Bill Text: MN HF1180 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Homeowner loan modification request uniform process provided for use by lenders, and mortgage lenders required to record proof of compliance prior to foreclosure.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2011-03-17 - Introduction and first reading, referred to Commerce and Regulatory Reform [HF1180 Detail]
Download: Minnesota-2011-HF1180-Introduced.html
1.2relating to mortgage foreclosures; providing a uniform process for use by lenders
1.3in responding to mortgage loan modification requests by homeowners; requiring
1.4mortgage lenders to record proof of compliance prior to foreclosure;proposing
1.5coding for new law as Minnesota Statutes, chapter 584.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. [584.01] DEFINITIONS.
1.8 Subdivision 1. Scope. For purposes of this chapter, the terms defined in this section
1.9have the meanings given.
1.10 Subd. 2. Affidavit of compliance. "Affidavit of compliance" means a sworn
1.11affidavit recorded by the mortgagee with the county recorder or registrar of titles as
1.12required under section 584.02.
1.13 Subd. 3. Completed loan modification application. "Completed loan modification
1.14application" means all the documents and information reasonably necessary for a
1.15mortgagee to determine the mortgagor's eligibility for a loan modification program have
1.16been provided to the mortgagee.
1.17 Subd. 4. Foreclosure. "Foreclosure" means foreclosure of a residential mortgage
1.18loan by advertisement under chapter 580, by action under chapter 581, or by any other
1.19method permitted by law.
1.20 Subd. 5. Incomplete loan modification application. "Incomplete loan modification
1.21application" means a loan modification application that lacks documents or information
1.22necessary for a completed loan modification application, or a written submission from or
1.23on behalf of a mortgagor demonstrating the mortgagor's intent to seek a loan modification.
1.24 Subd. 6. Loan modification. "Loan modification" means a permanent alteration to
1.25the terms and conditions of a residential mortgage loan under a loan modification program.
2.1 Subd. 7. Loan modification notice. "Loan modification notice" means the notice
2.2required by section 584.04.
2.3 Subd. 8. Loan modification program. "Loan modification program" means
2.4any government program that requires the mortgagee to make a loan modification to a
2.5residential mortgage loan.
2.6 Subd. 9. Mortgagee. "Mortgagee" means a person foreclosing a residential
2.7mortgage, and any agent or employee of that person acting in connection with the
2.8foreclosure of a residential mortgage, including but not limited to a mortgagee, a mortgage
2.9servicer, or the owner of the mortgage loan.
2.10 Subd. 10. Residential mortgage loan. "Residential mortgage loan" means a
2.11mortgage loan on real property consisting of one to four family dwelling units, one of
2.12which the owner occupies as the owner's principal place of residency at the time of default.
2.13 Subd. 11. Telephone contact attempt. "Telephone contact attempt" means an
2.14attempt by the mortgagee to contact the mortgagor that complies with the requirements
2.15of section 584.03, subdivision 4.
2.16 Sec. 2. [584.02] REQUISITES TO FORECLOSE.
2.17 Subdivision 1. Required recording of loan modification affidavit of compliance
2.18before foreclosure. No foreclosure shall commence until the mortgagee has complied
2.19with this chapter. Before the notice required by section 580.021 is provided to the
2.20mortgagor, the mortgagee must record an affidavit of compliance. The affidavit must be
2.21accurate and must attach supporting documents that establish that all requirements of
2.22this chapter have been met. The affidavit must include the date, time, and name of the
2.23representative who made each required telephone contact attempt. Within five days of
2.24recording this affidavit, the mortgagee shall mail a copy of the affidavit to the mortgagor.
2.25 Subd. 2. Form of affidavit of compliance. To comply with the requirements of this
2.26chapter, a mortgagee must record an affidavit of compliance that appears substantially
2.27as follows:
2.29[Identifying information relating to the case, such as party names, addresses, contact
2.30information, etc.]
2.31The undersigned, being duly sworn, hereby deposes and says:
2.321. I am the [job title] of [mortgagee] and am authorized to sign on behalf of
2.33[mortgagee].
2.342. I am familiar with the business records and procedures of [mortgagee].
3.13. I have specific knowledge of the mortgage loan held by the mortgagor and of
3.2all information sworn to in this affidavit.
3.34. [Mortgagee] has the right to proceed with foreclosure and is not required to offer
3.4a loan modification to mortgagor because (mortgagee MUST list one of the following
3.5reasons):
3.6(1) Prior to mortgagor applying for a loan modification, [mortgagee] had reliable
3.7information that led the [mortgagee] in good faith to conclude that the mortgagor is
3.8ineligible for a loan modification program and has notified the mortgagor of that, (2)
3.9mortgagor did not send to [mortgagee] a loan modification application within 60 days
3.10of the sending of the loan modification notice, (3) mortgagor sent an incomplete loan
3.11modification application, was notified by [mortgagee] of the deficiencies, and has not
3.12remedied the missing information by the deadline for a completed loan modification
3.13application, (4) mortgagor sent a completed loan modification application, but based
3.14upon reliable information, and in good faith, [mortgagee] has concluded that mortgagor
3.15is ineligible for a modification and has notified the mortgagor, (5) mortgagor has sent a
3.16completed loan modification application and has been offered a loan modification, but
3.17has elected not to accept the modification offer, (6) [mortgagee] has previously granted a
3.18mortgage loan modification to mortgagor, and mortgagor is in default on that mortgage
3.19loan modification agreement, and [mortgagee] has concluded in good faith that mortgagor
3.20is not eligible for any additional mortgage loan modification.
