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SF2338 (Legislative Session 94 (2025-2026))

Mortgage foreclosure redemption and surpluses authorization

Related bill: HF1027

AI Generated Summary

Purpose of the Bill

This bill seeks to update and clarify procedures related to mortgage foreclosure, redemption, and surplus funds in Minnesota. It focuses on amending current statutes to improve the process for property owners, creditors, and other stakeholders involved in foreclosure situations.

Main Provisions

  • Tenant Liens for Paid Taxes: Occupants or tenants who pay delinquent property taxes can record a lien on the property, enabling them to recover the payment from owners.
  • Distribution of Surplus Funds: In foreclosure sales, any surplus funds exceeding $100 must be held by the sheriff and can be claimed by the homeowner or applied toward redeeming the property. Surpluses under $100 may be directly paid to the homeowner.
  • Notification of Surplus: Sheriffs must notify property owners when a surplus exists, providing contact information for assistance and instructions on claiming funds.
  • Redemption Periods: The bill extends the time for creditors to redeem a foreclosed property to 14 days and outlines specific steps they must follow to assert their redemption rights.
  • Handling of Disputes: If there are competing claims to a surplus, the sheriff may involve the court to resolve the claims without additional costs. The sheriff is responsible for notifying all parties involved.
  • Satisfaction of Mortgage Debt: Clarifies that the amount received from the foreclosure sale satisfies the mortgage debt, except under certain conditions.

Significant Changes to Existing Law

  • The bill modifies the timeframe for creditors redeeming foreclosed properties from 7 days to 14 days.
  • It mandates enhanced notification procedures to owners about surplus funds and redemption options after foreclosure sales.
  • Introduces a formal process for tenants or other parties with equitable interest to claim back taxes as a lien.
  • Requires sheriffs to handle disputes over surplus funds through the courts, if necessary, and ensures all interested parties are informed about any proceedings.

Relevant Terms

  • Mortgage foreclosure
  • Redemption period
  • Surplus funds
  • Lien
  • Foreclosure sale
  • Creditor rights
  • Legal notification
  • Tax lien
  • Sheriff’s duties

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 09, 2025SenateFloorActionIntroduction and first reading
March 09, 2025SenateFloorActionReferred toJudiciary and Public Safety

Citations

 
[
  {
    "analysis": {
      "added": [
        "A requirement for the sheriff to hold surplus funds over $100 for a period allowed for redemption."
      ],
      "removed": [],
      "summary": "This bill modifies the handling of surplus funds from foreclosure sales under section 580.10.",
      "modified": [
        "Specifies procedures for notification and handling of surplus funds, including options for owners to request application of the surplus towards redemption."
      ]
    },
    "citation": "580.10"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill amends the time period for redemption under section 580.23 in the context of applying surplus funds or for creditors to redeem.",
      "modified": [
        "Extends the redemption timeline from seven to fourteen days and clarifies the redemption process for junior creditors."
      ]
    },
    "citation": "580.23"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references section 582.032 regarding applicable redemption periods for handling surplus funds.",
      "modified": []
    },
    "citation": "582.032"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Mentioned with regard to surplus and redemption procedures under section 580.10 and 580.24.",
      "modified": []
    },
    "citation": "580.28"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Referenced in relation to the determination of redemption amounts under section 580.24.",
      "modified": [
        "Specifies the interest rates applicable to amounts required for creditor redemption."
      ]
    },
    "citation": "580.25"
  }
]

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