Bill Text: MN SF70 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Mortgage foreclosure provisions modifications; military service member notice of rights requirement; lender requirement to provide a single point of contact; dual tracking system prohibition; mandatory mediation upon request by borrower requirement
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced - Dead) 2013-02-25 - Chief author added Torres Ray [SF70 Detail]
Download: Minnesota-2013-SF70-Introduced.html
1.2relating to mortgage foreclosure; requiring notice of rights of military service
1.3members; requiring the lender to provide a single point of contact; prohibiting a
1.4mortgage lender from beginning or continuing a foreclosure proceeding while
1.5considering a request by a borrower for a mortgage modification; requiring that
1.6the mortgage lender participate in and pay for mediation if the borrower requests
1.7mediation;amending Minnesota Statutes 2012, sections 580.03; 580.041,
1.8subdivisions 1b, 2; proposing coding for new law in Minnesota Statutes, chapter
1.9580.
1.10BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.11 Section 1. Minnesota Statutes 2012, section 580.03, is amended to read:
1.12580.03 NOTICE OF SALE; SERVICE ON OCCUPANT.
1.13 Six weeks' published notice shall be given that such mortgage will be foreclosed by
1.14sale of the mortgaged premises or some part thereof, and at least four weeks before the
1.15appointed time of sale a copy of such notice shall be served in like manner as a summons
1.16in a civil action in the district court upon the person in possession of the mortgaged
1.17premises, if the same are actually occupied. If there be a building on such premises used
1.18by a church or religious corporation, for its usual meetings, service upon any officer or
1.19trustee of such corporation shall be a sufficient service upon it. The notices required
1.20by sections580.041 and
580.042 must be served simultaneously with the notice of
1.21foreclosure required by this section.
1.22The notice required under this section may not be published or served upon the
1.23person in possession of the mortgaged property until 15 days after the mortgage lender has
1.24sent the borrower a statement that if the borrower is a service member, or a dependent of
1.25a service member, the borrower may be entitled to certain protections under the federal
1.26Servicemembers Civil Relief Act, United States Code, title 50, section 501, regarding the
2.1service member's interest rate and the risk of foreclosure, and counseling for covered
2.2service members that is available at agencies such as Military OneSource and Armed
2.3Forces Legal Assistance.
2.4EFFECTIVE DATE.This section is effective August 1, 2013, and applies to
2.5foreclosures commenced on or after that date.
2.6 Sec. 2. Minnesota Statutes 2012, section 580.041, subdivision 1b, is amended to read:
2.7 Subd. 1b. Form and delivery of foreclosure advice notice. The foreclosure advice
2.8notice required by this section must be in 14-point boldface type and must be printed on
2.9colored paper that is other than the color of the notice of foreclosure required by sections
2.10580.03
and
580.04 and the notice of redemption rights required by this section, and that
2.11does not obscure or overshadow the content of the notice. The title of the notice must
2.12be in 20-point boldface type. The notice must be on its own page. The foreclosure
2.13advice notice required by this section must be delivered with the notice of foreclosure
2.14required by sections580.03 and
580.04 . The foreclosure advice notice required by this
2.15section also must be delivered with each subsequent written communication regarding the
2.16foreclosure mailed to the mortgagor by the foreclosing party up to the day of redemption.
2.17A foreclosing mortgagee will be deemed to have complied with this section if it sends
2.18the foreclosure advice notice required by this section at least once every 60 days during
2.19the period of the foreclosure process. The foreclosure advice notice required by this
2.20section must not be published.
2.21The foreclosure advice notice must provide the homeowner with a single point
2.22of contact with the lender, consisting of an employee or department of the lender, that
2.23must be specified in the foreclosure advice notice. The point of contact must have the
2.24authority to perform specific relevant responsibilities, know the borrower's situation and
2.25current status, provide accurate information to the borrower, and coordinate all documents
2.26associated with the borrower's foreclosure prevention alternatives.
2.27EFFECTIVE DATE.This section is effective August 1, 2013, and applies to
2.28foreclosures commenced on or after that date.
2.29 Sec. 3. Minnesota Statutes 2012, section 580.041, subdivision 2, is amended to read:
2.30 Subd. 2. Content of foreclosure advice notice. The foreclosure advice notice
2.31required by this section must appear substantially as follows:
3.8AS OF [insert date], this lender says that you owe $[insert dollar amount] to bring
3.9your mortgage up to date (or "reinstate" your mortgage). You must pay this amount,
3.10plus interest and other costs, to keep your house from going through a sheriff's sale.
3.11The sheriff's sale is scheduled for [insert date] at [insert time] at [insert place].