3.215. [Mortgagee] has notified the mortgagor of the reason listed above and complied
3.22with all notice requirements of this chapter.
3.236. Attached are documents which [mortgagee] represents to be accurate and correct
3.24and which support the reason listed above.
3.25[Mortgagee must attach supporting documents that establish that all requirements
3.26of this chapter have been met].
3.27Signature: [agent of mortgagee]
3.28Legibly printed name [agent of mortgagee]
3.29 Sec. 3. [584.03] NOTICE REQUIREMENTS.
3.30 Subdivision 1. General. Notices required by this chapter must comply with the
3.31requirements of this section.
3.32 Subd. 2. Form of written notice. Written notices required by this chapter must
3.33be in 14-point boldface type. The color and format of the notice must not obscure or
3.34overshadow the content of the notice. The title of the notice must be in 20-point boldface
3.35type. The notice must be on its own, separate page and must not be accompanied by any
4.1other documents or notices other than as specified in this chapter. The envelope or mailing
4.2package in which the notice is sent must be colored and contain the phrase "LOAN
4.3MODIFICATION INFORMATION" and "NOTICE REQUIRED BY THE STATE OF
4.4MINNESOTA" in a minimum of 14-point boldface type, located above the recipient's
4.5name and address. The written notices required by this chapter shall not contain any bills,
4.6requests for payment of current or past due amounts, collection notices, or references to
4.7collection of any kind, unless any such information is necessary for the determination
4.8of loan modification or is requested by the mortgagor. Any time a written response is
4.9required by the mortgagor, the mailing must include a return-addressed envelope. Any
4.10return-addressed envelope required by this chapter must state conspicuously, "Please
4.11consider sending this letter by a method that provides proof of delivery."
4.12 Subd. 3. Delivery of written notices. Notices required by this chapter must be
4.13sent to the last known address of the mortgagor. Notices must be sent by a method that
4.14provides proof of delivery. Notices required by this chapter shall also be transmitted
4.15within one business day in substantially similar form by email to the mortgagor if the
4.16mortgagee has a valid email address for the mortgagor.
4.17 Subd. 4. Telephone contact attempt. A telephone contact attempt by a mortgagee
4.18under this chapter must meet the following requirements:
4.19(1) the mortgagee shall use the last known telephone number of the mortgagor;
4.20(2) no call shall be initiated by the mortgagee between 9:00 p.m. and 8:00 a.m. in
4.21the mortgagor's time zone;
4.22(3) all calls must be conducted by a live representative, and the use of automated
4.23dialers is prohibited; and
4.24(4) the representative of the mortgagee must be authorized to and reasonably capable
4.25of discussing available loan modification programs and must encourage the mortgagor to
4.26take the next applicable steps for loan modification.
4.27 Subd. 5. Transparency of loan modification formula. The mortgagee shall publish
4.28on a Web site any net present value (NPV) formula the mortgagee uses to make any
4.29determination of eligibility under a loan modification program. Any NPV or similar tests
4.30and any data inputs used for making the determination of eligibility for a loan modification
4.31for a mortgagor must be retained by the mortgagee for a period of three years and must be
4.32provided to the mortgagor within seven days of request by the mortgagor.
4.33 Sec. 4. [584.04] NOTICES OF LOAN MODIFICATION AVAILABILITY.
4.34 Subdivision 1. Notice required. A mortgagee shall provide to the mortgagor the
4.35notices required by this section. The mortgagee may record an affidavit of compliance if
5.1the mortgagor fails to mail to the mortgagee a completed loan modification application
5.2or an incomplete loan modification application within 60 days of the mortgagee sending
5.3the notices.
5.4 Subd. 2. Loan modification notice. The mortgagee shall send to the mortgagor a
5.5notice that appears substantially as follows:
5.7Date of Notice: (insert date sent)
5.8Name of Mortgagor(s):
5.10You may be eligible to prevent foreclosure by receiving a loan modification under a
5.11government loan modification program. If you apply for a loan modification within 60
5.12days from the date of this notice, you will have certain rights under Minnesota law to a
5.13prompt evaluation of your request for a loan modification.
5.14You may apply for a loan modification by completing the enclosed Loan
5.15Modification Application and providing all requested information. We have included a
5.16return-addressed envelope for your convenience. Please consider sending these documents
5.17by a method that provides proof of delivery to ensure accurate record keeping.
5.19Please make sure to read this letter carefully so that you can take advantage of your
5.20potential options for a loan modification. Please make sure all documents mentioned in
5.21this letter are enclosed or available to you, and contact us immediately if a document is
5.22missing.
5.24We strongly encourage you to contact a foreclosure prevention counselor from the
5.25list below, and have the counselor review and assist you with your loan modification
5.26application.
5.28[Mortgagee contact information, including mailing address, toll-free phone number,
5.29and e-mail address.]
5.30[Contact information for at least one HUD-certified foreclosure counseling agency
5.31that serves the county in which the mortgagor lives and contact information for the
5.32Minnesota Home Ownership Center. Include: name, mailing address, toll-free phone
5.33number, e-mail address, and Web site.]
5.34 Subd. 3. Application for loan modification. The mortgagee shall send with the
5.35notice required by subdivision 2 an application form that appears substantially as follows:
6.2Date of Notice: (insert date sent)
6.3Name of Mortgagor(s):
6.4Property Address:
6.5Please complete this loan application form and attach the documents and information
6.6requested from the "required documents list." Return the completed application to the
6.7address at the bottom of this form within 60 days of the date of this form.
