Minnesota Session Laws - 1983, Regular Session

  

                         Laws of Minnesota 1983 

                        CHAPTER 215--H.F.No. 102
           An act relating to agricultural and residential real 
          estate; requiring 60 days' notice of default on a real 
          estate mortgage, notice of termination of a real 
          estate contract for deed, and eight weeks' notice of 
          commencement of a sale and foreclosure proceeding; 
          providing that a court may order a delay in a 
          foreclosure sale or contract termination under certain 
          circumstances; limiting the right to maintain actions 
          for deficiency judgments; amending Minnesota Statutes 
          1982, sections 47.20, by adding a subdivision; 559.21, 
          by adding a subdivision; proposing new law coded in 
          Minnesota Statutes, chapter 580; proposing new law 
          coded as Minnesota Statutes, chapter 583. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1982, section 47.20, is 
amended by adding a subdivision to read: 
    Subd. 15.  Notwithstanding the provisions of any other law 
to the contrary, any notice of default on homestead property as 
defined in section 5, mailed after the effective date of this 
section and prior to May 1, 1984, shall indicate that the 
borrower has 60 days from the date the notice is mailed in which 
to cure the default.  
    Sec. 2.  Minnesota Statutes 1982, section 559.21, is 
amended by adding a subdivision to read: 
    Subd. 6.  [TEMPORARY MINIMUM NOTICE.] Notwithstanding the 
provisions of any other law to the contrary, no contract for 
conveyance of homestead property, as defined in section 5, shall 
terminate until 60 days after service of notice if the notice is 
served after the effective date of this section and prior to May 
1, 1984 or 90 days after service of notice if the contract was 
entered into after May 1, 1980 and the contract vendee has paid 
25 percent or more of the purchase price.  The notice shall 
specify this 60- or 90-day period.  This section does not apply 
to earnest money contracts, purchase agreements or exercised 
options.  
    Sec. 3.  [580.031] [TEMPORARY MINIMUM NOTICE.] 
    Notwithstanding the provisions of any other law to the 
contrary, eight weeks' published notice must be given prior to 
the foreclosure sale of a homestead, as defined in section 5, if 
the notice is published for the first time after the effective 
date of this section and prior to May 1, 1984.  The notice must 
contain the information specified in section 580.04.  At least 
four weeks before the appointed time of sale, a copy of the 
notice must be served upon the person in possession of the 
mortgaged premises, if the premises are actually occupied.  
    Sec. 4.  [583.01] [LEGISLATIVE FINDINGS.] 
    The legislature finds that the number of unemployed persons 
in this state has reached the highest level since the Depression 
of the 1930's; that farm commodity prices are below the 
break-even point for the cost of production; that the number of 
mortgage loans currently in default due to the unemployment of 
the principal wage earner has reached critical levels; and that 
by reason of these conditions and the high rates of interest on 
mortgage loans, many of the citizens of this state will be 
unable for extended periods of time, to meet payments of taxes, 
interest, and principal of mortgages on their properties and 
are, therefore, threatened with loss of their real property 
through mortgage foreclosure, contract termination, and judicial 
sales.  The legislature further finds that these conditions have 
resulted in an emergency of a nature that justifies and 
validates legislation for the extension of the time prior to 
foreclosure and execution sales and for other relief.  
    Sec. 5.  [583.02] [DEFINITIONS.] 
    As used in sections 4 to 15, the term "homestead" means 
residential or agricultural real estate, a portion or all of 
which is entitled to receive homestead credit under section 
273.13, subdivision 15a.  
    Sec. 6.  [583.03] [APPLICATION.] 
    Subdivision 1.  [PROPERTY COVERED.] The provisions of 
sections 1 to 15 apply to first mortgages secured by and 
contracts for deed conveying, homesteads within the meaning of 
section 5, including:  
    (a) mortgages held by the United States or by any agency, 
department, bureau, or instrumentality of the United States, as 
security or pledge of the mortgagor, its successors or assigns; 
and 
    (b) mortgages held as security or pledge to secure payment 
of a public debt or to secure payment of the deposit of public 
funds.  
    Subd. 2.  [GENERAL EXCLUSION.] The provisions of sections 1 
to 15 do not apply to mortgages or contracts for deed made after 
the effective date of sections 1 to 15, nor to mortgages or 
contracts for deed made before the effective date of sections 1 
to 15, which are renewed or extended after the effective date of 
sections 1 to 15 for a period longer than one year, nor to 
mortgages, judgments, or contracts for deed, regardless of when 
made, if a second or subsequent mortgage is made against the 
property after the effective date of sections 1 to 15.  No court 
shall allow a stay, postponement, or extension of time that 
would cause any right to be lost or adversely affected by any 
statute of limitation.  
    Sec. 7.  [583.04] [MORTGAGOR MAY APPLY TO DISTRICT COURT 
FOR RELIEF.] 
    Any mortgagor, or owner in possession of the mortgaged 
premises, or anyone claiming under the mortgage, or anyone 
liable for the mortgage debt, may at any time after the issuance 
of the notice of the foreclosure proceedings and prior to the 
sale, petition the district court of the county where the 
foreclosure proceedings are pending, serving a summons and 
verified complaint requesting that the sale in foreclosure be 
postponed for up to six months or, in the case of a farm 
homestead located on more than ten acres, for up to 12 months. A 
contract for deed vendee or anyone claiming under the contract 
or liable for the contract payment, in any case where the 
contract has not yet been terminated as of the effective date of 
sections 4 to 15, may petition the district court in the same 