3.12Mortgage foreclosure is a complex process. People may contact you with advice and
3.13offers to help "save" your home.
3.14Remember: It is important that you learn as much as you can about foreclosure and
3.15your situation. Find out about all your options before you make any agreements with
3.16anyone about the foreclosure of your home.
3.17Getting Help
3.18As soon as possible, you should contact your lender at the above number to talk
3.19about things you might be able to do to prevent foreclosure. You should also
3.20consider contacting the foreclosure prevention counselor in your area. A foreclosure
3.21prevention counselor can answer your questions, offer free advice, and help you
3.22create a plan which makes sense for your situation.
3.23Contact the Minnesota Home Ownership Center at 651-659-9336 or 866-462-6466
3.24or www.hocmn.org or contact the United States Department of Housing and Urban
3.25Development at 1-800-569-4287 or www.hud.gov to get the phone number and
3.26location of the nearest certified counseling organization. Call today. The longer you
3.27wait, the fewer options you may have for a desirable result."
3.28EFFECTIVE DATE.This section is effective August 1, 2013, and applies to
3.29foreclosures commenced on or after that date.
3.30 Sec. 4. [580.043] MORTGAGE FORECLOSURE DUAL TRACKING
3.31PROHIBITED.
3.32 Subdivision 1. Definitions. (a) For purposes of this section, the terms defined
3.33in this section have the meanings given.
3.34(b) "Dual tracking" means a lender beginning or continuing a mortgage foreclosure
3.35under this chapter while the lender is considering a request by the borrower for a
3.36modification of the mortgage loan.
4.1(c) "Mortgage lender" means an entity that is responsible for interacting with
4.2the borrower, including managing the loan account on a daily basis, such as collecting
4.3and crediting periodic loan payments, managing an escrow account, or enforcing the
4.4promissory note and mortgage, either as the current owner of the promissory note or
4.5as the current owner's authorized agent.
4.6(d) "Borrower" means the individual or entity that is liable on the promissory note
4.7secured by the mortgage, except that the term does not include:
4.8(1) a person who has surrendered the mortgaged property, as evidenced by either a
4.9letter or other written notice confirming the surrender or by delivery of the keys to the
4.10property to the mortgage lender or authorized agent; or
4.11(2) a person who has filed a bankruptcy case under United States Code, title 11,
4.12chapter 7, 11, 12, or 13, and the bankruptcy court has not entered an order closing or
4.13dismissing the bankruptcy case or granting relief from a stay of foreclosure.
4.14(e) "Loan modification request" means a written request from a borrower to the
4.15borrower's mortgage lender for a modification of the borrower's mortgage loan in order
4.16to prevent an anticipated foreclosure or to suspend or terminate a foreclosure that is in
4.17progress.
4.18(f) "Complete loan modification request" means a loan modification request that
4.19contains all information required by the mortgage lender to determine eligibility for a
4.20loan modification.
4.21 Subd. 2. Applicability. This section applies to mortgage foreclosures on the basis
4.22specified in section 580.041, subdivision 1a.
4.23 Subd. 3. Prohibition; dual tracking; continuation or commencement of
4.24foreclosure after receipt of loan modification request. (a) Upon receipt by a mortgage
4.25lender of a loan modification request from a borrower regarding a mortgage loan for
4.26which the mortgage lender is responsible, the mortgage lender shall defer beginning a
4.27foreclosure for 60 days or, if a foreclosure of the mortgage loan is in progress, stop the
4.28foreclosure process for 60 days or until the mortgage lender and borrower have agreed
4.29upon and entered into a loan modification, whichever comes first.
4.30(b) A mortgage lender need not consider a loan modification request if:
4.31(1) the lender has already received, considered, and either accepted or denied a loan
4.32modification request on the same loan within the immediately preceding 12 months; or
4.33(2) the loan modification request is not a complete loan modification request as
4.34defined in subdivision 1, paragraph (f).
4.35 Subd. 4. Civil cause of action; dual tracking. A borrower who incurs loss as a
4.36result of dual tracking by the borrower's mortgage lender has a civil cause of action against
5.1the mortgage lender for damage incurred by the borrower as a result of the dual tracking,
5.2plus the borrower's reasonable attorney fees.
5.3EFFECTIVE DATE.This section is effective August 1, 2013, and applies to
5.4foreclosures commenced on or after that date.
5.5 Sec. 5. [580.0431] MANDATORY MEDIATION IF REQUESTED BY
5.6BORROWER.
5.7(a) If a borrower, as defined in section 580.043, subdivision 1, paragraph (d), requests
5.8in writing that the mortgage lender participate with the borrower in mandatory mediation,
5.9the mortgage lender shall participate in good faith and shall pay the cost of the mediation.
