June 20th, 2012
Financial institutions and homeowners facing foreclosure commonly misunderstand the borrower’s repayment rights after a foreclosure has been initiated, by confusing “reinstatement” and “acceleration”. “Acceleration” occurs when the borrower defaults on the terms of his mortgage and the mortgage holder calls the entire unpaid balance of the mortgage due and payable. Financial institutions and borrower may erroneously believe that the borrower is required to pay the accelerated amount to forestall the foreclosure proceedings. Only the past due amounts, plus statutory-allowed costs, must be paid in order to reinstate a mortgage.
Under Minnesota Statutes, at any time before the sheriff’s sale of the mortgaged property, the borrower has the right to reinstate his mortgage, which will act to terminate the foreclosure proceeding. That is, the borrower may pay all delinquent amounts due and owing under the mortgage, plus costs identified in the statute to the mortgage holder. Such costs may include interest, the cost of publication of the notice of mortgage foreclosure sale, and limited attorneys’ fees incurred by the financial institution to begin the foreclosure.
If the borrower is uncertain of the total amount due, he may submit a written request to the sheriff, asking for the reinstatement amount. Pursuant to Minnesota Statutes, the sheriff must provide the borrower with that information within seven days of the date of the written request.
June 6th, 2012
Minnesota Statute Section 491A governs the authority and procedure for the Minnesota Conciliation Court. Conciliation Court (also known as “small claims court”) provides a relatively quick, efficient and low-stress procedure for pursuing a money judgment for certain types of claims. This procedure is a welcome alternative to pursuing a civil judgment in District Court, the costs and expenses of which often make pursuing a small judgment cost prohibitive.
Initially, the Conciliation Court was authorized to hear and determine certain civil trials in which a maximum of $6,000 was sought. The Conciliation Court’s jurisdiction rose to $7,500 for Conciliation Court matters filed on or after July 1, 1994.
After 18 years, the State Legislature has again increased the Conciliation Court’s jurisdiction. Effective August 1, 2012, the Conciliation Court will be authorized to hear and determine civil trials for money damages up to $10,000. This amount will increase to $15,000 for Conciliation Court matters filed on or after August 1, 2014.
The newly enacted revision can be found on the Minnesota State Legislature’s website here. The language of the revision is subject to change, and the official language will be available on the Minnesota Office of the Revisor of Statute’s webpage later this summer.