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Committee advances bill clarifying homeowners' right to postpone judicial foreclosure sale
Summary
The House Commerce Committee placed House File 1224 on the General Register after hearing testimony that the bill resolves ambiguity about whether homeowners can postpone judicial foreclosure sales, a question raised by a 2022 federal court decision.
Representative Steve Freiberg, sponsor of House File 1224, moved the bill to the General Register and described it as a narrow fix to a statutory ambiguity that arose after the foreclosure crisis and a recent federal court ruling.
The bill clarifies that Minnesota’s existing statutory right to postpone a mortgage sale — a tool adopted during the 2009 foreclosure response — applies not only to foreclosures by advertisement but also to judicial foreclosures. Freiberg said the 2009 law allowed a mortgagor to postpone a sale and reinstate the mortgage; the proposed language makes that same postponement option explicit when a homeowner’s property is being foreclosed by action.
The clarification was prompted, Freiberg said, by a 2022 United States District Court decision that can require some residential foreclosures to proceed by judicial action when a federal tax lien is present. Freiberg said housing counselors and legal aid sought clarity so they could advise clients. He thanked several stakeholder groups that had been consulted, including the Minnesota State Bar Association Real Property Section, the Minnesota Bankers Association, the Minnesota Land Title Association and the Minnesota Mortgage Association.
Ron Ellwood of Legal Aid testified in support and offered to answer questions. Representative Pat O'Driscoll expressed his support and said the tool creates a “pause button” that allows parties to continue negotiations without restarting the costly foreclosure process.
The committee approved placing House File 1224 on the General Register by voice vote. Members also indicated the bill’s language will be included as an amendment in the broader commerce policy work later in the session.
