325N.01 DEFINITIONS.
The definitions in paragraphs (a) to (h) apply to sections 325N.01 to 325N.09.
(a) "Foreclosure consultant" means any person who, directly or indirectly, makes any
solicitation, representation, or offer to any owner to perform for compensation or who, for
compensation, performs any service which the person in any manner represents will in any
manner do any of the following:
(1) stop or postpone the foreclosure sale;
(2) obtain any forbearance from any beneficiary or mortgagee;
(3) assist the owner to exercise the right of reinstatement provided in section 580.30;
(4) obtain any extension of the period within which the owner may reinstate the owner's
obligation;
(5) obtain any waiver of an acceleration clause contained in any promissory note or contract
secured by a mortgage on a residence in foreclosure or contained in the mortgage;
(6) assist the owner in foreclosure or loan default to obtain a loan or advance of funds;
(7) avoid or ameliorate the impairment of the owner's credit resulting from the recording
of a notice of default or the conduct of a foreclosure sale; or
(8) save the owner's residence from foreclosure.
(b) A foreclosure consultant does not include any of the following:
(1) a person licensed to practice law in this state when the person renders service in the
course of his or her practice as an attorney-at-law;
(2) a person licensed as a debt management services provider under chapter 332A, when the
person is acting as a debt management services provider as defined in that chapter;
(3) a person licensed as a real estate broker or salesperson under chapter 82 when the person
engages in acts whose performance requires licensure under that chapter unless the person is
engaged in offering services designed to, or purportedly designed to, enable the owner to retain
possession of the residence in foreclosure;
(4) a person licensed as an accountant under chapter 326A when the person is acting in any
capacity for which the person is licensed under those provisions;
(5) a person or the person's authorized agent acting under the express authority or written
approval of the Department of Housing and Urban Development or other department or agency of
the United States or this state to provide services;
(6) a person who holds or is owed an obligation secured by a lien on any residence in
foreclosure when the person performs services in connection with this obligation or lien if the
obligation or lien did not arise as the result of or as part of a proposed foreclosure reconveyance;
(7) any person or entity doing business under any law of this state, or of the United States
relating to banks, trust companies, savings and loan associations, industrial loan and thrift
companies, regulated lenders, credit unions, insurance companies, or a mortgagee which is a
United States Department of Housing and Urban Development approved mortgagee and any
subsidiary or affiliate of these persons or entities, and any agent or employee of these persons or
entities while engaged in the business of these persons or entities;
(8) a person licensed as a residential mortgage originator or servicer pursuant to chapter 58,
when acting under the authority of that license;
(9) a nonprofit agency or organization that offers counseling or advice to an owner of a
home in foreclosure or loan default if they do not contract for services with for-profit lenders
or foreclosure purchasers;
(10) a judgment creditor of the owner, to the extent that the judgment creditor's claim accrued
prior to the personal service of the foreclosure notice required by section 580.03, but excluding a
person who purchased the claim after such personal service; and
(11) a foreclosure purchaser as defined in section 325N.10.
(c) "Foreclosure reconveyance" means a transaction involving:
(1) the transfer of title to real property by a foreclosed homeowner during a foreclosure
proceeding, either by transfer of interest from the foreclosed homeowner or by creation of a
mortgage or other lien or encumbrance during the foreclosure process that allows the acquirer to
obtain title to the property by redeeming the property as a junior lienholder; and
(2) the subsequent conveyance, or promise of a subsequent conveyance, of an interest back
to the foreclosed homeowner by the acquirer or a person acting in participation with the acquirer
that allows the foreclosed homeowner to possess either the residence in foreclosure or any other
real property, which interest includes, but is not limited to, an interest in a contract for deed,
purchase agreement, option to purchase, or lease.
(d) "Person" means any individual, partnership, corporation, limited liability company,
association, or other group, however organized.
(e) "Service" means and includes, but is not limited to, any of the following:
(1) debt, budget, or financial counseling of any type;
(2) receiving money for the purpose of distributing it to creditors in payment or partial
payment of any obligation secured by a lien on a residence in foreclosure;
(3) contacting creditors on behalf of an owner of a residence in foreclosure;
(4) arranging or attempting to arrange for an extension of the period within which the owner
of a residence in foreclosure may cure the owner's default and reinstate his or her obligation
pursuant to section 580.30;
(5) arranging or attempting to arrange for any delay or postponement of the time of sale of
the residence in foreclosure;
(6) advising the filing of any document or assisting in any manner in the preparation of any
document for filing with any bankruptcy court; or
(7) giving any advice, explanation, or instruction to an owner of a residence in foreclosure,
which in any manner relates to the cure of a default in or the reinstatement of an obligation
secured by a lien on the residence in foreclosure, the full satisfaction of that obligation, or the
postponement or avoidance of a sale of a residence in foreclosure, pursuant to a power of sale
contained in any mortgage.
(f) "Residence in foreclosure" means residential real property consisting of one to four
family dwelling units, one of which the owner occupies as his or her principal place of residence,
where there is a delinquency or default on any loan payment or debt secured by or attached to the
residential real property including, but not limited to, contract for deed payments.
(g) "Owner" means the record owner of the residential real property in foreclosure at the
time the notice of pendency was recorded, or the summons and complaint served.
(h) "Contract" means any agreement, or any term in any agreement, between a foreclosure
consultant and an owner for the rendition of any service as defined in paragraph (e).
History: 2004 c 263 s 1; 2007 c 57 art 3 s 43; 2007 c 106 s 1

