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HF1027 (Legislative Session 94 (2025-2026))

Mortgage foreclosure redemption and surpluses provided.

Related bill: SF2338

AI Generated Summary

House File No. 1027 is a proposed piece of legislation aimed at modifying the current laws related to real property, specifically focusing on mortgages, foreclosures, liens, and the rights associated with them in Minnesota. The bill suggests several amendments to statues regarding the treatment of surplus money in foreclosures, the rights of tenants who pay delinquent taxes, and the procedure for creditors to redeem a property after foreclosure. Here’s a simplified overview of the key changes proposed:

  1. Tax Lien Rights for Tax-Paying Occupants: If a tenant or other occupant pays delinquent taxes on a property, they can file a notice and create a lien against the property for the amount paid, securing their right to reclaim this amount.

  2. Handling of Surplus Funds Post-Foreclosure:

    • Authorities' Responsibilities: After a property is sold in foreclosure and all debts satisfied, any remaining surplus must be handled carefully. The sheriff is required to notify the owner if a surplus exists and provide information on how they might claim these funds.
    • Claiming Surplus: The original owner or junior creditors can claim this surplus during the redemption period, or the funds can be applied to other owed amounts as specified by a court.
    • Small Surplus: If the surplus is less than $100, it can be directly paid to the owner of record at the time of the sheriff's sale.

  3. Redemption Rights:

    • Extended Period for Creditors: The period during which a creditor (a person or entity to whom money is owed) can redeem a foreclosed property has been extended, providing more time for these actions to be initiated.
    • Notification and Documentation: Creditors intending to redeem must record their intention and supporting documents in advance, enhancing transparency and order in the redemption process.

  4. Resolution of Competing Claims: In cases where there are disputes or competing claims over the surplus from a foreclosure sale, the sheriff can petition the court to determine rightful ownership and distribution of the funds, avoiding premature and potentially incorrect disbursements.

These proposed amendments aim to provide clearer procedures and enhanced rights for tenants, property owners, and creditors involved in tax and foreclosure situations. The legislation seeks to make the processes around foreclosures and redemption more equitable and transparent, potentially reducing disputes and ensuring that all parties have a fair opportunity to reclaim their rights or property.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 16, 2025HouseFloorActionIntroduction and first reading, referred toJudiciary Finance and Civil Law
February 23, 2025HouseFloorActionAuthor added
March 31, 2025HouseFloorActionCommittee report, to adopt as amended
March 31, 2025HouseFloorActionSecond reading

Citations

 
[
  {
    "analysis": {
      "added": [
        "Clarifies the process for retaining and distributing mortgage foreclosure sale surplus by the sheriff.",
        "Includes a requirement to notify owners about surplus and procedures for claiming it."
      ],
      "removed": [],
      "summary": "This section deals with the distribution of surplus funds following foreclosure sales.",
      "modified": []
    },
    "citation": "580.10"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This section addresses the satisfaction of mortgage debt through foreclosure sale.",
      "modified": [
        "States that proceeds from the foreclosure sale satisfy the mortgage debt, with an exception noted in section 582.30."
      ]
    },
    "citation": "580.225"
  },
  {
    "analysis": {
      "added": [
        "Lengthens the creditor redemption period from seven to fourteen days."
      ],
      "removed": [],
      "summary": "This section outlines creditor redemption rights following a foreclosure sale.",
      "modified": [
        "Expands on the procedures and required documents for creditors to redeem property.",
        "Clarifies the computation of time periods when redemption periods end on weekends or legal holidays."
      ]
    },
    "citation": "580.24"
  }
]

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