Postponement of Foreclosures by Homeowners

16 Jun

Minnesota homeowners have been given another vehicle to avoid foreclosure, at least temporarily, in the hopes of giving homeowners more time to catch up on delinquent loans, and facilitating sales, or more likely, loan modifications.  Effective June 15, 2009, the legislature has amended Minn. Stat. Sec. 580.07 to allow a homeowner of certain nonagricultural homestead property to postpone for five (5) months a pending mortgage foreclosure sale. To do so, the homeowner must file and serve an Affidavit requesting postponement  at least 15 days before the scheduled sale. If requested though, the statutory redemption period, which normally will be six (6) months from the date of the sale, is shortened to five (5) weeks from the date of sale, which minimizes the net impact of the amendment on lenders and associations.

 

As most community associations utilize Chapter 580 in the foreclosure of association liens, we are of the opinion this amendment will be interpreted to apply to the foreclosure of homeowner assessment liens.

 

Although past remedial amendments have put the onus on the lenders to provide information to homeowners in foreclosure about the availability of state and federal help for foreclosure, no mention of how the homeowner is to to be told about this new opportunity is found in the statute.

 

Click here to view 2009 Minn. Sess. Law Serv. Ch. 78 (H.F. 2088) See section 21 for Section 580.07

 

Entry by Gretchen Schellhas.  Gretchen is a shareholder at Thomsen & Nybeck, P.A. and Chief Executive Officer of the firm.  She practices primarily in the areas of real estate, collections, community association law and family law

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