NOTE: This section, as added by Laws 2004, chapter 263, section 1, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.02 RESCISSION OF FORECLOSURE CONSULTANT CONTRACT.
(a) In addition to any other right under law to rescind a contract, an owner has the right to
cancel such a contract until midnight of the third business day after the day on which the owner
signs a contract which complies with section 325N.03.
(b) Cancellation occurs when the owner gives written notice of cancellation to the foreclosure
consultant at the address specified in the contract.
(c) Notice of cancellation, if given by mail, is effective when deposited in the mail properly
addressed with postage prepaid.
(d) Notice of cancellation given by the owner need not take the particular form as provided
with the contract and, however expressed, is effective if it indicates the intention of the owner not
to be bound by the contract.
History: 2004 c 263 s 2

NOTE: This section, as added by Laws 2004, chapter 263, section 2, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.03 CONTRACT.
(a) Every contract must be in writing and must fully disclose the exact nature of the
foreclosure consultant's services and the total amount and terms of compensation.
(b) The following notice, printed in at least 14-point boldface type and completed with the
name of the foreclosure consultant, must be printed immediately above the statement required by
paragraph (c):

	"NOTICE REQUIRED BY MINNESOTA LAW
	......................... (Name) or anyone working for him or her CANNOT:
	(1) Take any money from you or ask you for money until ......................... (Name) has completely finished doing everything he or she said he or she would do; and
	(2) Ask you to sign or have you sign any lien, mortgage, or deed."

(c) The contract must be written in the same language as principally used by the foreclosure
consultant to describe his or her services or to negotiate the contract, must be dated and signed
by the owner, and must contain in immediate proximity to the space reserved for the owner's
signature a conspicuous statement in a size equal to at least 10-point boldface type, as follows:
"You, the owner, may cancel this transaction at any time prior to midnight of the third
business day after the date of this transaction. See the attached notice of cancellation form
for an explanation of this right."
(d) The notice of cancellation must contain, and the contract must contain on the first page, in
a type size no smaller than that generally used in the body of the document, each of the following:
(1) the name and physical address of the foreclosure consultant to which the notice of
cancellation is to be mailed or otherwise delivered. A post office box does not constitute a physical
address. A post office box may be designated for delivery by mail only if it is accompanied by a
physical address at which the notice could be delivered by a method other than mail. An e-mail
address may be included, in addition to the physical address; and
(2) the date the owner signed the contract.
(e) Cancellation occurs when the foreclosed homeowner delivers, by any means, written
notice of cancellation to the address specified in the contract. If cancellation is mailed, delivery is
effective upon mailing. If e-mailed, cancellation is effective upon transmission. The contract must
be accompanied by a completed form in duplicate, captioned "notice of cancellation," which must
be attached to the contract, must be easily detachable, and must contain in at least 10-point type
the following statement written in the same language as used in the contract:

