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HF1027 (Legislative Session 94 (2025-2026))

Mortgage foreclosure redemption and surpluses provided.

Related bill: SF2338

AI Generated Summary

Purpose of the Bill

This bill aims to amend current Minnesota laws regarding mortgage foreclosure, redemption processes, and the handling of surplus funds following a foreclosure sale. The goal is to clarify the rights and procedures for various stakeholders involved in foreclosures, including tenants, creditors, and property owners.

Main Provisions

  • Taxes Paid by Tenants:

    • Occupants or tenants who pay delinquent taxes that should have been paid by property owners can place a lien on the property for the paid amount. They must file a notice with the county recorder or registrar of titles to initiate this lien.

  • Handling of Surplus from Foreclosure Sale:

    • Surplus funds from a foreclosure sale, if over $100, are to be held by the sheriff during the redemption period. The funds should first go to junior creditors with liens, and any remaining surplus to the property's owner.
    • If the surplus is less than $100, it can be paid directly to the owner.
    • In the case of multiple claims to the surplus, the sheriff may involve the court to decide the rightful claimant.

  • Satisfaction of Debt:

    • The proceeds from the foreclosure sale satisfy the mortgage debt unless specific exceptions are applied.

  • Creditor Redemption:

    • Creditors can redeem the foreclosed property if no redemption is made by the property owner, within a revised redemption period of 14 days, as opposed to the original seven days.
    • The bill outlines specific documentation and notification requirements for creditors to exercise redemption rights.

Significant Changes to Existing Law

  • Extends the redemption period for creditors from seven to 14 days.
  • Establishes more detailed procedures for notifying property owners of surplus funds and clarifies the prioritization for distributing these surpluses among creditors.
  • Introduces mechanisms for resolving disputes regarding redemption rights and surplus fund claims through court involvement.

Relevant Terms

real property, mortgage foreclosure, redemption, surplus funds, lien, tenant rights, mortgage debt satisfaction, junior creditors, sheriff's sale, Minnesota Homeownership Center.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
April 21, 2025SenateFloorActionReceived from House
April 21, 2025SenateFloorActionReceived from House
February 16, 2025HouseFloorActionIntroduction and first reading, referred toJudiciary Finance and Civil Law
February 16, 2025HouseFloorActionIntroduction and first reading, referred toJudiciary Finance and Civil Law
February 23, 2025HouseFloorActionAuthor added
April 21, 2025SenateFloorActionIntroduction and first reading
February 23, 2025HouseFloorActionAuthor added
April 21, 2025SenateFloorActionIntroduction and first reading
March 31, 2025HouseFloorActionCommittee report, to adopt as amended
April 21, 2025SenateFloorActionReferred toJudiciary and Public Safety
March 31, 2025HouseFloorActionSecond reading
April 09, 2025HouseFloorActionHouse rule 1.21, placed on Calendar for the Day
April 09, 2025HouseFloorActionThird reading
April 09, 2025HouseFloorActionBill was passed

Citations

 
[
  {
    "analysis": {
      "added": [
        "Clarifies the process by which a lien is established and recorded when a tenant pays delinquent taxes."
      ],
      "removed": [],
      "summary": "This section addresses tax payments made by tenants or other persons and how these payments can become a lien on the property.",
      "modified": [
        "Adjusts the interest rate applicable to repaid tax amounts to 12 percent per annum."
      ]
    },
    "citation": "272.45",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "Established a procedure for sheriffs to notify owners of surplus funds after a sale."
      ],
      "removed": [],
      "summary": "This section regulates the handling of surplus funds after a mortgage foreclosure sale.",
      "modified": [
        "Clarifies conditions under which surplus funds can be claimed and released."
      ]
    },
    "citation": "580.10",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This section provides that foreclosure sale proceeds fully satisfy the mortgage unless otherwise stated.",
      "modified": [
        "Clarifies the exception related to full satisfaction of mortgage debt regarding certain conditions."
      ]
    },
    "citation": "580.225",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "Provides a structured timeline for creditors to redeem the foreclosed property."
      ],
      "removed": [
        "Old redemption timelines that conflicted with the newly established structure."
      ],
      "summary": "This section details the redemption process for creditors following a mortgage foreclosure.",
      "modified": [
        "Extends the redemption period from seven to fourteen days and specifies the calculation of redemption amounts."
      ]
    },
    "citation": "580.24",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill discusses the general provisions for mortgage foreclosure and redemption regarding surplus handling.",
      "modified": [
        "Splits existing provisions into two subdivisions and modifies language for surplus handling accuracy."
      ]
    },
    "citation": "582.03",
    "subdivision": "subdivisions 1 and 2"
  }
]

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