manner, requesting that the contract termination be delayed for 
up to 90 days.  Upon receiving the petition, the court shall 
order a stay in the foreclosure proceedings until after the 
hearing on the petition.  As a condition precedent to the 
postponement of the foreclosure sale, the party serving the 
verified complaint shall file it and pay to the clerk for the 
person foreclosing the mortgage the actual costs incurred, 
including attorney's fees, in the foreclosure proceeding before 
postponement.  As a condition precedent to delay of the contract 
termination, the party seeking relief shall file the verified 
complaint and pay to the clerk for the person canceling the 
contract, the actual costs, including attorney's fees incurred 
in the cancellation.  If payment is made by other than cash or 
certified check, the order postponing the sale or termination is 
not final until after the check or other negotiable instrument 
has been paid.  
    Sec. 8.  [583.05] [COURT MAY ORDER DELAY IN SALE; 
FINDINGS.] 
    The court may consider the following criteria in 
determining whether or not to order a delay in the sale or 
contract termination:  
     (1) that the petitioner is unemployed, underemployed or 
facing economic problems due to low farm commodity prices; and 
    (2) that the petitioner has an inability to make payments 
on the mortgage or contract for deed.  
    If the court grants or denies a delay in the sale, the 
mortgagee shall publish notice of the new sale date as provided 
in section 580.03.  Section 580.07 does not apply to foreclosure 
sales postponed by a court pursuant to sections 4 to 15.  
    Sec. 9.  [583.06] [COMPROMISES.] 
    If the parties to a foreclosure action agree in writing to 
a compromise settlement thereof, or of composition of the 
mortgage indebtedness, or both, the court shall have 
jurisdiction and may by its order confirm and approve the 
settlement or composition, or both, as the case may be.  
    Sec. 10.  [583.07] [REDUCTION OF REDEMPTION PERIOD.] 
    If the court grants a delay in the foreclosure sale 
pursuant to sections 4 to 15, the redemption period pursuant to 
section 580.23 shall be reduced by an equivalent period of time 
provided, that in no event shall the redemption period be less 
than 30 days.  If the court does not grant a delay in the 
foreclosure sale, the redemption period shall be as provided in 
section 580.23.  
    Sec. 11.  [583.08] [PARTIAL PAYMENT.] 
     The petition must also request the court to determine the 
reasonable value of the income on the property, or, if the 
property has no income, then the reasonable rental value of the 
property subject to the contract for deed or mortgage and must 
direct the contract vendee or mortgagor to pay all or a 
reasonable part of the income or rental value for the payment of 
taxes, insurance, interest or principal at the times and in the 
manner determined by the court.  In determining the amount of 
income or rental value to be paid, the court may consider the 
relative financial conditions and resources of the parties and 
the ability of the mortgagor or contract vendee to pay.  The 
court shall hear the petition and after the hearing shall make 
and file its order directing the payment by the contract vendee 
or mortgagor of an amount at the times and in the manner that 
the court determines just and equitable.  In the case of 
contracts for deed, the court shall insure that the payment 
required by the contract vendee is sufficient to adequately 
maintain the vendor's standard of living.  If the mortgagor or 
contract vendee defaults in the payments ordered, the mortgagee 
may immediately commence foreclosure proceedings as provided in 
section 580.03, and the contract vendor may terminate the 
contract 30 days after the default.  If default is claimed 
because of waste, the mortgagee or contract vendor may commence 
foreclosure proceedings or terminate the contract immediately 
after the filing of an order of the court finding the waste.  No 
action shall be maintained for a deficiency judgment until the 
period of redemption as allowed by section 580.23, or by 
sections 4 to 15, has expired.  
    Sec. 12.  [583.09] [COURT MAY REVISE AND ALTER TERMS.] 
    Upon the application of either party before the expiration 
of the extended period prior to the sale or contract termination 
and upon the presentation of evidence that the terms for partial 
payment fixed by the court are no longer just and reasonable, 
the court may revise and alter the terms, in the manner the 
changed circumstances and conditions require.  
    Sec. 13.  [583.10] [HEARING TO BE HELD WITHIN 30 DAYS.] 
    The hearing on the petition must be held within 30 days 
after the filing of the petition.  The order therein must be 
made and filed within five days after the hearing.  Review by 
the supreme court may be had by certiorari, if application for 
the writ is made within 15 days after notice of the order.  The 
writ is returnable within 30 days after the filing of the order. 
    Sec. 14.  [583.11] [LIMITATIONS.] 
    No postponement or extension shall be ordered under 
conditions which would substantially diminish or impair the 
value of the contract or obligation of the person against whom 
the relief is sought without reasonable allowance to justify the 
exercise of the police power authorized in sections 4 to 15, or 
which would cause irreparable harm or undue hardship to any 
mortgagee, contract vendor, judgment creditor, or their 
successors or assigns.  The remedy authorized by sections 4 to 
15 shall be available to a mortgagor or contract vendee only one 
time on any piece of property.  
    Sec. 15.  [583.12] [INCONSISTENT LAWS SUSPENDED.] 
    Every law, to the extent that it is inconsistent with 
sections 4 to 15 is suspended during the effective period of 
sections 4 to 15.  
    Sec. 16.  [REPEALER.] 
    Sections 1 to 15 are repealed effective July 1, 1984, but 
any postponement or other relief ordered by a court continues to 
be valid for the period ordered by the court.  
    Sec. 17.  [EFFECTIVE DATE.] 
    Sections 1 to 15 are effective the day following final 
enactment.  Section 16 is effective July 1, 1984. 
    Approved May 23, 1983