	"NOTICE OF CANCELLATION
	..... (Enter date of transaction) (Date)
	You may cancel this transaction, without any penalty or obligation, within three business days from the above date.
	To cancel this transaction, you may use any of the following methods: (1) mail or otherwise deliver a signed and dated copy of this cancellation notice, or any other written notice of cancellation; or (2) e-mail a notice of cancellation
	to ..... (Name of foreclosure consultant)
	at ..... (Physical address of foreclosure consultant's place of business)
	..... (E-mail address of foreclosure consultant's place of business)
	NOT LATER THAN MIDNIGHT OF ..... (Date)
	I hereby cancel this transaction ..... (Date)
	..... (Owner's signature)"

(f) The foreclosure consultant shall provide the owner with a copy of the contract and the
attached notice of cancellation immediately upon execution of the contract.
(g) The three business days during which the owner may cancel the contract shall not begin
to run until the foreclosure consultant has complied with this section.
History: 2004 c 263 s 3; 2007 c 106 s 2

NOTE: This section, as added by Laws 2004, chapter 263, section 3, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.04 VIOLATIONS.
It is a violation for a foreclosure consultant to:
(1) claim, demand, charge, collect, or receive any compensation until after the foreclosure
consultant has fully performed each and every service the foreclosure consultant contracted to
perform or represented he or she would perform;
(2) claim, demand, charge, collect, or receive any fee, interest, or any other compensation
for any reason which exceeds eight percent per annum of the amount of any loan which the
foreclosure consultant may make to the owner. Such a loan must not, as provided in clause (3), be
secured by the residence in foreclosure or any other real or personal property;
(3) take any wage assignment, any lien of any type on real or personal property, or other
security to secure the payment of compensation. Any such security is void and unenforceable;
(4) receive any consideration from any third party in connection with services rendered to an
owner unless the consideration is first fully disclosed to the owner;
(5) acquire any interest, directly or indirectly, or by means of a subsidiary or affiliate in a
residence in foreclosure from an owner with whom the foreclosure consultant has contracted;
(6) take any power of attorney from an owner for any purpose, except to inspect documents
as provided by law; or
(7) induce or attempt to induce any owner to enter a contract which does not comply in all
respects with sections 325N.02 and 325N.03.
History: 2004 c 263 s 4; 2007 c 106 s 3

NOTE: This section, as added by Laws 2004, chapter 263, section 4, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.05 WAIVER NOT ALLOWED.
Any waiver by an owner of the provisions of sections 325N.01 to 325N.09 is void and
unenforceable as contrary to public policy. Any attempt by a foreclosure consultant to induce an
owner to waive the owner's rights is a violation of sections 325N.01 to 325N.09.
History: 2004 c 263 s 5

NOTE: This section, as added by Laws 2004, chapter 263, section 5, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.06 REMEDIES.
(a) A violation of sections 325N.01 to 325N.09 is considered to be a violation of section
325F.69, and all remedies of section 8.31 are available for such an action. A private cause of
action under section 8.31 by a foreclosed homeowner is in the public interest. An owner may
bring an action against a foreclosure consultant for any violation of sections 325N.01 to 325N.09.
Judgment must be entered for actual damages, reasonable attorney fees and costs, and appropriate
equitable relief.
(b) The rights and remedies provided in paragraph (a) are cumulative to, and not a limitation
of, any other rights and remedies provided by law. Any action brought pursuant to this section
must be commenced within four years from the date of the alleged violation.
(c) The court may award exemplary damages up to 1-1/2 times the compensation charged by
the foreclosure consultant if the court finds that the foreclosure consultant violated the provisions
of section 325N.04, clause (1), (2), or (4), and the foreclosure consultant's conduct was in bad
faith.
(d) Notwithstanding any other provision of this section, no action may be brought on
the basis of a violation of sections 325N.01 to 325N.09, except by an owner against whom
the violation was committed or by the attorney general. This limitation does not apply to
administrative action by the commissioner of commerce.
History: 2004 c 263 s 6

NOTE: This section, as added by Laws 2004, chapter 263, section 6, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.07 PENALTY.
Any person who commits any violation described in section 325N.04 may, upon conviction,
be fined not more than $10,000 or imprisoned not more than one year or both. Prosecution or
conviction for any violation described in section 325N.04 will not bar prosecution or conviction
for any other offenses. These penalties are cumulative to any other remedies or penalties provided
by law.
History: 2004 c 263 s 7

