Bill Text: MN SF2000 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Foreclosure consultants provisions modification
Spectrum: Bipartisan Bill
Status: (Engrossed - Dead) 2012-03-30 - Second reading [SF2000 Detail]
Download: Minnesota-2011-SF2000-Introduced.html
1.2relating to mortgages; modifying provisions relating to foreclosure consultants;
1.3amending Minnesota Statutes 2010, section 325N.01.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. Minnesota Statutes 2010, section 325N.01, is amended to read:
1.6325N.01 DEFINITIONS.
1.7The definitions in paragraphs (a) to (h) apply to sections325N.01 to
325N.09 .
1.8(a) "Foreclosure consultant" means any person who, directly or indirectly, makes
1.9any solicitation, representation, or offer to any owner to perform for compensation or
1.10who, for compensation, performs any service which the person in any manner represents
1.11will in any manner do any of the following:
1.12(1) stop or postpone the foreclosure sale;
1.13(2) obtain any forbearance from any beneficiary or mortgagee;
1.14(3) assist the owner to exercise the right of reinstatement provided in section580.30 ;
1.15(4) obtain any extension of the period within which the owner may reinstate the
1.16owner's obligation;
1.17(5) obtain any waiver of an acceleration clause contained in any promissory note or
1.18contract secured by a mortgage on a residence in foreclosure or contained in the mortgage;
1.19(6) assist the owner in foreclosure or loan default to obtain a loan or advance
1.20of funds;
1.21(7) avoid or ameliorate the impairment of the owner's credit resulting from the
1.22recording of a notice of default or the conduct of a foreclosure sale;
1.23(8) save the owner's residence from foreclosure; or
2.1(9) negotiate or modify the terms or conditions of an existing residential mortgage
2.2loan.
2.3(b) A foreclosure consultant does not include any of the following:
2.4(1) a person licensed to practice law in this state when the person renders service in
2.5the course of the person's practice as an attorney-at-law;
2.6(2) a person licensed as a debt management services provider under chapter 332A,
2.7when the person is acting as a debt management services provider as defined in that
2.8chapter;
2.9(3) a person licensed as a real estate broker or salesperson under chapter 82 when the
2.10person engages in acts whose performance requires licensure under that chapter unless the
2.11person is engaged in offering services designed to, or purportedly designed to, enable the
2.12owner to retain possession of the residence in foreclosure;
2.13(4) a person licensed as an accountant under chapter 326A when the person is acting
2.14in any capacity for which the person is licensed under those provisions;
2.15(5) a person or the person's authorized agent acting under the express authority
2.16or written approval of the Department of Housing and Urban Development or other
2.17department or agency of the United States or this state to provide services;
2.18(6) a person who holds or is owed an obligation secured by a lien on any residence
2.19in foreclosure when the person performs services in connection with this obligation or lien
2.20if the obligation or lien did not arise as the result of or as part of a proposed foreclosure
2.21reconveyance;
2.22(7) any person or entity doing business under any law of this state, or of the United
2.23States relating to banks, trust companies, savings and loan associations, industrial loan and
2.24thrift companies, regulated lenders, credit unions, insurance companies, or a mortgagee
2.25which is a United States Department of Housing and Urban Development approved
2.26mortgagee and any subsidiary or affiliate of these persons or entities, and any agent or
2.27employee of these persons or entities while engaged in the business of these persons
2.28or entities;
2.29(8) a person licensed as a residential mortgage originator or servicer pursuant to
2.30chapter 58, when acting under the authority of that license, except that all the provisions
2.31ofsection
325N.04, clause (1), sections 325N.01 to 325N.09, shall apply to any person
2.32operating under a mortgage originator license who negotiates or offers to negotiate the
2.33terms or conditions of an existing residential mortgage loan;
2.34(9) a nonprofit agency or organization that has tax-exempt status under section
2.35501(c)(3) of the Internal Revenue Code that offers counseling or advice to an owner of
2.36a home in foreclosure or loan default if they do not contract for services with for-profit
3.1lenders or foreclosure purchasers, except that they shall comply with the provisions of
3.2section325N.04 , clause (1);
3.3(10) a judgment creditor of the owner, to the extent that the judgment creditor's claim
3.4accrued prior to the personal service of the foreclosure notice required by section580.03 ,
3.5but excluding a person who purchased the claim after such personal service; and
3.6(11) a foreclosure purchaser as defined in section325N.10 .