6.8For questions or assistance completing this application, please contact [mortgagee
6.9representative(s) who can provide assistance] at [telephone number of representative(s)] or
6.10[e-mail address of representative(s)] immediately; OR [loan counselor(s) who can provide
6.11assistance] at [telephone number of counselor(s)] or [e-mail address of counselor(s).]
6.12Required Documents List. The following documents must be sent to us in order for
6.13us to process your loan modification application.
6.14[All documents required by the applicable Loan Modification Program, listed
6.15separately and numbered, with attached documents listed first.]
6.16Attached Documents List. To make your application as easy as possible, we have
6.17included some of the documents you need to complete in order to apply for a modification.
6.18These documents are listed below. Remember that they must be sent with all materials
6.19listed in the Required Documents List. Please verify that every document listed below is
6.20included:
6.21[All documents required by the applicable loan modification program which can be
6.22provided by the mortgagee must be attached, listed separately, and numbered.]
6.23If any of these documents is not included in this packet, please contact [mortgagee
6.24representative(s) who can forward the missing information] at [telephone number of
6.25representative(s)] or [e-mail address of representative(s)] immediately.
6.26PLEASE MAKE A COPY OF ALL ENCLOSED FORMS AND DOCUMENTS
6.27FOR YOUR RECORDS.
6.28For accurate record keeping, we strongly encourage you to send this completed form
6.29and all requested documents with return receipt requested or by other method with proof
6.30of delivery to the address below:
6.32Thank you. [Mortgagee] will contact you within 30 days of receipt to inform you of
6.33the status of your loan modification application.
6.34 Subd. 4. Required attached documents. The mortgagee shall enclose any
6.35documents required for a completed loan modification application which can be provided
6.36by the mortgagee.
7.1 Subd. 5. Telephone contact attempt required. The mortgagee is required to make
7.2six telephone contact attempts to inform the mortgagor of possible eligibility for a loan
7.3modification program within 50 days after the date the loan modification notice is sent. If
7.4the mortgagee speaks with the mortgagor or someone authorized to speak on behalf of the
7.5mortgagor, no further contact attempts are required under this subdivision.
7.6 Subd. 6. Deadline notice. If the mortgagee has not received a completed loan
7.7modification application or incomplete loan modification application 50 days after the date
7.8the loan modification notice is sent, the mortgagor shall within five days do the following:
7.9(1) make one telephone contact attempt to inform the mortgagor of the approaching
7.10deadline and communicate to the mortgagor the documents necessary to submit a loan
7.11modification application; and (2) if mortgagee has an email address for the mortgagor,
7.12send an e-mail to the mortgagor stating the approaching deadline.
7.13 Sec. 5. [584.05] NOTICE OF INCOMPLETE LOAN MODIFICATION
7.14APPLICATION.
7.15 Subdivision 1. Receipt of incomplete loan modification application. If the
7.16mortgagor mails an incomplete loan modification application within 60 days of the
7.17date the loan modification notice is sent by the mortgagee, the mortgagee must send to
7.18the mortgagor the notice required by subdivision 2 within ten days of the receipt of the
7.19incomplete loan application. The mortgagee may record an affidavit of compliance if the
7.20mortgagor has not mailed to the mortgagee a completed loan application within 30 days
7.21after the date of mailing of the notice required by subdivision 2, but not less than 60 days
7.22after the date the loan modification notice is sent by the mortgagee.
7.23 Subd. 2. Incomplete loan modification application notice. If an incomplete loan
7.24modification application has been received by the mortgagee, the mortgagee must send the
7.25notice to the mortgagor that appears substantially as follows:
7.27Date of Notice: (insert date sent)
7.28Name of Mortgagor(s):
7.29You recently submitted an application for a loan modification. Unfortunately, it was
7.30not complete. We require more information to evaluate your eligibility for a modification.
7.32[numbered list of all missing or incomplete documents, described in plain language.
7.33For each incomplete document, the mortgagee must describe in plain language the
7.34information that is missing.]
8.1PLEASE NOTE: We must receive this information within 30 days of the date of
8.2this notice for you to protect certain rights under Minnesota law to a prompt evaluation
8.3of your request for a loan modification.
8.4 Subd. 3. Inclusions with incomplete loan modification application. The
8.5second page of this notice must be a glossary describing the nature of any missing or
8.6incomplete documents and in plain language where the documents are available and how
8.7to submit them. If the mortgagor has partially completed a form from section 584.04, any
8.8information from that form must be included on the copy sent to the mortgagor pursuant
8.9to this section, with the locations of the missing information conspicuously marked.
8.10 Subd. 4. Telephone contact attempts. The mortgagee must make three telephone
8.11contact attempts to inform the mortgagor of any deficiencies necessary to make a
8.12completed loan modification application. The first telephone contact attempt must be
8.13made within ten days of receipt of the incomplete loan modification application, and all
8.14three attempts must be completed within 15 days of the first attempt.
8.15 Sec. 6. [584.06] NOTICE OF DETERMINATION.
8.16 Subdivision 1. Determination required. The mortgagee must determine eligibility
8.17for each loan modification program for which the mortgagor may be eligible and issue a
8.18notice of determination as specified under this section within 30 days of the receipt of a
8.19completed loan modification application. The mortgagee shall comply with all guidelines
8.20and requirements of each loan modification program in connection with this determination.
8.21 Subd. 2. Loan modification offer. If the mortgagee determines that the mortgagor
8.22is eligible for a loan modification program, the mortgagee shall state the following in
8.23plain language in a written notice of the loan modification offer or offers for each loan
8.24modification program for which the mortgagor is eligible: a description of the terms of the
8.25modified loan offer; an explanation of any required timeline to respond to the offer; that the
8.26mortgagee is permitted to initiate foreclosure proceedings upon failure of the mortgagor to
8.27accept the offer; instructions regarding how the mortgagor should respond to the offer; and
8.28accurate contact information for how the mortgagor should respond to the offer.