NOTE: This section, as added by Laws 2004, chapter 263, section 7, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.08 PROVISIONS SEVERABLE.
If any provision of sections 325N.01 to 325N.09 or the application of any of these provisions
to any person or circumstance is held to be unconstitutional and void, the remainder of sections
325N.01 to 325N.09 remains valid.
History: 2004 c 263 s 8

NOTE: This section, as added by Laws 2004, chapter 263, section 8, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.09 LIABILITY.
(a) Any provision in a contract which attempts or purports to require arbitration of any
dispute arising under sections 325N.01 to 325N.09 is void at the option of the owner.
(b) This section applies to any contract entered into on or after August 1, 2004.
History: 2004 c 263 s 9

NOTE: This section, as added by Laws 2004, chapter 263, section 9, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.10 DEFINITIONS.
    Subdivision 1. Scope. For the purposes of sections 325N.10 to 325N.18, the terms defined in
this section have the meanings given them.
    Subd. 2. Foreclosed homeowner. "Foreclosed homeowner" means an owner of residential
real property, including a condominium, that is the primary residence of the owner and whose
mortgage on the real property is or was in foreclosure.
    Subd. 3. Foreclosure reconveyance. "Foreclosure reconveyance" means a transaction
involving:
(1) the transfer of title to real property by a foreclosed homeowner during a foreclosure
proceeding, either by transfer of interest from the foreclosed homeowner or by creation of a
mortgage or other lien or encumbrance during the foreclosure process that allows the acquirer to
obtain title to the property by redeeming the property as a junior lienholder; and
(2) the subsequent conveyance, or promise of a subsequent conveyance, of an interest back
to the foreclosed homeowner by the acquirer or a person acting in participation with the acquirer
that allows the foreclosed homeowner to possess either the residence in foreclosure or other real
property, which interest includes, but is not limited to, an interest in a contract for deed, purchase
agreement, option to purchase, or lease.
    Subd. 4. Foreclosure purchaser. "Foreclosure purchaser" means a person that has acted as
the acquirer in a foreclosure reconveyance. Foreclosure purchaser also includes a person that has
acted in joint venture or joint enterprise with one or more acquirers in a foreclosure reconveyance.
A foreclosure purchaser does not include: (i) a natural person who shows that the natural person
is not in the business of foreclosure purchasing and has a prior personal relationship with the
foreclosed homeowner, or (ii) a federal or state chartered bank, savings bank, thrift, or credit union.
    Subd. 5. Resale. "Resale" means a bona fide market sale of the property subject to the
foreclosure reconveyance by the foreclosure purchaser to an unaffiliated third party.
    Subd. 6. Resale price. "Resale price" means the gross sale price of the property on resale.
    Subd. 7. Residence in foreclosure. "Residence in foreclosure" means residential real
property consisting of one to four family dwelling units, one of which the owner occupies as
the owner's principal place of residence, where there is a delinquency or default on any loan
payment or debt secured by or attached to the residential real property, including, but not limited
to, contract for deed payments.
History: 2004 c 263 s 10; 2007 c 106 s 4-6

NOTE: This section, as added by Laws 2004, chapter 263, section 10, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.11 CONTRACT REQUIREMENT; FORM AND LANGUAGE.
A foreclosure purchaser shall enter into every foreclosure reconveyance in the form of a
written contract. Every contract must be written in letters of a size equal to at least 12-point
boldface type, in the same language principally used by the foreclosure purchaser and foreclosed
homeowner to negotiate the sale of the residence in foreclosure and must be fully completed and
signed and dated by the foreclosed homeowner and foreclosure purchaser before the execution of
any instrument of conveyance of the residence in foreclosure.
History: 2004 c 263 s 11

NOTE: This section, as added by Laws 2004, chapter 263, section 11, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.12 CONTRACT TERMS.
Every contract required by section 325N.11 must contain the entire agreement of the parties
and must include the following terms:
(1) the name, business address, and the telephone number of the foreclosure purchaser;
(2) the address of the residence in foreclosure;
(3) the total consideration to be given by the foreclosure purchaser in connection with or
incident to the sale;
(4) a complete description of the terms of payment or other consideration including, but not
limited to, any services of any nature that the foreclosure purchaser represents he or she will
perform for the foreclosed homeowner before or after the sale;
(5) the time at which possession is to be transferred to the foreclosure purchaser;
(6) a complete description of the terms of any related agreement designed to allow the
foreclosed homeowner to remain in the home, such as a rental agreement, repurchase agreement,
contract for deed, or lease with option to buy;
(7) a notice of cancellation as provided in section 325N.14, paragraph (b); and
(8) the following notice in at least 14-point boldface type, if the contract is printed or in
capital letters if the contract is typed, and completed with the name of the foreclosure purchaser,
immediately above the statement required by section 325N.14, paragraph (a):
Until your right to cancel this contract has ended, ....... (Name) or anyone working for .......
(Name) CANNOT ask you to sign or have you sign any deed or any other document."
The contract required by this section survives delivery of any instrument of conveyance of
the residence in foreclosure, and has no effect on persons other than the parties to the contract.
History: 2004 c 263 s 12