3.7(c) "Foreclosure reconveyance" means a transaction involving:
3.8(1) the transfer of title to real property by a foreclosed homeowner during a
3.9foreclosure proceeding, either by transfer of interest from the foreclosed homeowner or
3.10by creation of a mortgage or other lien or encumbrance during the foreclosure process
3.11that allows the acquirer to obtain title to the property by redeeming the property as
3.12a junior lienholder; and
3.13(2) the subsequent conveyance, or promise of a subsequent conveyance, of an interest
3.14back to the foreclosed homeowner by the acquirer or a person acting in participation with
3.15the acquirer that allows the foreclosed homeowner to possess either the residence in
3.16foreclosure or any other real property, which interest includes, but is not limited to, an
3.17interest in a contract for deed, purchase agreement, option to purchase, or lease.
3.18(d) "Person" means any individual, partnership, corporation, limited liability
3.19company, association, or other group, however organized.
3.20(e) "Service" means and includes, but is not limited to, any of the following:
3.21(1) debt, budget, or financial counseling of any type;
3.22(2) receiving money for the purpose of distributing it to creditors in payment or
3.23partial payment of any obligation secured by a lien on a residence in foreclosure;
3.24(3) contacting creditors or servicers to negotiate or offer to negotiate the terms or
3.25conditions of an existing residential mortgage loan;
3.26(4) arranging or attempting to arrange for an extension of the period within which
3.27the owner of a residence in foreclosure may cure the owner's default and reinstate the
3.28owner's obligation pursuant to section580.30 ;
3.29(5) arranging or attempting to arrange for any delay or postponement of the time of
3.30sale of the residence in foreclosure;
3.31(6) advising the filing of any document or assisting in any manner in the preparation
3.32of any document for filing with any bankruptcy court; or
3.33(7) giving any advice, explanation, or instruction to an owner of a residence in
3.34foreclosure, which in any manner relates to the cure of a default in or the reinstatement
3.35of an obligation secured by a lien on the residence in foreclosure, the full satisfaction of
4.1that obligation, or the postponement or avoidance of a sale of a residence in foreclosure,
4.2pursuant to a power of sale contained in any mortgage.
4.3(f) "Residence in foreclosure" means residential real property consisting of one to
4.4four family dwelling units, one of which the owner occupies as the owner's principal place
4.5of residence, where there is a delinquency or default on any loan payment or debt secured
4.6by or attached to the residential real property including, but not limited to, contract for
4.7deed payments.
4.8(g) "Owner" means the record owner of the residential real property in foreclosure at
4.9the time the notice of pendency was recorded, or the summons and complaint served.
4.10(h) "Contract" means any agreement, or any term in any agreement, between
4.11a foreclosure consultant and an owner for the rendition of any service as defined in
4.12paragraph (e).
1.3amending Minnesota Statutes 2010, section 325N.01.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. Minnesota Statutes 2010, section 325N.01, is amended to read:
1.6325N.01 DEFINITIONS.
1.7The definitions in paragraphs (a) to (h) apply to sections
1.8(a) "Foreclosure consultant" means any person who, directly or indirectly, makes
1.9any solicitation, representation, or offer to any owner to perform for compensation or
1.10who, for compensation, performs any service which the person in any manner represents
1.11will in any manner do any of the following:
1.12(1) stop or postpone the foreclosure sale;
1.13(2) obtain any forbearance from any beneficiary or mortgagee;
1.14(3) assist the owner to exercise the right of reinstatement provided in section
1.15(4) obtain any extension of the period within which the owner may reinstate the
1.16owner's obligation;
1.17(5) obtain any waiver of an acceleration clause contained in any promissory note or
1.18contract secured by a mortgage on a residence in foreclosure or contained in the mortgage;
1.19(6) assist the owner in foreclosure or loan default to obtain a loan or advance
1.20of funds;
1.21(7) avoid or ameliorate the impairment of the owner's credit resulting from the
1.22recording of a notice of default or the conduct of a foreclosure sale;
1.23(8) save the owner's residence from foreclosure; or
2.1(9) negotiate or modify the terms or conditions of an existing residential mortgage
2.2loan.
