ew Minnesota laws took effect in August 2021, many of which directly impact the banking and lending community. Our team has been monitoring the Minnesota Legislature and Governor’s Office to identify new legislation and laws, and provide the following as an overview:

Modification to Minnesota Statute Section 281, with amendments to sections 282.301; 325N.01; 325N.02; 325N.03; 325N.04; 325N.06; 325N.10, subdivisions 2, 3, 4, 5, 7

Effective July 1, 2021, Minnesota has enacted a statute pertaining to real property; clarifying ownership definitions; requiring the record owner to be listed as grantee in tax- forfeited land sales; and amending sections 282.301; 325N.01; 325N.02; 325N.03; 325N.04; 325N.06; 325N.10, subdivisions 2, 3, 4, 5, 7; proposing coding for new law in Minnesota Statutes, chapter 282.

The act parceled out the certifications that need to be accomplished following the sale of any real property; namely, the purchaser shall receive a receipt in such form as may be prescribed by the attorney general, and upon full payment of the purchase price, a description of the land and the date of the final installment of the purchase price must be certified by the county auditor to the commissioner of revenue of the state of Minnesota. Upon receipt of the certification, the commissioner must issue a quitclaim deed in the name of the state, as grantor, to the record owner and/or estate/assignee of installment contract at the time of the expiration of the redemption period (section 281.23).

The quitclaim deed must then be electronically recorded or sent to the county auditor to have it recorded before it is forwarded to grantee.

In addition, definitions surrounding foreclosure have been modified to use terms such as “Solicitor”, “Equity Purchaser” and “Property Reconveyance” rather than “Foreclosure consultant”, “Foreclosure Purchaser”, and “Foreclosure Reconveyance”. The service of a Solicitor has been expanded and is further outlined in Section 325N.01. Click here to read more.

Modification to Minnesota Statute Section 47.58

Effective August 1, 2021, notices will be required for reverse mortgage loans. The reverse mortgage loan servicer must send copies of unanswered written communication and subsequent written communications from servicer to borrower regarding any delinquencies, defaults, and unfulfilled obligations that may result in foreclosure of such reverse mortgage loan agreement to third-party designee and/or independent counseling agency. The statute, section 47.58, Subd. 6a-b outlines the appropriate manner in which the servicer may communicate such details. Further, the section provides a new Authorization Form for communications. (Amendment to Minnesota Statutes 2020, section 47.58, subdivision 1). Click here to read more.

Modification to Minnesota Statute Section 336B.02

Effective retroactively to December 30, 2020, filing a mortgage or deed of trust (along with financing statements covering fixtures) executed between May 1, 2020 and June 30, 2020 in the Office of the Secretary of State under Minnesota Statute section 336B.02, has the same effect as recording in the office of the county recorder or duly registered in the office of the registrar of titles of the counties in which the real estate is situated. The effectiveness of the filing terminates at the same time as provided in Minnesota Statutes, section 336B.02, subdivision 3, for the termination of the effectiveness of fixture filing. Any filing made in accordance with this section shall also be made with the office of the county recorder, or duly registered in the office of the registrar of titles, of the counties in which the real estate is situated. (Amendment to Laws 2020, chapter 118, section 4). Click here to read more.

Modification to Minnesota Statute Section 48.512

Effective May 2021, Minnesota Statute 2020, section 48.512, subdivisions 3 and 7, pertaining to checking account requirements, have been modified. Subdivision 3(b), Confirming no involuntary closing prior to opening or authorizing signatory power over a transaction account has been restricted. If the applicant has an account closed within the last 12 months due to a dishonored check or been convicted of a criminal offense because of a check within 24 months of the application, the financial institution may not open of authorize signatory power over the transaction account UNLESS applied to programs designed to expand access to financial services to individuals who do not possess a transaction account.

Additionally, Subdivision 7 has increased the servicing charge from $4 to $10 for a dishonored check of any person other than the issuer of the check. Click here to read more.