NOTE: This section, as added by Laws 2004, chapter 263, section 12, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.13 CONTRACT CANCELLATION.
(a) In addition to any other right of rescission, the foreclosed homeowner has the right to
cancel any contract with a foreclosure purchaser until midnight of the fifth business day following
the day on which the foreclosed homeowner signs a contract that complies with sections 325N.10
to 325N.15 or until 8:00 a.m. on the last day of the period during which the foreclosed homeowner
has a right of redemption, whichever occurs first.
(b) Cancellation occurs when the foreclosed homeowner delivers, by any means, written
notice of cancellation, provided that, at a minimum, the contract and the notice of cancellation
must contain a physical address to which notice of cancellation may be mailed or otherwise
delivered. A post office box does not constitute a physical address. A post office box may be
designated for delivery by mail only if it is accompanied by a physical address at which the notice
could be delivered by a method other than mail. An e-mail address may be provided in addition to
the physical address. If cancellation is mailed, delivery is effective upon mailing. If e-mailed,
cancellation is effective upon transmission.
(c) A notice of cancellation given by the foreclosed homeowner need not take the particular
form as provided with the contract.
(d) Within ten days following receipt of a notice of cancellation given in accordance with
this section, the foreclosure purchaser shall return without condition any original contract and any
other documents signed by the foreclosed homeowner.
History: 2004 c 263 s 13; 2007 c 106 s 7

NOTE: This section, as added by Laws 2004, chapter 263, section 13, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.14 NOTICE OF CANCELLATION.
(a) The contract must contain in immediate proximity to the space reserved for the foreclosed
homeowner's signature a conspicuous statement in a size equal to at least 14-point boldface type,
if the contract is printed, or in capital letters, if the contract is typed, as follows:

	"You may cancel this contract for the sale of your house without any penalty or obligation at any time before
	..... (Date and time of day)
	See the attached notice of cancellation form for an explanation of this right."

The foreclosure purchaser shall accurately enter the date and time of day on which the cancellation
right ends.
(b) The contract must be accompanied by a completed form in duplicate, captioned "notice
of cancellation" in a size equal to a 12-point boldface type if the contract is printed, or in capital
letters, if the contract is typed, followed by a space in which the foreclosure purchaser shall enter
the date on which the foreclosed homeowner executes the contract. This form must be attached
to the contract, must be easily detachable, and must contain in type of at least 10 points, if the
contract is printed or in capital letters if the contract is typed, the following statement written
in the same language as used in the contract:

	"NOTICE OF CANCELLATION
	..... (Enter date contract signed)
	You may cancel this contract for the sale of your house, without any penalty or obligation, at any time before
	..... (Enter date and time of day)
	To cancel this transaction, you may use any of the following methods: (1) mail or otherwise deliver a signed and dated copy of this cancellation notice; or (2) e-mail a notice of cancellation to
	..... (Name of purchaser)
	at ..... (Physical address of purchaser's place of business)
	..... (E-mail address of foreclosure consultant's place of business)
	NOT LATER THAN ..... (Enter date and time of day)
	I hereby cancel this transaction ..... (Date)
	..... (Seller's signature)"

(c) The foreclosure purchaser shall provide the foreclosed homeowner with a copy of the
contract and the attached notice of cancellation at the time the contract is executed by all parties.
(d) The five business days during which the foreclosed homeowner may cancel the contract
must not begin to run until all parties to the contract have executed the contract and the foreclosure
purchaser has complied with this section.
History: 2004 c 263 s 14; 2007 c 106 s 8

