1.1    .................... moves to amend H. F. No. 3477, the first engrossment, as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. Minnesota Statutes 2006, section 327.64, subdivision 2, is amended to read:
1.4    Subd. 2. Notice; service. (a) A secured party may commence repossession of a
1.5manufactured home by personally serving upon, or by sending by certified or registered
1.6United States mail to, the occupant of the mobile manufactured home a notice and, if the
1.7occupant is not the debtor, by sending a registered or certified letter to the last known
1.8address of the debtor under the security agreement, both setting forth the circumstances
1.9constituting the default under the security agreement and stating that the secured party
1.10will at the expiration of a 30-day period following receipt of the notice seek a court order
1.11removing the occupant from the manufactured home and repossessing the manufactured
1.12home, unless the debtor or the occupant acting on behalf of the debtor cures the default
1.13prior to that time and in the manner provided by section 327.66. If notice is mailed to a
1.14debtor in accordance with this subdivision, the secured party by affidavit shall set forth the
1.15circumstances causing the secured party to believe that the debtor could be reached at the
1.16address to which the notice was mailed. The affidavit shall state that the secured party
1.17has no reason to believe reliable information causing the secured party to conclude that
1.18the debtor might receive mailed notice at another address.
1.19    (b) The notice must state: "Your loan is currently in default. Contact us immediately
1.20at [insert phone number] to discuss possible options for preventing repossession. We
1.21encourage you to seek assistance from the foreclosure prevention counseling program in
1.22your area. Nearby community agencies will answer your questions, offer free advice,
1.23and help you create a plan. You can contact the Minnesota Home Ownership Center at
1.24(866) 462-6646 or www.hocmn.org to get the phone number and location of the nearest
1.25foreclosure prevention organization. Call today. Waiting limits your options. If you do not
1.26become current on your loan within 30 days, we will seek a court order repossessing the
1.27home, and by court order you will have to vacate the home."
2.1    (c) If the debtor does not sign for the registered or certified letter containing the
2.2notice within five calendar days of the first attempted delivery, the secured party may
2.3proceed with all permissible actions provided in statute as though the debtor's signature
2.4has been secured.

2.5    Sec. 2. Minnesota Statutes 2006, section 327.65, is amended to read:
2.6327.65 COURT ORDER.
2.7    Except in cases of voluntary repossession, upon expiration of the 30-day period
2.8specified in the notices required by section 327.64, a secured party must apply to the
2.9district court in the county in which the manufactured home is located for an order
2.10pursuant to chapter 565 directing the seizure and delivery of the manufactured home. The
2.11application shall be accompanied by a copy of the security agreement entitling the secured
2.12party to repossession of the manufactured home, a copy of the notices required under
2.13sections 327.64 and 327.665, and by the an affidavit required by section 327.64 if notice is
2.14mailed to the debtor of service stating that the notices required under sections 327.64 and
2.15327.665 were properly served upon the occupant, and if the occupant of the home is not
2.16the debtor, the debtor. The notices required by section sections 327.64 and 327.665 shall
2.17not be considered as satisfying any of the notice requirements under chapter 565.

2.18    Sec. 3. [327.651] VOLUNTARY REPOSSESSION.
2.19    The secured party and the debtor and occupant, if the debtor is not the occupant, may
2.20agree in writing on a voluntary surrender of the title and possession of the manufactured
2.21home to the secured party prior to or after the end of the 30-day period specified under
2.22section 327.64. The secured party may file the agreement and any other documents
2.23necessary to transfer the title in the manner required under chapter 336. When this
2.24provision is exercised, notice under 327.64, subdivision 3 is not applicable.

2.25    Sec. 4. Minnesota Statutes 2006, section 327.66, is amended to read:
2.26327.66 CURE OF DEFAULT.
2.27    A debtor, or an occupant of a manufactured home acting on behalf of a debtor, may
2.28within the 30 day period specified in the notices required by section 327.64, cure a default
2.29by tendering full payment of the sums then in arrears under the terms of the security
2.30agreement, or by otherwise remedying the default, and by paying the reasonable costs,
2.31not to exceed the sum of $15 $100, incurred by the secured party to enforce the security
2.32agreement. Cure of a default in accordance with the provisions of this section shall
2.33suspend the secured party's right to seek repossession of the manufactured home under the
2.34provisions of sections 327.61 to 327.67.

