Bill Text: MN HF3028 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Lenders required to make calculations prior to foreclosure.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-04-24 - Introduction and first reading, referred to Commerce and Regulatory Reform [HF3028 Detail]
Download: Minnesota-2011-HF3028-Introduced.html
1.2relating to mortgage lending; requiring lenders to make certain calculations prior
1.3to foreclosure; proposing coding for new law in Minnesota Statutes, chapter 580.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. [580.023] CERTAIN PREFORECLOSURE CALCULATIONS
1.6REQUIRED.
1.7A mortgage lender, prior to initiating a foreclosure of a mortgage on residential
1.8property, has a duty of good faith and fair dealing to determine the net present value to the
1.9lender of the mortgage loan if it were modified in any way so as to permit the homeowner
1.10to retain the property, as compared to the net present value to the lender of foreclosure.
1.11If there is any possible loan modification that would cause the net present value to the
1.12lender of the modified loan to exceed the net present value of foreclosure, the lender has a
1.13duty to make a good-faith offer to modify the loan. In calculating the net present value
1.14of the alternatives, the lender shall use the same discount rate in both calculations. The
1.15lender shall provide the calculations to the borrower prior to commencing foreclosure
1.16and retain its calculations and analysis of the possible modifications, and records of the
1.17lender's communications with the borrower about those calculations and analysis, for at
1.18least six years.
1.19EFFECTIVE DATE.This section is effective August 1, 2012, and applies to
1.20foreclosures commenced on or after that date.
1.3to foreclosure; proposing coding for new law in Minnesota Statutes, chapter 580.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. [580.023] CERTAIN PREFORECLOSURE CALCULATIONS
1.6REQUIRED.
1.7A mortgage lender, prior to initiating a foreclosure of a mortgage on residential
1.8property, has a duty of good faith and fair dealing to determine the net present value to the
1.9lender of the mortgage loan if it were modified in any way so as to permit the homeowner
1.10to retain the property, as compared to the net present value to the lender of foreclosure.
1.11If there is any possible loan modification that would cause the net present value to the
1.12lender of the modified loan to exceed the net present value of foreclosure, the lender has a
1.13duty to make a good-faith offer to modify the loan. In calculating the net present value
1.14of the alternatives, the lender shall use the same discount rate in both calculations. The
1.15lender shall provide the calculations to the borrower prior to commencing foreclosure
1.16and retain its calculations and analysis of the possible modifications, and records of the
1.17lender's communications with the borrower about those calculations and analysis, for at
1.18least six years.
1.19EFFECTIVE DATE.This section is effective August 1, 2012, and applies to
1.20foreclosures commenced on or after that date.