NOTE: This section, as added by Laws 2004, chapter 263, section 14, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.15 WAIVER.
Any waiver of the provisions of sections 325N.10 to 325N.18 is void and unenforceable as
contrary to public policy except a consumer may waive the five-day right to cancel provided in
section 325N.13 if the property is subject to a foreclosure sale within the five business days, and
the foreclosed homeowner agrees to waive his or her right to cancel in a handwritten statement
signed by all parties holding title to the foreclosed property.
History: 2004 c 263 s 15; 2005 c 10 art 1 s 67

NOTE: This section, as added by Laws 2004, chapter 263, section 15, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.16 LIABILITY.
(a) Any provision in a contract which attempts or purports to require arbitration of any
dispute arising under sections 325N.10 to 325N.18 is void at the option of the owner.
(b) This section applies to any contract entered into on or after August 1, 2004.
History: 2004 c 263 s 16

NOTE: This section, as added by Laws 2004, chapter 263, section 16, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.17 PROHIBITED PRACTICES.
A foreclosure purchaser shall not:
(a) enter into, or attempt to enter into, a foreclosure reconveyance with a foreclosed
homeowner unless:
(1) the foreclosure purchaser verifies and can demonstrate that the foreclosed homeowner
has a reasonable ability to pay for the subsequent conveyance of an interest back to the foreclosed
homeowner. In the case of a lease with an option to purchase, payment ability also includes the
reasonable ability to make the lease payments and purchase the property within the term of the
option to purchase. There is a rebuttable presumption that a homeowner is reasonably able to
pay for the subsequent conveyance if the owner's payments for primary housing expenses and
regular principal and interest payments on other personal debt, on a monthly basis, do not exceed
60 percent of the owner's monthly gross income. For the purposes of this section, "primary
housing expenses" means the sum of payments for regular principal, interest, rent, utilities,
hazard insurance, real estate taxes, and association dues. There is a rebuttable presumption
that the foreclosure purchaser has not verified reasonable payment ability if the foreclosure
purchaser has not obtained documents other than a statement by the foreclosed homeowner of
assets, liabilities, and income;
(2) the foreclosure purchaser and the foreclosed homeowner complete a closing for any
foreclosure reconveyance in which the foreclosure purchaser obtains a deed or mortgage from a
foreclosed homeowner. For purposes of this section, "closing" means an in-person meeting to
complete final documents incident to the sale of the real property or creation of a mortgage on the
real property conducted by a closing agent, as defined in section 82.17, who is not employed by
or an affiliate of the foreclosure purchaser, or employed by such an affiliate, and who does not
have a business or personal relationship with the foreclosure purchaser other than the provision
of real estate settlement services;
(3) the foreclosure purchaser obtains the written consent of the foreclosed homeowner to
a grant by the foreclosure purchaser of any interest in the property during such times as the
foreclosed homeowner maintains any interest in the property; and
(4) the foreclosure purchaser complies with the requirements for disclosure, loan terms, and
conduct in the federal Home Ownership Equity Protection Act, United States Code, title 15,
section 1639, or its implementing regulation, Code of Federal Regulations, title 12, sections
226.31, 226.32, and 226.34, for any foreclosure reconveyance in which the foreclosed homeowner
obtains a vendee interest in a contract for deed, regardless of whether the terms of the contract for
deed meet the annual percentage rate or points and fees requirements for a covered loan in Code
of Federal Regulations, title 12, sections 226.32 (a) and (b);
(b) fail to either:
(1) ensure that title to the subject dwelling has been reconveyed to the foreclosed
homeowner; or
(2) make a payment to the foreclosed homeowner such that the foreclosed homeowner has
received consideration in an amount of at least 82 percent of the fair market value of the property
within 150 days of either the eviction or voluntary relinquishment of possession of the dwelling
by the foreclosed homeowner. The foreclosure purchaser shall make a detailed accounting of
the basis for the payment amount, or a detailed accounting of the reasons for failure to make a
payment, including providing written documentation of expenses, within this 150-day period.
The accounting shall be on a form prescribed by the attorney general, in consultation with the
commissioner of commerce, without being subject to the rulemaking procedures of chapter 14.
For purposes of this provision, the following applies:
(i) there is a rebuttable presumption that an appraisal by a person licensed or certified by an
agency of the federal government or this state to appraise real estate constitutes the fair market
value of the property;
(ii) the time for determining the fair market value amount shall be determined in the
