Minnesota Legislative and Montana and New York Regulatory Update

Minnesota Legislative and Montana and New York Regulatory Update

The Minnesota legislature amended its foreclosure laws, effective April 23, 2013.  The Department of Administration of the State of Montana amended its rules under the Consumer Loan Act (the “Act”) effective April 26, 2013.  The New York Department of Financial Services has extended emergency regulations related to the servicing of mortgage loans.




A “foreclosure consultant” does not include a person licensed as a residential mortgage originator or servicer.  However, any person operating under a mortgage originator license that negotiates or offers to negotiate the terms of an existing residential mortgage loan is subject to all of the provisions of the Foreclosure Consultant Contracts Rescissions provisions of Minnesota foreclosure law except for the civil and criminal penalty provision.





Every applicant for a license under the Act must file with the Montana Consumer Loan Commissioner in duplicate, at the time of filing an application for such license, a full and accurate schedule of all charges, fees, and rate(s) of interest (previously costs) to be exacted in connection with any and all loans to be made by such applicant and the method of computing the same.



Licensees must observe the following procedures in computing interest:

  • Interest must be computed at the applicable rate on the balance of the loan from the date of the previous payment to the date of the following payment; and
  • Licensees must compute interest using a 365-day year, or in the case of a leap year, a 366-day year, and by counting the actual number of days from one payment to the next.


A borrower who defaults in one or more payments may be subject to a penalty of the greater of $15 or 5% of the amount past due, not to exceed $ 50.



The following provision has been deleted:


When the first payment on any such contract may be due on a date beyond a calendar month as defined above, licensees will be permitted to make an additional charge for the number of days in excess of 30 or of one calendar month from the date of loan, whichever is less.  The number of days in excess will be at the daily rate for actual number of days.



All the provisions related to computing prepayment refunds under the rule of 78ths were deleted.





Our August 23, 2010, December 8, 2010, March 24, 2011, May 20, 2011, August 23, 2011, November 18, 2011, January 25, 2012, May 8, 2012, August 15, 2012, December 3, 2012, and January 17, 2013 Compliance Memoranda discussed New York Emergency Regulations addressing the servicing of mortgage loans, which were effective October 1, 2010, November 1, 2010, February 1, 2011, May 2, 2011, July 22, 2011, October 20, 2011, January 17, 2012, April 17, 2012, July 12, 2012, October 7, 2012, and December 13, 2012 respectively.  The New York Financial Services Department recently extended the Emergency Regulations through June 25, 2013.