8.29 Subd. 3. Refusal to offer loan modification. If the mortgagee determines that the
8.30mortgagor is not eligible for any loan modification program, the mortgagee shall state the
8.31following in plain language in a written notice: the timeline and procedures, if applicable,
8.32for how the mortgagor may request review of the determination; that failure to do so will
8.33free the mortgagee to initiate foreclosure proceedings; and the toll-free telephone number,
8.34address, e-mail address, and other contact information that will provide access during
8.35regular business hours to a live representative authorized to discuss the determination
9.1on behalf of the mortgagee. The timeline for the mortgagor to request a review of the
9.2determination must be at least 30 days after the date of mailing of the written notice of
9.3ineligibility and must be stated prominently in the written notice of ineligibility. The
9.4written notice of ineligibility must be accompanied by a form for the mortgagee to use in
9.5appealing the determination of ineligibility. The mortgagee may record an affidavit of
9.6compliance after making a determination in good faith that the mortgagor is ineligible for
9.7a loan modification, but the mortgagee shall not record an affidavit of compliance until at
9.8least 35 days after mailing the notice of ineligibility.
9.9 Subd. 4. General inclusions. Any notice described in this section must contain
9.10a detailed, clear description of any and all net present value (NPV) calculations used in
9.11making the determination, instructions explaining how to access the published NPV
9.12calculations contained on the mortgagee's Web site as required under section 584.03,
9.13subdivision 5, and a plain language statement that if the mortgagor believes there is an
9.14error in any element of the determination that the mortgagor has the right to contact an
9.15attorney or loan counselor for assistance. This mailing must include any and all data
9.16inputs used in the NPV calculations, which must be on a separate piece of paper.
9.17 Sec. 7. [584.07] NOTICE FOR INELIGIBLE HOMEOWNER.
9.18The mortgagee may record an affidavit of compliance if, prior to sending the loan
9.19modification notices, the mortgagee has reliable information that leads the mortgagee in
9.20good faith to conclude that the mortgagor is ineligible for any applicable loan modification
9.21program. Ten days prior to recording the affidavit of compliance, the mortgagee must
9.22send a written communication to the ineligible mortgagor. This written communication
9.23must contain a plain language statement explaining why the mortgagor is ineligible,
9.24and a toll-free telephone number, address, and e-mail address of a representative of the
9.25mortgagee that the mortgagor may contact to dispute any finding of ineligibility. The
9.26plain language statement must state that the mortgagor may contact a loan counselor or
9.27foreclosure prevention counselor for advice.
9.28 Sec. 8. [584.08] ENFORCEMENT; REMEDIES.
9.29 Subdivision 1. Private right of action. A mortgagee who fails to comply with any
9.30provision of this chapter is liable to a mortgagor for actual, incidental, and consequential
9.31damages in a private right of action and for any or all other remedies specified in this
9.32section.
9.33 Subd. 2. Statutory damages. (a) A mortgagee who violates any provision of this
9.34chapter is liable to the mortgagor for up to $2,000 for each violation.
10.1(b) De minimus violations are not subject to the statutory damages available under
10.2this subdivision.
10.3 Subd. 3. Punitive damages. (a) A mortgagor is entitled to punitive damages under
10.4paragraphs (b) and (c) and section 549.20.
10.5(b) The court may award punitive damages if the mortgagee has failed to issue
10.6a notice of determination within 30 days of the mortgagee's receipt of a completed
10.7loan modification application. There is a rebuttable presumption that all required
10.8documentation has been provided to the mortgagee for purposes of a completed loan
10.9modification application if the mortgagor can provide:
10.10(1) copies of all such required documents to the court; and either
10.11(2) proof of mortgagee's receipt of a completed loan modification application; or
10.12(3) a sworn affidavit by a HUD-approved counseling agency or substantially similar
10.13third party that those documents were sent to the mortgagee.
10.14(c) The court may award punitive damages to the mortgagor if the mortgagee did not
10.15in good faith attempt to comply with the standards, duties, prohibitions, or requirements of
10.16this chapter. Factors the court must consider in determining a lack of good faith include,
10.17but are not limited to:
10.18(1) the frequency, nature, and persistence of noncompliance;
10.19(2) a pattern of violations;
10.20(3) the extent to which the violation was reckless or intentional; or
10.21(4) a violation that results in, or substantially contributes to, the mortgagor's loss
10.22of home.
10.23 Subd. 4. Injunctive relief. The court may issue an injunction to prevent violations
10.24of this chapter and to enjoin foreclosure in violation of this chapter.
10.25 Subd. 5. Reimbursement for litigation costs. A prevailing plaintiff shall recover
10.26costs and disbursements of the action, plus reasonable attorney fees.
10.27 Subd. 6. Remedies cumulative. The remedies provided in this section are
10.28cumulative and do not restrict any remedy that is otherwise available.
10.29 Subd. 7. Public enforcement. (a) The attorney general may enforce this chapter
10.30under section 8.31.
10.31(b) The commissioner of commerce may enforce this chapter under chapter 45.
10.32 Sec. 9. [584.09] APPLICABILITY TO PRIORITY OF LOANS.
10.33A loan modification, as defined in section 584.01, does not affect the priority of the
10.34lien of the mortgage that secures the loan.