5.10(b) Prior to the mandatory mediation, the borrower must receive the foreclosure
5.11prevention counseling described in section 580.041, subdivisions 2 and 2a.
5.12EFFECTIVE DATE.This section is effective August 1, 2013, and applies to
5.13foreclosures commenced on or after that date.
1.3members; requiring the lender to provide a single point of contact; prohibiting a
1.4mortgage lender from beginning or continuing a foreclosure proceeding while
1.5considering a request by a borrower for a mortgage modification; requiring that
1.6the mortgage lender participate in and pay for mediation if the borrower requests
1.7mediation;amending Minnesota Statutes 2012, sections 580.03; 580.041,
1.8subdivisions 1b, 2; proposing coding for new law in Minnesota Statutes, chapter
1.9580.
1.10BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.11 Section 1. Minnesota Statutes 2012, section 580.03, is amended to read:
1.12580.03 NOTICE OF SALE; SERVICE ON OCCUPANT.
1.13 Six weeks' published notice shall be given that such mortgage will be foreclosed by
1.14sale of the mortgaged premises or some part thereof, and at least four weeks before the
1.15appointed time of sale a copy of such notice shall be served in like manner as a summons
1.16in a civil action in the district court upon the person in possession of the mortgaged
1.17premises, if the same are actually occupied. If there be a building on such premises used
1.18by a church or religious corporation, for its usual meetings, service upon any officer or
1.19trustee of such corporation shall be a sufficient service upon it. The notices required
1.20by sections
1.21foreclosure required by this section.
1.22The notice required under this section may not be published or served upon the
1.23person in possession of the mortgaged property until 15 days after the mortgage lender has
1.24sent the borrower a statement that if the borrower is a service member, or a dependent of
1.25a service member, the borrower may be entitled to certain protections under the federal
1.26Servicemembers Civil Relief Act, United States Code, title 50, section 501, regarding the
2.1service member's interest rate and the risk of foreclosure, and counseling for covered
2.2service members that is available at agencies such as Military OneSource and Armed
2.3Forces Legal Assistance.
2.4EFFECTIVE DATE.This section is effective August 1, 2013, and applies to
2.5foreclosures commenced on or after that date.
2.6 Sec. 2. Minnesota Statutes 2012, section 580.041, subdivision 1b, is amended to read:
2.7 Subd. 1b. Form and delivery of foreclosure advice notice. The foreclosure advice
2.8notice required by this section must be in 14-point boldface type and must be printed on
2.9colored paper that is other than the color of the notice of foreclosure required by sections
2.11does not obscure or overshadow the content of the notice. The title of the notice must
2.12be in 20-point boldface type. The notice must be on its own page. The foreclosure
2.13advice notice required by this section must be delivered with the notice of foreclosure
2.14required by sections
2.15section also must be delivered with each subsequent written communication regarding the
2.16foreclosure mailed to the mortgagor by the foreclosing party up to the day of redemption.
2.17A foreclosing mortgagee will be deemed to have complied with this section if it sends
2.18the foreclosure advice notice required by this section at least once every 60 days during
2.19the period of the foreclosure process. The foreclosure advice notice required by this
2.20section must not be published.
2.21The foreclosure advice notice must provide the homeowner with a single point
2.22of contact with the lender, consisting of an employee or department of the lender, that
2.23must be specified in the foreclosure advice notice. The point of contact must have the
2.24authority to perform specific relevant responsibilities, know the borrower's situation and
2.25current status, provide accurate information to the borrower, and coordinate all documents
2.26associated with the borrower's foreclosure prevention alternatives.
2.27EFFECTIVE DATE.This section is effective August 1, 2013, and applies to
2.28foreclosures commenced on or after that date.
2.29 Sec. 3. Minnesota Statutes 2012, section 580.041, subdivision 2, is amended to read:
2.30 Subd. 2. Content of foreclosure advice notice. The foreclosure advice notice
2.31required by this section must appear substantially as follows:
3.8AS OF [insert date], this lender says that you owe $[insert dollar amount] to bring
3.9your mortgage up to date (or "reinstate" your mortgage). You must pay this amount,
3.10plus interest and other costs, to keep your house from going through a sheriff's sale.
3.11The sheriff's sale is scheduled for [insert date] at [insert time] at [insert place].
3.12Mortgage foreclosure is a complex process. People may contact you with advice and
3.13offers to help "save" your home.
3.14Remember: It is important that you learn as much as you can about foreclosure and
3.15your situation. Find out about all your options before you make any agreements with
3.16anyone about the foreclosure of your home.