2.3(b) A foreclosure consultant does not include any of the following:
2.4(1) a person licensed to practice law in this state when the person renders service in
2.5the course of the person's practice as an attorney-at-law;
2.6(2) a person licensed as a debt management services provider under chapter 332A,
2.7when the person is acting as a debt management services provider as defined in that
2.8chapter;
2.9(3) a person licensed as a real estate broker or salesperson under chapter 82 when the
2.10person engages in acts whose performance requires licensure under that chapter unless the
2.11person is engaged in offering services designed to, or purportedly designed to, enable the
2.12owner to retain possession of the residence in foreclosure;
2.13(4) a person licensed as an accountant under chapter 326A when the person is acting
2.14in any capacity for which the person is licensed under those provisions;
2.15(5) a person or the person's authorized agent acting under the express authority
2.16or written approval of the Department of Housing and Urban Development or other
2.17department or agency of the United States or this state to provide services;
2.18(6) a person who holds or is owed an obligation secured by a lien on any residence
2.19in foreclosure when the person performs services in connection with this obligation or lien
2.20if the obligation or lien did not arise as the result of or as part of a proposed foreclosure
2.21reconveyance;
2.22(7) any person or entity doing business under any law of this state, or of the United
2.23States relating to banks, trust companies, savings and loan associations, industrial loan and
2.24thrift companies, regulated lenders, credit unions, insurance companies, or a mortgagee
2.25which is a United States Department of Housing and Urban Development approved
2.26mortgagee and any subsidiary or affiliate of these persons or entities, and any agent or
2.27employee of these persons or entities while engaged in the business of these persons
2.28or entities;
2.29(8) a person licensed as a residential mortgage originator or servicer pursuant to
2.30chapter 58, when acting under the authority of that license, except that all the provisions
2.31of
2.32operating under a mortgage originator license who negotiates or offers to negotiate the
2.33terms or conditions of an existing residential mortgage loan;
2.34(9) a nonprofit agency or organization that has tax-exempt status under section
2.35501(c)(3) of the Internal Revenue Code that offers counseling or advice to an owner of
2.36a home in foreclosure or loan default if they do not contract for services with for-profit
3.1lenders or foreclosure purchasers, except that they shall comply with the provisions of
3.2section
3.3(10) a judgment creditor of the owner, to the extent that the judgment creditor's claim
3.4accrued prior to the personal service of the foreclosure notice required by section
3.5but excluding a person who purchased the claim after such personal service; and
3.6(11) a foreclosure purchaser as defined in section
3.7(c) "Foreclosure reconveyance" means a transaction involving:
3.8(1) the transfer of title to real property by a foreclosed homeowner during a
3.9foreclosure proceeding, either by transfer of interest from the foreclosed homeowner or
3.10by creation of a mortgage or other lien or encumbrance during the foreclosure process
3.11that allows the acquirer to obtain title to the property by redeeming the property as
3.12a junior lienholder; and
3.13(2) the subsequent conveyance, or promise of a subsequent conveyance, of an interest
3.14back to the foreclosed homeowner by the acquirer or a person acting in participation with
3.15the acquirer that allows the foreclosed homeowner to possess either the residence in
3.16foreclosure or any other real property, which interest includes, but is not limited to, an
3.17interest in a contract for deed, purchase agreement, option to purchase, or lease.
3.18(d) "Person" means any individual, partnership, corporation, limited liability
3.19company, association, or other group, however organized.
3.20(e) "Service" means and includes, but is not limited to, any of the following:
3.21(1) debt, budget, or financial counseling of any type;
3.22(2) receiving money for the purpose of distributing it to creditors in payment or
3.23partial payment of any obligation secured by a lien on a residence in foreclosure;
3.24(3) contacting creditors or servicers to negotiate or offer to negotiate the terms or
3.25conditions of an existing residential mortgage loan;
3.26(4) arranging or attempting to arrange for an extension of the period within which
3.27the owner of a residence in foreclosure may cure the owner's default and reinstate the
3.28owner's obligation pursuant to section
3.29(5) arranging or attempting to arrange for any delay or postponement of the time of
3.30sale of the residence in foreclosure;
3.31(6) advising the filing of any document or assisting in any manner in the preparation
3.32of any document for filing with any bankruptcy court; or
3.33(7) giving any advice, explanation, or instruction to an owner of a residence in
3.34foreclosure, which in any manner relates to the cure of a default in or the reinstatement
3.35of an obligation secured by a lien on the residence in foreclosure, the full satisfaction of
4.1that obligation, or the postponement or avoidance of a sale of a residence in foreclosure,
4.2pursuant to a power of sale contained in any mortgage.
4.3(f) "Residence in foreclosure" means residential real property consisting of one to
4.4four family dwelling units, one of which the owner occupies as the owner's principal place
4.5of residence, where there is a delinquency or default on any loan payment or debt secured
4.6by or attached to the residential real property including, but not limited to, contract for
4.7deed payments.
4.8(g) "Owner" means the record owner of the residential real property in foreclosure at
4.9the time the notice of pendency was recorded, or the summons and complaint served.
4.10(h) "Contract" means any agreement, or any term in any agreement, between
4.11a foreclosure consultant and an owner for the rendition of any service as defined in
4.12paragraph (e).