11.1 Sec. 10. EFFECTIVE DATE; APPLICABILITY.
11.2Sections 1 to 9 are effective 60 days after enactment, and apply to foreclosures of
11.3residential mortgages commenced on or after that date.
1.3in responding to mortgage loan modification requests by homeowners; requiring
1.4mortgage lenders to record proof of compliance prior to foreclosure;proposing
1.5coding for new law as Minnesota Statutes, chapter 584.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. [584.01] DEFINITIONS.
1.8 Subdivision 1. Scope. For purposes of this chapter, the terms defined in this section
1.9have the meanings given.
1.10 Subd. 2. Affidavit of compliance. "Affidavit of compliance" means a sworn
1.11affidavit recorded by the mortgagee with the county recorder or registrar of titles as
1.12required under section 584.02.
1.13 Subd. 3. Completed loan modification application. "Completed loan modification
1.14application" means all the documents and information reasonably necessary for a
1.15mortgagee to determine the mortgagor's eligibility for a loan modification program have
1.16been provided to the mortgagee.
1.17 Subd. 4. Foreclosure. "Foreclosure" means foreclosure of a residential mortgage
1.18loan by advertisement under chapter 580, by action under chapter 581, or by any other
1.19method permitted by law.
1.20 Subd. 5. Incomplete loan modification application. "Incomplete loan modification
1.21application" means a loan modification application that lacks documents or information
1.22necessary for a completed loan modification application, or a written submission from or
1.23on behalf of a mortgagor demonstrating the mortgagor's intent to seek a loan modification.
1.24 Subd. 6. Loan modification. "Loan modification" means a permanent alteration to
1.25the terms and conditions of a residential mortgage loan under a loan modification program.
2.1 Subd. 7. Loan modification notice. "Loan modification notice" means the notice
2.2required by section 584.04.
2.3 Subd. 8. Loan modification program. "Loan modification program" means
2.4any government program that requires the mortgagee to make a loan modification to a
2.5residential mortgage loan.
2.6 Subd. 9. Mortgagee. "Mortgagee" means a person foreclosing a residential
2.7mortgage, and any agent or employee of that person acting in connection with the
2.8foreclosure of a residential mortgage, including but not limited to a mortgagee, a mortgage
2.9servicer, or the owner of the mortgage loan.
2.10 Subd. 10. Residential mortgage loan. "Residential mortgage loan" means a
2.11mortgage loan on real property consisting of one to four family dwelling units, one of
2.12which the owner occupies as the owner's principal place of residency at the time of default.
2.13 Subd. 11. Telephone contact attempt. "Telephone contact attempt" means an
2.14attempt by the mortgagee to contact the mortgagor that complies with the requirements
2.15of section 584.03, subdivision 4.
2.16 Sec. 2. [584.02] REQUISITES TO FORECLOSE.
2.17 Subdivision 1. Required recording of loan modification affidavit of compliance
2.18before foreclosure. No foreclosure shall commence until the mortgagee has complied
2.19with this chapter. Before the notice required by section 580.021 is provided to the
2.20mortgagor, the mortgagee must record an affidavit of compliance. The affidavit must be
2.21accurate and must attach supporting documents that establish that all requirements of
2.22this chapter have been met. The affidavit must include the date, time, and name of the
2.23representative who made each required telephone contact attempt. Within five days of
2.24recording this affidavit, the mortgagee shall mail a copy of the affidavit to the mortgagor.
2.25 Subd. 2. Form of affidavit of compliance. To comply with the requirements of this
2.26chapter, a mortgagee must record an affidavit of compliance that appears substantially
2.27as follows:
2.29[Identifying information relating to the case, such as party names, addresses, contact
2.30information, etc.]
2.31The undersigned, being duly sworn, hereby deposes and says:
2.321. I am the [job title] of [mortgagee] and am authorized to sign on behalf of
2.33[mortgagee].
2.342. I am familiar with the business records and procedures of [mortgagee].
3.13. I have specific knowledge of the mortgage loan held by the mortgagor and of
3.2all information sworn to in this affidavit.
3.34. [Mortgagee] has the right to proceed with foreclosure and is not required to offer
3.4a loan modification to mortgagor because (mortgagee MUST list one of the following
3.5reasons):
3.6(1) Prior to mortgagor applying for a loan modification, [mortgagee] had reliable
3.7information that led the [mortgagee] in good faith to conclude that the mortgagor is
3.8ineligible for a loan modification program and has notified the mortgagor of that, (2)
3.9mortgagor did not send to [mortgagee] a loan modification application within 60 days
3.10of the sending of the loan modification notice, (3) mortgagor sent an incomplete loan
3.11modification application, was notified by [mortgagee] of the deficiencies, and has not
3.12remedied the missing information by the deadline for a completed loan modification
3.13application, (4) mortgagor sent a completed loan modification application, but based
3.14upon reliable information, and in good faith, [mortgagee] has concluded that mortgagor
3.15is ineligible for a modification and has notified the mortgagor, (5) mortgagor has sent a
3.16completed loan modification application and has been offered a loan modification, but
3.17has elected not to accept the modification offer, (6) [mortgagee] has previously granted a
3.18mortgage loan modification to mortgagor, and mortgagor is in default on that mortgage
3.19loan modification agreement, and [mortgagee] has concluded in good faith that mortgagor
3.20is not eligible for any additional mortgage loan modification.
3.215. [Mortgagee] has notified the mortgagor of the reason listed above and complied
3.22with all notice requirements of this chapter.
3.236. Attached are documents which [mortgagee] represents to be accurate and correct
3.24and which support the reason listed above.