3.17Getting Help
3.18As soon as possible, you should contact your lender at the above number to talk
3.19about things you might be able to do to prevent foreclosure. You should also
3.20consider contacting the foreclosure prevention counselor in your area. A foreclosure
3.21prevention counselor can answer your questions, offer free advice, and help you
3.22create a plan which makes sense for your situation.
3.23Contact the Minnesota Home Ownership Center at 651-659-9336 or 866-462-6466
3.24or www.hocmn.org or contact the United States Department of Housing and Urban
3.25Development at 1-800-569-4287 or www.hud.gov to get the phone number and
3.26location of the nearest certified counseling organization. Call today. The longer you
3.27wait, the fewer options you may have for a desirable result."
3.28EFFECTIVE DATE.This section is effective August 1, 2013, and applies to
3.29foreclosures commenced on or after that date.
3.30 Sec. 4. [580.043] MORTGAGE FORECLOSURE DUAL TRACKING
3.31PROHIBITED.
3.32 Subdivision 1. Definitions. (a) For purposes of this section, the terms defined
3.33in this section have the meanings given.
3.34(b) "Dual tracking" means a lender beginning or continuing a mortgage foreclosure
3.35under this chapter while the lender is considering a request by the borrower for a
3.36modification of the mortgage loan.
4.1(c) "Mortgage lender" means an entity that is responsible for interacting with
4.2the borrower, including managing the loan account on a daily basis, such as collecting
4.3and crediting periodic loan payments, managing an escrow account, or enforcing the
4.4promissory note and mortgage, either as the current owner of the promissory note or
4.5as the current owner's authorized agent.
4.6(d) "Borrower" means the individual or entity that is liable on the promissory note
4.7secured by the mortgage, except that the term does not include:
4.8(1) a person who has surrendered the mortgaged property, as evidenced by either a
4.9letter or other written notice confirming the surrender or by delivery of the keys to the
4.10property to the mortgage lender or authorized agent; or
4.11(2) a person who has filed a bankruptcy case under United States Code, title 11,
4.12chapter 7, 11, 12, or 13, and the bankruptcy court has not entered an order closing or
4.13dismissing the bankruptcy case or granting relief from a stay of foreclosure.
4.14(e) "Loan modification request" means a written request from a borrower to the
4.15borrower's mortgage lender for a modification of the borrower's mortgage loan in order
4.16to prevent an anticipated foreclosure or to suspend or terminate a foreclosure that is in
4.17progress.
4.18(f) "Complete loan modification request" means a loan modification request that
4.19contains all information required by the mortgage lender to determine eligibility for a
4.20loan modification.
4.21 Subd. 2. Applicability. This section applies to mortgage foreclosures on the basis
4.22specified in section 580.041, subdivision 1a.
4.23 Subd. 3. Prohibition; dual tracking; continuation or commencement of
4.24foreclosure after receipt of loan modification request. (a) Upon receipt by a mortgage
4.25lender of a loan modification request from a borrower regarding a mortgage loan for
4.26which the mortgage lender is responsible, the mortgage lender shall defer beginning a
4.27foreclosure for 60 days or, if a foreclosure of the mortgage loan is in progress, stop the
4.28foreclosure process for 60 days or until the mortgage lender and borrower have agreed
4.29upon and entered into a loan modification, whichever comes first.
4.30(b) A mortgage lender need not consider a loan modification request if:
4.31(1) the lender has already received, considered, and either accepted or denied a loan
4.32modification request on the same loan within the immediately preceding 12 months; or
4.33(2) the loan modification request is not a complete loan modification request as
4.34defined in subdivision 1, paragraph (f).
4.35 Subd. 4. Civil cause of action; dual tracking. A borrower who incurs loss as a
4.36result of dual tracking by the borrower's mortgage lender has a civil cause of action against
5.1the mortgage lender for damage incurred by the borrower as a result of the dual tracking,
5.2plus the borrower's reasonable attorney fees.
5.3EFFECTIVE DATE.This section is effective August 1, 2013, and applies to
5.4foreclosures commenced on or after that date.
5.5 Sec. 5. [580.0431] MANDATORY MEDIATION IF REQUESTED BY
5.6BORROWER.
5.7(a) If a borrower, as defined in section 580.043, subdivision 1, paragraph (d), requests
5.8in writing that the mortgage lender participate with the borrower in mandatory mediation,
5.9the mortgage lender shall participate in good faith and shall pay the cost of the mediation.
5.10(b) Prior to the mandatory mediation, the borrower must receive the foreclosure
5.11prevention counseling described in section 580.041, subdivisions 2 and 2a.
5.12EFFECTIVE DATE.This section is effective August 1, 2013, and applies to
5.13foreclosures commenced on or after that date.
