text begin (c) This subdivision does not apply to:
new text end

new text begin (1) a seller or buyer who has entered into a signed agency agreement, facilitator
agreement, or other written agreement to buy or sell the mortgagor's property with a
person licensed under chapter 82;
new text end

new text begin (2) a buyer who offers to buy the mortgagor's property for a purchase price that
meets or exceeds the amount required to be paid by the mortgagor to redeem the property,
unless the buyer or the mortgagor enters into a short sale agreement with the holder of
the sheriff's certificate in which the holder agrees to accept less than the full amount
required to redeem;
new text end

new text begin (3) a foreclosing lender acquiring the mortgagor's property by a deed in lieu of
foreclosure;
new text end

new text begin (4) a nonprofit lender holding a certificate of exemption from the Department of
Commerce; or
new text end

new text begin (5) the state or a local unit of government or an agent of the state or a local unit
of government.
new text end

new text begin Subd. 3. new text end

new text begin Private right of action. new text end

new text begin (a) Any person who violates subdivision 2 is liable
to the mortgagor for the sum of:
new text end

new text begin (1) actual, incidental, and consequential damages;
new text end

new text begin (2) $1,000 statutory damages; and
new text end

new text begin (3) costs, disbursements, and reasonable attorney fees.
new text end

new text begin (b) It shall be a rebuttable presumption that a person has complied with subdivision
2 if the person has recorded with the county recorder or registrar of titles an affidavit by a
person having knowledge of the facts, stating that the mortgagor received the notice
required under subdivision 2. The affidavit and a certified copy of a recorded affidavit
shall be prima facie evidence of the facts stated in the affidavit.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2010, and applies to
sheriff's sales conducted on or after that date. This section, including any subsequent
amendments to subdivision 2 or 3, expires on December 31, 2012.
new text end

Sec. 12.

Minnesota Statutes 2008, section 580.30, subdivision 1, is amended to read:

Subdivision 1.

Reinstatement.

In any proceedings for the foreclosure of a real
estate mortgage, whether by action or by advertisement, if at any time before the sale
of the premises under such foreclosure the mortgagor, the owner, or any holder of any
subsequent encumbrance or lien, or any one for them, shall pay or cause to be paid to the
holder of the mortgage so being foreclosed, or to the attorney foreclosing the same, or
to the sheriff of the county, the amount actually due thereon and constituting the default
actually existing in the conditions of the mortgage at the time of the commencement of the
foreclosure proceedings, including insurance, delinquent taxes, if any, upon the premises,
interest to date of payment, cost of publication and services of process or notices,
attorney's fees not exceeding $150 or one-half of the attorney's fees authorized by section
582.01, whichever is greater, new text begin any costs incurred when an order to reduce a mortgagor's
redemption period under section 582.032 is entered, including costs and disbursements
awarded under section 582.032, subdivision 9, new text end together with other lawful disbursements
necessarily incurred in connection with the proceedings by the party foreclosing, then,
and in that event, the mortgage shall be fully reinstated and further proceedings in such
foreclosure shall be thereupon abandoned.

Sec. 13.

Minnesota Statutes 2008, section 582.03, subdivision 1, is amended to read:

Subdivision 1.

Allowable costs collectable upon redemption.

The holder of any
sheriff's certificate of sale, from a foreclosure by advertisement or action of a mortgage
or lien or execution, or the holder of any certificate of redemption as a junior creditor
during the period of redemption, may pay and claim the following on redemption: any
taxes or assessments on which any penalty would otherwise accrue, and any costs of
a hazard insurance policy for the holder's interest in the mortgaged premises incurred
for the period of holding the sheriff's certificate, any costs incurred when an order to
reduce a mortgagor's redemption period under section 582.032 is entered, new text begin including costs
and disbursements awarded under section 582.032, subdivision 9, new text end any fees paid to the
county recorder, registrar of titles, or sheriff to obtain or record the certificates of sale or
redemption or notices of intention to redeem, any reasonable fees paid to licensed real
estate brokers for broker price opinions or to licensed appraisers for appraisals, any deed
tax paid to file a certificate of redemption, reasonable attorney fees incurred after the
foreclosure sale not to exceed one-half of the amount authorized by section 582.01, any
costs incurred under section 582.031, and any interest or installment of principal upon
any prior or superior mortgage, lien, or contract for deed in default or that becomes due
during the period of redemption. In all such cases, the costs so paid and claimed due, with
interest, shall be a part of the sum required to be paid to redeem from such sale. No other
costs, fees, interest, or other amount may be added to the amount necessary to redeem.

Sec. 14.

Minnesota Statutes 2008, section 582.032, is amended by adding a subdivision
to read:

new text begin Subd. 9. new text end

new text begin Costs. new text end

new text begin Upon motion of a political subdivision that initiated a proceeding
under subdivision 4 or intervened under subdivision 5, if an order is entered to reduce
the redemption period to five weeks, the court shall award costs and disbursements to
the political subdivision. The party foreclosing the mortgage or holding the sheriff's
certificate of sale is liable for an award under this subdivision but may recover these
amounts upon reinstatement or redemption as provided in section 580.30, subdivision 1,
or 582.03, subdivision 1.
new text end