3.25[Mortgagee must attach supporting documents that establish that all requirements
3.26of this chapter have been met].
3.27Signature: [agent of mortgagee]
3.28Legibly printed name [agent of mortgagee]
3.29 Sec. 3. [584.03] NOTICE REQUIREMENTS.
3.30 Subdivision 1. General. Notices required by this chapter must comply with the
3.31requirements of this section.
3.32 Subd. 2. Form of written notice. Written notices required by this chapter must
3.33be in 14-point boldface type. The color and format of the notice must not obscure or
3.34overshadow the content of the notice. The title of the notice must be in 20-point boldface
3.35type. The notice must be on its own, separate page and must not be accompanied by any
4.1other documents or notices other than as specified in this chapter. The envelope or mailing
4.2package in which the notice is sent must be colored and contain the phrase "LOAN
4.3MODIFICATION INFORMATION" and "NOTICE REQUIRED BY THE STATE OF
4.4MINNESOTA" in a minimum of 14-point boldface type, located above the recipient's
4.5name and address. The written notices required by this chapter shall not contain any bills,
4.6requests for payment of current or past due amounts, collection notices, or references to
4.7collection of any kind, unless any such information is necessary for the determination
4.8of loan modification or is requested by the mortgagor. Any time a written response is
4.9required by the mortgagor, the mailing must include a return-addressed envelope. Any
4.10return-addressed envelope required by this chapter must state conspicuously, "Please
4.11consider sending this letter by a method that provides proof of delivery."
4.12 Subd. 3. Delivery of written notices. Notices required by this chapter must be
4.13sent to the last known address of the mortgagor. Notices must be sent by a method that
4.14provides proof of delivery. Notices required by this chapter shall also be transmitted
4.15within one business day in substantially similar form by email to the mortgagor if the
4.16mortgagee has a valid email address for the mortgagor.
4.17 Subd. 4. Telephone contact attempt. A telephone contact attempt by a mortgagee
4.18under this chapter must meet the following requirements:
4.19(1) the mortgagee shall use the last known telephone number of the mortgagor;
4.20(2) no call shall be initiated by the mortgagee between 9:00 p.m. and 8:00 a.m. in
4.21the mortgagor's time zone;
4.22(3) all calls must be conducted by a live representative, and the use of automated
4.23dialers is prohibited; and
4.24(4) the representative of the mortgagee must be authorized to and reasonably capable
4.25of discussing available loan modification programs and must encourage the mortgagor to
4.26take the next applicable steps for loan modification.
4.27 Subd. 5. Transparency of loan modification formula. The mortgagee shall publish
4.28on a Web site any net present value (NPV) formula the mortgagee uses to make any
4.29determination of eligibility under a loan modification program. Any NPV or similar tests
4.30and any data inputs used for making the determination of eligibility for a loan modification
4.31for a mortgagor must be retained by the mortgagee for a period of three years and must be
4.32provided to the mortgagor within seven days of request by the mortgagor.
4.33 Sec. 4. [584.04] NOTICES OF LOAN MODIFICATION AVAILABILITY.
4.34 Subdivision 1. Notice required. A mortgagee shall provide to the mortgagor the
4.35notices required by this section. The mortgagee may record an affidavit of compliance if
5.1the mortgagor fails to mail to the mortgagee a completed loan modification application
5.2or an incomplete loan modification application within 60 days of the mortgagee sending
5.3the notices.
5.4 Subd. 2. Loan modification notice. The mortgagee shall send to the mortgagor a
5.5notice that appears substantially as follows:
5.7Date of Notice: (insert date sent)
5.8Name of Mortgagor(s):
5.10You may be eligible to prevent foreclosure by receiving a loan modification under a
5.11government loan modification program. If you apply for a loan modification within 60
5.12days from the date of this notice, you will have certain rights under Minnesota law to a
5.13prompt evaluation of your request for a loan modification.
5.14You may apply for a loan modification by completing the enclosed Loan
5.15Modification Application and providing all requested information. We have included a
5.16return-addressed envelope for your convenience. Please consider sending these documents
5.17by a method that provides proof of delivery to ensure accurate record keeping.
5.19Please make sure to read this letter carefully so that you can take advantage of your
5.20potential options for a loan modification. Please make sure all documents mentioned in
5.21this letter are enclosed or available to you, and contact us immediately if a document is
5.22missing.
5.24We strongly encourage you to contact a foreclosure prevention counselor from the
5.25list below, and have the counselor review and assist you with your loan modification
5.26application.
5.28[Mortgagee contact information, including mailing address, toll-free phone number,
5.29and e-mail address.]
5.30[Contact information for at least one HUD-certified foreclosure counseling agency
5.31that serves the county in which the mortgagor lives and contact information for the
5.32Minnesota Home Ownership Center. Include: name, mailing address, toll-free phone
5.33number, e-mail address, and Web site.]
5.34 Subd. 3. Application for loan modification. The mortgagee shall send with the
5.35notice required by subdivision 2 an application form that appears substantially as follows:
6.2Date of Notice: (insert date sent)
6.3Name of Mortgagor(s):
6.4Property Address:
6.5Please complete this loan application form and attach the documents and information
6.6requested from the "required documents list." Return the completed application to the
6.7address at the bottom of this form within 60 days of the date of this form.
6.8For questions or assistance completing this application, please contact [mortgagee
6.9representative(s) who can provide assistance] at [telephone number of representative(s)] or
6.10[e-mail address of representative(s)] immediately; OR [loan counselor(s) who can provide
6.11assistance] at [telephone number of counselor(s)] or [e-mail address of counselor(s).]
