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Legislative News and Views - Rep. Carlie Kotyza-Witthuhn (DFL)

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Minnesota House unanimously passes Rep. Kotyza-Witthuhn’s bill requiring third-party notices on mortgage defaults

Thursday, March 18, 2021

St. Paul, MN - Today, the Minnesota House of Representatives passed House File 333, authored by Rep. Carlie Kotyza-Witthuhn (DFL - Eden Prairie), a piece of consumer protection legislation that would amend Minnesota's Reverse Mortgage Law to provide the opportunity to designate a third-party to receive notices of defaults. The legislation passed unanimously, 132-0.

“As reverse mortgage foreclosures rise, too many Minnesotans are in danger of losing their homes, and this simple solution will help give homeowners the proper notification they need to delay or stop the foreclosure process,” said Rep. Kotyza-Witthuhn. “Whether it’s to the children of an aging parent, or the caregivers of someone with dementia, providing mortgage notices to designated individuals will help Minnesota seniors age in place.”

This legislation allows homeowners to designate an optional third-party notification during a federally required credit counseling session before a loan servicer. If a homeowner decides to opt-in to the program, servicers are required to send those notices to the designated third-party. Homeowners also have the chance to stop the foreclosure until the servicer sends the notice to the correct individuals. In 2014, two percent of reverse mortgages resulted in a foreclosure. By 2019, the rate had increased to 18%. 

This bipartisan legislation has also advanced in the Minnesota Senate, but has yet to receive a vote on the Senate floor. Video of the floor session will be available on House Public Information Services’ YouTube channel.