3.1    Sec. 5. [327.665] REINSTATEMENT.
3.2    Subdivision 1. Right to reinstate. (a) If the debtor does not cure the default within
3.3the 30-day period specified in 327.66, the secured party must send a registered or certified
3.4letter to the occupant of the home and, if the debtor is different than the occupant, the
3.5debtor, stating that the debtor has thirty days to reinstate the loan by paying the defaulted
3.6amount plus additional allowable fees incurred by the secured party in order to regain
3.7possession of the home.
3.8    (b) If the debtor does not sign for the registered or certified letter containing the
3.9notice within five calendar days of the first attempted delivery, the secured party may
3.10proceed with all permissible actions provided in statute as though the debtor's signature
3.11had been secured.
3.12    Subd. 2. Required notice; contents of notice. The notice shall contain, at a
3.13minimum, the following information:
3.14    (1) the name of the secured party, the debtor, each current assignee of the loan, if
3.15any, and the original or maximum principal amount secured by the loan;
3.16    (2) the date of the loan;
3.17    (3) the amount in arrears on the loan as of the date of the notice;
3.18    (4) a description of the manufactured home upon which the loan is secured,
3.19conforming substantially to that contained in the loan documents;
3.20    (5) the amount of allowable fees incurred by the secured party in order to regain
3.21possession of the home prior to the court order; and
3.22    (6) the notice must also state: "Your manufactured home is currently being
3.23repossessed. Contact us immediately at [insert phone number] to discuss possible options
3.24for reinstating your loan. We encourage you to seek counseling with the foreclosure
3.25prevention counselor in your area. Nearby community agencies will answer your
3.26questions, offer free advice and help you create a plan. You can contact the Minnesota
3.27Home Ownership Center at 866-462-6646 or www.hocmn.org to get the phone number
3.28and location of the nearest counseling organization. Call today. Waiting limits your
3.29options. If you do not become current on your loan within 30 days, including any
3.30additional fees, you will no longer be entitled to reinstate your loan. We are seeking a
3.31court order repossessing the home and, by court order you will have to vacate the home."
3.32    Subd. 3. Action to repossess; termination of action. At any time after the
3.33expiration of the 30-day period required under section 327.64, the creditor may proceed
3.34with a court action under section 327.65, so long as the right to reinstate has not been
3.35exercised. The exercise of the right to reinstatement in accordance with the provisions of
3.36this section shall suspend the secured party's right to seek repossession of the manufactured
4.1home under the provisions of sections 327.61 to 327.67 and shall immediately terminate
4.2any court action filed pursuant to sections 327.61 to 327.67 or section 565.
4.3    Subd. 4. Allowable costs. For the purposes of this section, allowable costs that can
4.4be recovered include insurance, delinquent taxes, if any, upon the premises, interest to
4.5date of payment, cost services of process or notices, filing fees, attorney's fees not to
4.6exceed $150 or one-half of the attorney's fees authorized by section 582.01, whichever is
4.7greater, together with other lawful disbursements necessarily incurred in connection with
4.8the proceedings by the party repossessing.

4.9    Sec. 6. Minnesota Statutes 2006, section 327B.01, is amended by adding a subdivision
4.10to read:
4.11    Subd. 2a. Borrower. "Borrower" means a person or persons applying for or
4.12obtaining a manufactured home loan.

4.13    Sec. 7. Minnesota Statutes 2006, section 327B.01, is amended by adding a subdivision
4.14to read:
4.15    Subd. 4b. Churning. "Churning" means knowingly or intentionally making,
4.16providing, or arranging for a manufactured home loan when the new manufactured home
4.17loan does not provide a reasonable, tangible net benefit to the borrower considering all of
4.18the circumstances, including the terms of both the new and refinanced loans, the cost of
4.19the new loan, and the borrower's circumstances.

4.20    Sec. 8. Minnesota Statutes 2006, section 327B.01, is amended by adding a subdivision
4.21to read:
4.22    Subd. 13b. Manufactured home loan. "Manufactured home loan" means a loan
4.23made to a person or persons for the purchase, refinancing, improvement, or repair of a
4.24manufactured home.

4.25    Sec. 9. Minnesota Statutes 2006, section 327B.01, is amended by adding a subdivision
4.26to read:
4.27    Subd. 14b. Negative amortization. "Negative amortization" occurs when the
4.28borrower's compliance with any repayment option offered pursuant to the terms of the
4.29manufactured home loan is insufficient to satisfy the interest accruing on the loan,
4.30resulting in an increase in the loan balance. Negative amortization does not occur when a
4.31manufactured home loan is originated, subsidized, or guaranteed by or through a state,
4.32tribal, or local government, or nonprofit organization, and bears one or more of the
4.33following nonstandard payment terms that substantially benefit the borrower:
5.1    (1) payments vary with income;
5.2    (2) payments of principal and interest are deferred until the maturity date of the
5.3loan or the sale of the residence;
5.4    (3) principal or interest is forgivable under specified conditions; or
5.5    (4) where no interest or an annual interest rate of two percent or less is charged
5.6in connection with the loan, and excludes existing loan modifications and payment
5.7extensions mutually agreed upon by the secured party and debtor.