foreclosure reconveyance contract as either at the time of the execution of the foreclosure
reconveyance contract or at resale. If the contract states that the fair market value shall be
determined at the time of resale, the fair market value shall be the resale price if it is sold
within 120 days of the eviction or voluntary relinquishment of the property by the foreclosed
homeowner. If the contract states that the fair market value shall be determined at the time of
resale, and the resale is not completed within 120 days of the eviction or voluntary relinquishment
of the property by the foreclosed homeowner, the fair market value shall be determined by an
appraisal conducted during this 120-day period and payment, if required, shall be made to the
homeowner, but the fair market value shall be recalculated as the resale price on resale and
an additional payment amount, if appropriate based on the resale price, shall be made to the
foreclosed homeowner within 15 days of resale, and a detailed accounting of the basis for the
payment amount, or a detailed accounting of the reasons for failure to make additional payment,
shall be made within 15 days of resale, including providing written documentation of expenses.
The accounting shall be on a form prescribed by the attorney general, in consultation with the
commissioner of commerce, without being subject to the rulemaking procedures of chapter 14;
(iii) "consideration" shall mean any payment or thing of value provided to the foreclosed
homeowner, including unpaid rent or contract for deed payments owed by the foreclosed
homeowner prior to the date of eviction or voluntary relinquishment of the property, reasonable
costs paid to third parties necessary to complete the foreclosure reconveyance transaction, payment
of money to satisfy a debt or legal obligation of the foreclosed homeowner, or the reasonable cost
of repairs for damage to the dwelling caused by the foreclosed homeowner; or a penalty imposed
by a court for the filing of a frivolous claim under section 325N.18, subdivision 6, but
(iv) "consideration" shall not include amounts imputed as a down payment or fee to
the foreclosure purchaser, or a person acting in participation with the foreclosure purchaser,
incident to a contract for deed, lease, or option to purchase entered into as part of the foreclosure
reconveyance, except for reasonable costs paid to third parties necessary to complete the
foreclosure reconveyance;
(c) enter into repurchase or lease terms as part of the subsequent conveyance that are unfair
or commercially unreasonable, or engage in any other unfair conduct;
(d) represent, directly or indirectly, that:
(1) the foreclosure purchaser is acting as an advisor or a consultant, or in any other manner
represents that the foreclosure purchaser is acting on behalf of the homeowner;
(2) the foreclosure purchaser has certification or licensure that the foreclosure purchaser does
not have, or that the foreclosure purchaser is not a member of a licensed profession if that is untrue;
(3) the foreclosure purchaser is assisting the foreclosed homeowner to "save the house"
or substantially similar phrase; or
(4) the foreclosure purchaser is assisting the foreclosed homeowner in preventing a
completed foreclosure if the result of the transaction is that the foreclosed homeowner will not
complete a redemption of the property;
(e) make any other statements, directly or by implication, or engage in any other conduct
that is false, deceptive, or misleading, or that has the likelihood to cause confusion or
misunderstanding, including, but not limited to, statements regarding the value of the residence in
foreclosure, the amount of proceeds the foreclosed homeowner will receive after a foreclosure
sale, any contract term, or the foreclosed homeowner's rights or obligations incident to or arising
out of the foreclosure reconveyance; or
(f) do any of the following until the time during which the foreclosed homeowner may
cancel the transaction has fully elapsed:
(1) accept from any foreclosed homeowner an execution of, or induce any foreclosed
homeowner to execute, any instrument of conveyance of any interest in the residence in
foreclosure;
(2) record with the county recorder or file with the registrar of titles any document, including
but not limited to, any instrument of conveyance, signed by the foreclosed homeowner;
(3) transfer or encumber or purport to transfer or encumber any interest in the residence in
foreclosure to any third party, provided no grant of any interest or encumbrance is defeated
or affected as against a bona fide purchaser or encumbrance for value and without notice of a
violation of sections 325N.10 to 325N.18, and knowledge on the part of any such person or entity
that the property was "residential real property in foreclosure" does not constitute notice of a
violation of sections 325N.10 to 325N.18. This section does not abrogate any duty of inquiry
which exists as to rights or interests of persons in possession of the residential real property in
foreclosure; or
(4) pay the foreclosed homeowner any consideration.
History: 2004 c 263 s 17; 2007 c 106 s 9

NOTE: This section, as added by Laws 2004, chapter 263, section 17, expires December
31, 2009. Laws 2004, chapter 263, section 26.

