Federal Regulatory and Delaware and Minnesota Legislative Update

Federal Regulatory and Delaware and Minnesota Legislative Update

The Consumer Financial Protection Bureau (the “Bureau”) issued a final rule effective June 1, 2013, addressing prohibitions on financing credit insurance premiums under Regulation Z.  The Delaware legislature amended its foreclosure laws effective May 28, 2013.  The Minnesota legislature recently amended its laws governing mortgage registry and deed taxes effective July 1, 2013.


78 FR 32547



Our April 11, 2013 Federal Regulatory Update referred to certain regulations which are effective June 1, 2013.  The Bureau is delaying the June 1, 2013 effective date of the prohibition on lenders financing credit insurance premiums in connection with certain consumer credit transactions secured by a dwelling to be January 10, 2014.



During the extended time, the Bureau will consider addressing interpretive questions regarding the prohibition’s applicability to transactions other than those in which a lump-sum premium is added to the loan amount at consummation.



The Bureau stated that the final rule will not have a significant economic impact on a substantial number of small entities.





The accounting of the mortgage obligation for the 12 months prior to the date of the alleged default must include a certification by the lender, or the servicer sending notice on their behalf, that the information contained in the accounting is true and accurate to the best of its knowledge as of the date provided and that the information provided has been relied upon as the basis for the claim of default.  Where a servicer provides the certification instead of the lender, the servicer must also identify itself as such and recite in such certification its authority to act on behalf of the lender.  Each certification must include the case caption.



A mediation fee must be paid by the lender within 30 days after the E-filing of a completed Certificate of Participation, and is in addition to any other filing fees required by law.  Previously, the mediation fee was required to be paid by the lender before the date for which the initial mediation conference was scheduled.  The Superior Court or its delegatee may in its discretion reschedule any scheduled mediation conference where the mediation fee is overdue until the mediation fee has been paid.



Where a bankruptcy petition has been filed, mediation must not continue unless either:

  • The automatic stay has been lifted or modified with respect to the borrower’s mortgage obligation to the lender; or
  • Mediation is permitted to proceed according to an order or directive of a Bankruptcy Court.


A mediation record, resulting from the conclusion of a mediation conference, must state, if applicable, that mediation is not permitted to continue.



Where the mediation process has previously been cancelled as the result of the filing of a bankruptcy petition but is subsequently permitted to proceed, the lender must request that a mediation conference be scheduled and a judgment must not be entered in the foreclosure action until the day after the date of the new mediation conference.



The provisions requiring a loss mitigation affidavit apply to mortgage foreclosure actions commenced from September 21, 2011 to September 21, 2017 (previously September 21, 2013).



The Residential Mortgage Foreclosure Program has been extended until January 19, 2018 (originally applied until January 19, 2014).



The Office of Foreclosure Prevention and Financial Education will continue to exist until September 21, 2017 (previously September 21, 2013).



The following provisions have been deleted from the foreclosure laws:


The Superior Court or its delegate may create procedures to allow lenders to pre-schedule mediation conferences in connection with the filing of a complaint, in which case the mediation scheduling notice must be attached to the notice of foreclosure mediation.





For deeds and mortgages acknowledged on or after July 1, 2013, for properties located in Hennepin County and Ramsey County, the county may impose an additional mortgage registry tax and an additional deed tax as provided under Minnesota law.  The authority to impose such taxes expires on January 1, 2028 (previously January 1, 2013).