5.8    Sec. 10. Minnesota Statutes 2006, section 327B.08, is amended by adding a
5.9subdivision to read:
5.10    Subd. 6. Duty of agency. (a) A person acting as a broker shall be considered to
5.11have created an agency relationship with the borrower in all cases and shall comply with
5.12the following duties:
5.13    (1) brokers shall reasonably act:
5.14    (i) in the borrower's best interest;
5.15    (ii) in the utmost good faith toward borrowers; and
5.16    (iii) so as not to compromise a borrower's right or interest in favor of another's right
5.17or interest, including a right or interest of the broker. A broker shall not accept, give, or
5.18charge any undisclosed compensation or realize any undisclosed remuneration, either
5.19through direct or indirect means, that inures to the benefit of the broker on an expenditure
5.20made for the borrower;
5.21    (2) brokers shall carry out all lawful instructions given by borrowers;
5.22    (3) brokers shall disclose to borrowers all material facts of which the broker has
5.23knowledge which might reasonably affect the borrower's rights, interests, or ability to
5.24receive the borrower's intended benefit from the manufactured home loan, but not facts
5.25which are reasonably susceptible to the knowledge of the borrower;
5.26    (4) brokers shall use reasonable care in performing duties; and
5.27    (5) brokers shall account to a borrower for all the borrower's money and property
5.28received as an agent.
5.29    (b) The duty of agency does not attach to a broker who is:
5.30    (1) a dealer or retailer;
5.31    (2) a limited dealer or retailer;
5.32    (3) licensed as a sales finance company as defined under section 53C.01, subdivision
5.3312;
5.34    (4) employed by:
5.35    (i) a manufactured home lender;
6.1    (ii) a dealer or retailer;
6.2    (iii) a limited dealer or retailer; or
6.3    (iv) a licensed sales finance company as defined under section 53C.01, subdivision
6.412;
6.5    (5) a person who has an exclusive contract to act as a broker for:
6.6    (i) a manufactured home lender;
6.7    (ii) a dealer or retailer;
6.8    (iii) a limited dealer or retailer; or
6.9    (iv) a licensed sales finance company as defined under section 53C.01, subdivision
6.1012.
6.11    (c) Nothing in this section prohibits a broker who is bound by the duty of agency
6.12from contracting for or collecting a reasonable fee for services rendered and which had
6.13been disclosed to the borrower in advance of the provision of such services.
6.14    (d) Nothing in this section requires a broker who is bound by the duty of agency to
6.15obtain a loan containing terms or conditions not available to the broker in the broker's
6.16usual course of business, or to obtain a loan for the borrower from a manufactured home
6.17loan lender with whom the broker does not have a business relationship.