6.12Required Documents List. The following documents must be sent to us in order for
6.13us to process your loan modification application.
6.14[All documents required by the applicable Loan Modification Program, listed
6.15separately and numbered, with attached documents listed first.]
6.16Attached Documents List. To make your application as easy as possible, we have
6.17included some of the documents you need to complete in order to apply for a modification.
6.18These documents are listed below. Remember that they must be sent with all materials
6.19listed in the Required Documents List. Please verify that every document listed below is
6.20included:
6.21[All documents required by the applicable loan modification program which can be
6.22provided by the mortgagee must be attached, listed separately, and numbered.]
6.23If any of these documents is not included in this packet, please contact [mortgagee
6.24representative(s) who can forward the missing information] at [telephone number of
6.25representative(s)] or [e-mail address of representative(s)] immediately.
6.26PLEASE MAKE A COPY OF ALL ENCLOSED FORMS AND DOCUMENTS
6.27FOR YOUR RECORDS.
6.28For accurate record keeping, we strongly encourage you to send this completed form
6.29and all requested documents with return receipt requested or by other method with proof
6.30of delivery to the address below:
6.32Thank you. [Mortgagee] will contact you within 30 days of receipt to inform you of
6.33the status of your loan modification application.
6.34 Subd. 4. Required attached documents. The mortgagee shall enclose any
6.35documents required for a completed loan modification application which can be provided
6.36by the mortgagee.
7.1 Subd. 5. Telephone contact attempt required. The mortgagee is required to make
7.2six telephone contact attempts to inform the mortgagor of possible eligibility for a loan
7.3modification program within 50 days after the date the loan modification notice is sent. If
7.4the mortgagee speaks with the mortgagor or someone authorized to speak on behalf of the
7.5mortgagor, no further contact attempts are required under this subdivision.
7.6 Subd. 6. Deadline notice. If the mortgagee has not received a completed loan
7.7modification application or incomplete loan modification application 50 days after the date
7.8the loan modification notice is sent, the mortgagor shall within five days do the following:
7.9(1) make one telephone contact attempt to inform the mortgagor of the approaching
7.10deadline and communicate to the mortgagor the documents necessary to submit a loan
7.11modification application; and (2) if mortgagee has an email address for the mortgagor,
7.12send an e-mail to the mortgagor stating the approaching deadline.
7.13 Sec. 5. [584.05] NOTICE OF INCOMPLETE LOAN MODIFICATION
7.14APPLICATION.
7.15 Subdivision 1. Receipt of incomplete loan modification application. If the
7.16mortgagor mails an incomplete loan modification application within 60 days of the
7.17date the loan modification notice is sent by the mortgagee, the mortgagee must send to
7.18the mortgagor the notice required by subdivision 2 within ten days of the receipt of the
7.19incomplete loan application. The mortgagee may record an affidavit of compliance if the
7.20mortgagor has not mailed to the mortgagee a completed loan application within 30 days
7.21after the date of mailing of the notice required by subdivision 2, but not less than 60 days
7.22after the date the loan modification notice is sent by the mortgagee.
7.23 Subd. 2. Incomplete loan modification application notice. If an incomplete loan
7.24modification application has been received by the mortgagee, the mortgagee must send the
7.25notice to the mortgagor that appears substantially as follows:
7.27Date of Notice: (insert date sent)
7.28Name of Mortgagor(s):
7.29You recently submitted an application for a loan modification. Unfortunately, it was
7.30not complete. We require more information to evaluate your eligibility for a modification.
7.32[numbered list of all missing or incomplete documents, described in plain language.
7.33For each incomplete document, the mortgagee must describe in plain language the
7.34information that is missing.]
8.1PLEASE NOTE: We must receive this information within 30 days of the date of
8.2this notice for you to protect certain rights under Minnesota law to a prompt evaluation
8.3of your request for a loan modification.
8.4 Subd. 3. Inclusions with incomplete loan modification application. The
8.5second page of this notice must be a glossary describing the nature of any missing or
8.6incomplete documents and in plain language where the documents are available and how
8.7to submit them. If the mortgagor has partially completed a form from section 584.04, any
8.8information from that form must be included on the copy sent to the mortgagor pursuant
8.9to this section, with the locations of the missing information conspicuously marked.
8.10 Subd. 4. Telephone contact attempts. The mortgagee must make three telephone
8.11contact attempts to inform the mortgagor of any deficiencies necessary to make a
8.12completed loan modification application. The first telephone contact attempt must be
8.13made within ten days of receipt of the incomplete loan modification application, and all
8.14three attempts must be completed within 15 days of the first attempt.
8.15 Sec. 6. [584.06] NOTICE OF DETERMINATION.
8.16 Subdivision 1. Determination required. The mortgagee must determine eligibility
8.17for each loan modification program for which the mortgagor may be eligible and issue a
8.18notice of determination as specified under this section within 30 days of the receipt of a
8.19completed loan modification application. The mortgagee shall comply with all guidelines
8.20and requirements of each loan modification program in connection with this determination.
8.21 Subd. 2. Loan modification offer. If the mortgagee determines that the mortgagor
8.22is eligible for a loan modification program, the mortgagee shall state the following in
8.23plain language in a written notice of the loan modification offer or offers for each loan
8.24modification program for which the mortgagor is eligible: a description of the terms of the
8.25modified loan offer; an explanation of any required timeline to respond to the offer; that the
8.26mortgagee is permitted to initiate foreclosure proceedings upon failure of the mortgagor to
8.27accept the offer; instructions regarding how the mortgagor should respond to the offer; and
8.28accurate contact information for how the mortgagor should respond to the offer.