325N.18 ENFORCEMENT.
    Subdivision 1. Remedies. A violation of sections 325N.10 to 325N.17 is considered to be a
violation of section 325F.69, and all the remedies of section 8.31 are available for such an action.
A private right of action under section 8.31 by a foreclosed homeowner is in the public interest.
    Subd. 1a. Limitation. Notwithstanding any other provision of this section, no action may be
brought on the basis of a violation of sections 325N.10 to 325N.18, except by an owner against
whom the violation was committed or by the attorney general. This limitation does not apply to
administrative action by the commissioner of commerce.
    Subd. 2. Exemplary damages. In a private right of action under section 8.31 for a violation
of section 325N.17, the court may award exemplary damages of any amount. In the event the
court determines that an award of exemplary damages is appropriate, the amount of exemplary
damages awarded shall not be less than 1-1/2 times the foreclosed homeowner's actual damages.
Any claim for exemplary damages brought pursuant to this section must be commenced within
four years after the date of the alleged violation.
    Subd. 3. Remedies cumulative. The remedies provided in this section are cumulative and
do not restrict any remedy that is otherwise available. The provisions of sections 325N.10 to
325N.18 are not exclusive and are in addition to any other requirements, rights, remedies, and
penalties provided by law. No action under this section shall affect the rights in the foreclosed
property held by a good faith purchaser for value under sections 507.34, 508.48, 508A.48, or
other applicable law.
    Subd. 4. Criminal penalty. Any foreclosure purchaser who engages in any practice which
would operate as a fraud or deceit upon a foreclosed homeowner may, upon conviction, be fined
not more than $50,000 or imprisoned not more than one year, or both. Prosecution or conviction
for any one of the violations does not bar prosecution or conviction for any other offenses.
    Subd. 5. Failure of transaction. Failure of the parties to complete the reconveyance
transaction, in the absence of additional misconduct, shall not subject a foreclosure purchaser
to the criminal penalties under section 325N.07 or 325N.18.
    Subd. 6. Stay of eviction action. (a) A court hearing an eviction action against a foreclosed
homeowner must issue an automatic stay, without imposition of a bond, if a defendant makes a
prima facie showing that the defendant:
(1) has (i) commenced an action concerning a foreclosure reconveyance; (ii) asserts a
defense under section 504B.121 that the property that is the subject of the eviction action is also
the subject of a foreclosure reconveyance in violation of sections 325N.10 to 325N.17; or (iii)
asserts a claim or affirmative defense of fraud, false pretense, false promise, misrepresentation,
misleading statement, or deceptive practice, in connection with a foreclosure reconveyance;
(2) owned the foreclosed residence;
(3) conveyed title to the foreclosed residence to a third party upon a promise that the
defendant would be allowed to occupy the foreclosed residence or other real property in which
the foreclosure purchaser or a person acting in participation with the foreclosure purchaser has
an interest and that the foreclosed residence or other real property would be the subject of a
foreclosure reconveyance; and
(4) since the conveyance, has continuously occupied the foreclosed residence or other real
property in which the foreclosure purchaser or a person acting in participation with the foreclosure
purchaser has an interest.
For purposes of this subdivision, notarized affidavits are acceptable means of proof to meet
the defendant's burden. Upon good cause shown, a defendant may request and the court may grant
up to an additional two weeks to produce evidence required to make the prima facie showing.
(b) A court may award to a plaintiff a $500 penalty upon a showing that the defendant filed a
frivolous claim or asserted a frivolous defense.
(c) The automatic stay expires upon the later of:
(1) the failure of the foreclosed homeowner to commence an action in a court of competent
jurisdiction in connection with a foreclosed reconveyance transaction within 90 days after the
issuance of the stay; or
(2) the issuance of an order lifting the stay by a court hearing claims related to the foreclosure
reconveyance.
(d) If, after the expiration of the stay or an order lifting the stay, a court finds that the
defendant's claim or defense was asserted in bad faith and wholly without merit, the court may
impose a sanction against the defendant of $500 plus reasonable attorney fees.
History: 2004 c 263 s 18; 2007 c 106 s 10

NOTE: This section, as added by Laws 2004, chapter 263, section 18, expires December
31, 2009. Laws 2004, chapter 263, section 26.