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Bill clarifies homeowners’ right to postpone sale applies to judicial foreclosures, committee refers it on
Summary
The committee approved re-referral of House File 1224 to Commerce, Finance and Policy after adopting an amendment; the bill clarifies that Minnesota’s right to postpone a mortgage sale applies in judicial foreclosures as well as foreclosure by advertisement.
The Judiciary Finance and Civil Law Committee re-referred House File 1224 to the Commerce, Finance and Policy Committee after adopting a DE1 amendment and hearing sponsor testimony that the bill resolves an ambiguity about postponement rights in judicial foreclosures.
Representative Freiberg said the statutory postponement option, enacted after the 2008–2009 foreclosure crisis to allow homeowners more time to reinstate a mortgage, was clearly available for foreclosures by advertisement but ambiguous for judicial (court-action) foreclosures. He said a 2022 U.S. District Court decision involving a federal tax lien had led to more residential foreclosures proceeding by action rather than advertisement, prompting questions from housing counselors and legal aid about whether the postponement tool could be used in judicial foreclosures.
Ron Elwood of Legal Aid testified in support and told members that the current statutory language limits appeals and that local practice had produced instances in which a county made a maltreatment determination or took action only to have a human services judge reverse for lack of jurisdiction (testimony described a different example of jurisdictional reversal in another bill). Sponsor Freiberg said stakeholders including the Minnesota State Bar Association real property section, Minnesota Bankers Association, Minnesota Credit Union Association, Bankers Association, Minnesota Land Title Association and Minnesota Mortgage Association had been consulted and raised no concerns.
After questions about the relative frequency of judicial versus advertisement foreclosures—witnesses said residential foreclosures historically were mostly by advertisement but that judicial foreclosures had increased since the 2022 decision—the committee voted to re-refer the bill to Commerce, Finance and Policy.
Votes at a glance: The committee adopted the DE1 amendment by voice and re-referred House File 1224 to Commerce, Finance and Policy by voice vote.