8.29 Subd. 3. Refusal to offer loan modification. If the mortgagee determines that the
8.30mortgagor is not eligible for any loan modification program, the mortgagee shall state the
8.31following in plain language in a written notice: the timeline and procedures, if applicable,
8.32for how the mortgagor may request review of the determination; that failure to do so will
8.33free the mortgagee to initiate foreclosure proceedings; and the toll-free telephone number,
8.34address, e-mail address, and other contact information that will provide access during
8.35regular business hours to a live representative authorized to discuss the determination
9.1on behalf of the mortgagee. The timeline for the mortgagor to request a review of the
9.2determination must be at least 30 days after the date of mailing of the written notice of
9.3ineligibility and must be stated prominently in the written notice of ineligibility. The
9.4written notice of ineligibility must be accompanied by a form for the mortgagee to use in
9.5appealing the determination of ineligibility. The mortgagee may record an affidavit of
9.6compliance after making a determination in good faith that the mortgagor is ineligible for
9.7a loan modification, but the mortgagee shall not record an affidavit of compliance until at
9.8least 35 days after mailing the notice of ineligibility.
9.9 Subd. 4. General inclusions. Any notice described in this section must contain
9.10a detailed, clear description of any and all net present value (NPV) calculations used in
9.11making the determination, instructions explaining how to access the published NPV
9.12calculations contained on the mortgagee's Web site as required under section 584.03,
9.13subdivision 5, and a plain language statement that if the mortgagor believes there is an
9.14error in any element of the determination that the mortgagor has the right to contact an
9.15attorney or loan counselor for assistance. This mailing must include any and all data
9.16inputs used in the NPV calculations, which must be on a separate piece of paper.
9.17 Sec. 7. [584.07] NOTICE FOR INELIGIBLE HOMEOWNER.
9.18The mortgagee may record an affidavit of compliance if, prior to sending the loan
9.19modification notices, the mortgagee has reliable information that leads the mortgagee in
9.20good faith to conclude that the mortgagor is ineligible for any applicable loan modification
9.21program. Ten days prior to recording the affidavit of compliance, the mortgagee must
9.22send a written communication to the ineligible mortgagor. This written communication
9.23must contain a plain language statement explaining why the mortgagor is ineligible,
9.24and a toll-free telephone number, address, and e-mail address of a representative of the
9.25mortgagee that the mortgagor may contact to dispute any finding of ineligibility. The
9.26plain language statement must state that the mortgagor may contact a loan counselor or
9.27foreclosure prevention counselor for advice.
9.28 Sec. 8. [584.08] ENFORCEMENT; REMEDIES.
9.29 Subdivision 1. Private right of action. A mortgagee who fails to comply with any
9.30provision of this chapter is liable to a mortgagor for actual, incidental, and consequential
9.31damages in a private right of action and for any or all other remedies specified in this
9.32section.
9.33 Subd. 2. Statutory damages. (a) A mortgagee who violates any provision of this
9.34chapter is liable to the mortgagor for up to $2,000 for each violation.
10.1(b) De minimus violations are not subject to the statutory damages available under
10.2this subdivision.
10.3 Subd. 3. Punitive damages. (a) A mortgagor is entitled to punitive damages under
10.4paragraphs (b) and (c) and section 549.20.
10.5(b) The court may award punitive damages if the mortgagee has failed to issue
10.6a notice of determination within 30 days of the mortgagee's receipt of a completed
10.7loan modification application. There is a rebuttable presumption that all required
10.8documentation has been provided to the mortgagee for purposes of a completed loan
10.9modification application if the mortgagor can provide:
10.10(1) copies of all such required documents to the court; and either
10.11(2) proof of mortgagee's receipt of a completed loan modification application; or
10.12(3) a sworn affidavit by a HUD-approved counseling agency or substantially similar
10.13third party that those documents were sent to the mortgagee.
10.14(c) The court may award punitive damages to the mortgagor if the mortgagee did not
10.15in good faith attempt to comply with the standards, duties, prohibitions, or requirements of
10.16this chapter. Factors the court must consider in determining a lack of good faith include,
10.17but are not limited to:
10.18(1) the frequency, nature, and persistence of noncompliance;
10.19(2) a pattern of violations;
10.20(3) the extent to which the violation was reckless or intentional; or
10.21(4) a violation that results in, or substantially contributes to, the mortgagor's loss
10.22of home.
10.23 Subd. 4. Injunctive relief. The court may issue an injunction to prevent violations
10.24of this chapter and to enjoin foreclosure in violation of this chapter.
10.25 Subd. 5. Reimbursement for litigation costs. A prevailing plaintiff shall recover
10.26costs and disbursements of the action, plus reasonable attorney fees.
10.27 Subd. 6. Remedies cumulative. The remedies provided in this section are
10.28cumulative and do not restrict any remedy that is otherwise available.
10.29 Subd. 7. Public enforcement. (a) The attorney general may enforce this chapter
10.30under section 8.31.
10.31(b) The commissioner of commerce may enforce this chapter under chapter 45.
10.32 Sec. 9. [584.09] APPLICABILITY TO PRIORITY OF LOANS.
10.33A loan modification, as defined in section 584.01, does not affect the priority of the
10.34lien of the mortgage that secures the loan.
11.1 Sec. 10. EFFECTIVE DATE; APPLICABILITY.
11.2Sections 1 to 9 are effective 60 days after enactment, and apply to foreclosures of
11.3residential mortgages commenced on or after that date.
