How Do New Minnesota Foreclosures Laws Affect Lenders And Cities
On June 15, 2009, the rules on Minnesota foreclosures were changed. Today, homeowners looking down the barrel of a sale forced by the lender after the homeowner has fallen into arrears on their mortgage payments have the option of postponing the date of sale by five months. Before the changes it was only the lender who had the ability to set the forced sale to a later date.
The length of the foreclosure process in unaffected by a homeowner obtaining a postponement. The redemption period, which allows a mortgagee to avoid forced personal bankruptcy by making good on the outstanding balance due on the mortgage after it has been sold. To keep the foreclosure process from dragging out, the redemption period for homeowners who get a postponement has been lowered to 35 days from the six months that is allowed in cases where no postponement is requested,
Homeowners may only seek a postponement once. Even if the homeowner brings the mortgage up to date and keeps it up to date for an extended period, should they fall in arrears at some later date the option of postponing a forced date of sale is no longer available to them.
Fortunately, this new wrinkle in the Minnesota foreclosures process does not necessitate additional paperwork for the lender. The usual steps that are required of the party that is foreclosing are still valid. The date of sale that must be published does not have to be published again with the new sale date nor does the notice of sale have to be filed or served a second time.
Lenders do have additional duties under newly revised Minnesota foreclosure laws in the case of abandoned properties. It use to be that when a property was abandoned it was optional for lenders to take steps to inspect the property, protect it from the elements and secure it from trespass. These option activities have been made mandatory and can be ordered by city officials. Additional maintenance minimums have also been established.
The issuance of a certificate of sale by a duly designated sheriff and any additional evidence required by a court to find that a property is, in fact, abandoned is required before these new requirements come into affect. The new requirements include changing the locks or installing locks on all windows and exterior doors. Alternatively, the lender may simply board up the building. Alarm systems may also be installed.
Monies put out by the lender to fulfill these obligations may be added to the principal the homeowner owes on the mortgage. If new locks are put in, keys to the locks must be given to the titular homeowner, if they can be found. The chance of recovering these costs are, of course, small, given that personal bankruptcy on the part of the homeowner is the most likely result of a completed residential foreclosure.
The revised Minnesota foreclosures regulations give cities considerable power in regards to abandoned residences. In the extreme. Cities may apply to have a redemption period reduces so as to allow municipal employees and work crews to gain access to effect needed work.
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