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Committee adopts author amendment and lays over mortgage‑foreclosure redemption bill
Summary
Senate File 23‑38, a package of changes to foreclosure‑by‑advertisement procedures intended to clarify sheriffs’ duties and protect homeowners’ rights to surplus funds and redemption, had an author’s amendment adopted and was laid over for possible inclusion in the omnibus bill.
Senate File 23‑38 would revise procedures for foreclosures by advertisement (Minn. Stat. ch. 580), clarify sheriff responsibilities at sheriff’s sales, tighten rules to prevent foreclosure speculators from creating redeemable interests, and improve recovery and distribution of surplus sale proceeds to homeowners.
Sponsor testimony said the bill is intended to reduce loopholes used by speculators, to make surplus handling clearer for sheriffs, and to give homeowners more time and tools to redeem their property or use surplus funds to retain equity. The committee adopted the A‑1 author’s amendment, which (1) directs the sheriff to make every effort to notify the homeowner of the right to claim a surplus and to hold surplus funds during the redemption period so a homeowner can use the surplus to redeem; (2) provides a pathway for the sheriff to seek judicial guidance rather than making judicial findings; and (3) extends the post‑denial period for loan‑modification applicants from 30 days to 60 days to seek alternative options.
Legal Aid attorneys who worked with the Hennepin County Sheriff and foreclosure practitioners described practical problems the bill resolves, including unclear timelines for junior lienholders to claim surplus and sheriff uncertainty about how to disburse surplus funds. The committee laid the bill over for possible inclusion in the omnibus process.
