Prohibiting simultaneous foreclosure during loan modifications


Earlier this session, several homeowners told lawmakers how their mortgage lenders began to foreclose on their homes while processing a loan modification at the same time. Under a bill awaiting the governor’s action, that practice of “dual tracking” would be prohibited.

HF1377/ SF1276* would give homeowners an opportunity for a modification, if they are eligible, and would prevent foreclosure while they are going through the modification process.

Rep. Melissa Hortman (DFL-Brooklyn Park) and Sen. Patricia Torres Ray (DFL-Mpls) sponsor the bill, which the House passed 123-0 on Sunday. The Senate passed it 61-1 on May 16.

“It’s a nice bill and a good step in the right direction,” said Rep. Joe Hoppe (R-Chaska).

Rep. Mike Freiberg (DFL-Golden Valley) sponsored a similar bill, HF83, which would have required mandatory mediation unless the homeowner opted out. Rep. Raymond Dehn (DFL-Mpls) said he would like to have seen that provision in the bill that passed.

The bill would apply to residential property with no more than four family dwellings. The prohibition on dual tracking would begin Oct. 31, 2013.