Minnesota foreclosures regulations were changed in June of 2009 in an effort to reduce the impact of the recession on the state’s residential housing market. These changes gave new rights to the homeowner in a foreclosure proceeding and placed new responsibilities on lenders in the case of any abandoned properties. Homeowners involved in forced sale now have the right to have the sale postponed by 5 months.
The length of the foreclosure process in unaffected by a homeowner obtaining a postponement. The redemption period, which allows a mortgagee to avoid forced personal bankruptcy by making good on the outstanding balance due on the mortgage after it has been sold. To keep the foreclosure process from dragging out, the redemption period for homeowners who get a postponement has been lowered to 35 days from the six months that is allowed in cases where no postponement is requested,
The process is also kept intact by limiting the use of a postponement to avoid a forced sale only once. This is the case regardless the circumstances. A homeowner who gets their mortgage current within the five week postponement period is still prevented from applying for a postponement in any subsequent foreclosure proceedings on the same property.
The lender is not required to do any new paperwork. Publishing the date of sale does not have to be done again, no new notice of sale is required and the mortgagee does not have to be served a second time. This effort to reduce the burden on lenders in the event of postponement of an approved sale date is unexpected.
Lenders do have additional duties under newly revised Minnesota foreclosure laws in the case of abandoned properties. It use to be that when a property was abandoned it was optional for lenders to take steps to inspect the property, protect it from the elements and secure it from trespass. These option activities have been made mandatory and can be ordered by city officials. Additional maintenance minimums have also been established.
The issuance of a certificate of sale by a duly designated sheriff and any additional evidence required by a court to find that a property is, in fact, abandoned is required before these new requirements come into affect. The new requirements include changing the locks or installing locks on all windows and exterior doors. Alternatively, the lender may simply board up the building. Alarm systems may also be installed.
Lenders who undertake these responsibilities must present the keys to the new locks to the homeowner if the house has not yet been disposed of in a forced sale. The lenders costs in the completion of these undertakings may be added to the principal owing on the mortgage if the undertakings are determined to protect the property from water, trespass, public safety or other minimum standards of the community.
Under these Minnesota foreclosures regulations, cities have the right reduce the redemption period. This allows the city to gain access to the residence even if the property is still technically the property of the homeowner who abandoned it.
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