6.18    Sec. 11. Minnesota Statutes 2006, section 327B.09, is amended by adding a subdivision
6.19to read:
6.20    Subd. 6. Standards of conduct. (a) No manufactured home lender shall:
6.21    (1) charge a fee for a product or service where the product or service is not actually
6.22provided, or misrepresent the amount charged by or paid to a third-party for a product
6.23or service;
6.24    (2) make or cause to be made, directly or indirectly, any false, deceptive, or
6.25misleading statement or representation in connection with a manufactured home loan
6.26transaction, including, without limitation, a false, deceptive, or misleading statement or
6.27representation regarding the borrower's ability to qualify for any manufactured home
6.28loan product;
6.29    (3) issue any document indicating conditional qualification or conditional approval
6.30for a manufactured home loan, unless the document also clearly indicates that final
6.31qualification or approval is not guaranteed, and may be subject to additional review;
6.32    (4) make or assist in making any manufactured home loan without verifying the
6.33reasonable ability of the borrower to repay the loan, taking into consideration taxes and
6.34insurance in connection with the manufactured home;
7.1    (5) make, provide, or arrange for a manufactured home loan for a higher interest rate
7.2or on less favorable terms than the rate or terms for which the borrower qualifies based on
7.3criteria typically used by that lender to evaluate rate and term offerings;
7.4    (6) make, provide, or arrange for a manufactured home loan all or a portion of the
7.5proceeds of which are used to fully or partially pay off a "special loan" unless the borrower
7.6has obtained a written certification from an authorized independent loan counselor that
7.7the borrower has received counseling on the advisability of the loan transaction. For
7.8the purposes of this section, "special loan" means a loan for the purchase, refinance,
7.9improvement, or repair of the manufactured home originated, subsidized, or guaranteed
7.10by or through a state, tribal, or local government, or nonprofit organization, that bears
7.11one or more of the following nonstandard payment terms, which substantially benefit
7.12the borrower:
7.13    (i) payments vary with income;
7.14    (ii) payments of principal or interest are not required or can be deferred under
7.15specified conditions;
7.16    (iii) principal or interest is forgivable under specified conditions; or
7.17    (iv) where no interest or an annual interest rate of two percent or less is charged in
7.18connection with the loan. For the purposes of this section, "authorized independent loan
7.19counselor" means a nonprofit, third-party individual or organization providing homebuyer
7.20education programs, foreclosure prevention services, loan counseling, or credit counseling
7.21certified by the United States Department of Housing and Urban Development, the
7.22Minnesota Home Ownership Center, the Minnesota Mortgage Foreclosure Prevention
7.23Association, AARP, or NeighborWorks America.
7.24    (7) engage in churning; or
7.25    (8) make, provide, or arrange for a manufactured home loan if the borrower's
7.26compliance with any repayment option offered under the terms of the loan will result in
7.27negative amortization during any six-month period. This excludes existing loan extensions
7.28and modifications.
7.29    (b) This subdivision does not apply to a state or federally chartered bank, savings
7.30bank, or credit union, an institution chartered by Congress under the Farm Credit Act,
7.31or to a person making, providing, or arranging a manufactured home loan originated or
7.32purchased by a state agency or a tribal or local unit of government.

7.33    Sec. 12. [327B.095] INTEREST, POINTS, FINANCE CHARGES, FEES, AND
7.34OTHER CHARGES.
8.1    Subdivision 1. Financed interest, points, finance charges, fees, and other
8.2charges. (a) A manufactured home lender making or modifying a manufactured home
8.3loan to a borrower located in this state must not include in the principal amount of any
8.4loan, all or any portion of any lender fee in an aggregate amount exceeding:
8.5    (1) five percent of the loan amount for loans over $60,000;
8.6    (2) six percent of the loan amount for loans less than $60,000, but greater than or
8.7equal to $40,000; or
8.8    (3) eight percent of the loan amount for loans of less than $40,000.
8.9    (b) "Lender fee" means interest, origination points, finance charges, fees, and other
8.10charges payable in connection with the manufactured home loan:
8.11    (1) by the borrower to any manufactured home lender or broker or to any assignee of
8.12any manufactured home lender or broker; or
8.13    (2) by the lender to a broker.
8.14    (c) Lender fee does not include discount points, provided there is a concomitant
8.15benefit to the borrower, recording fees, taxes, passthroughs, or other amounts that are paid
8.16by any person to any government entity, filing office, or other third party that is not a
8.17manufactured home lender or broker or to any assignee of any manufactured home lender
8.18or broker. Lender fee also does not include any amount that is set aside to pay taxes or
8.19insurance on any property securing the manufactured home loan.
8.20    (d) "Loan amount" means:
8.21    (1) for a line of credit, the maximum principal amount of the line of credit; and
8.22    (2) for any other manufactured home loan, the principal amount of the loan,
8.23excluding all interest, points, finance charges, fees, and other charges.
8.24    (e) A manufactured home lender or broker shall not charge, receive, or collect any
8.25excess financed interest, points, finance charges, fees, or other charges described in this
8.26subdivision, or any interest, points, finance charges, fees, or other charges with respect
8.27to this excess.
8.28    Subd. 2. Prepayment penalties. No manufactured home loan may contain a
8.29provision requiring or permitting the imposition of a penalty, fee, premium, or other
8.30charge in the event the manufactured home loan is prepaid in whole or in part unless the
8.31penalty, fee, premium, or other charge constitutes consideration for an equal or greater
8.32benefit to the borrower.
8.33    Subd. 3. Exemption. This section does not apply to a manufactured home loan
8.34originated by a federal or state chartered bank, savings bank, or credit union.

8.35    Sec. 13. Minnesota Statutes 2006, section 327B.12, is amended to read:
9.1327B.12 ADDITIONAL REMEDIES AND ENFORCEMENT.
9.2    Subdivision 1. Private remedies. (a) Any person injured or threatened with injury
9.3by a dealer or manufacturer's violation of sections 327B.01 to 327B.12 may bring a private
9.4action in any court of competent jurisdiction.
9.5    (b) A borrower injured by a violation of the standards, duties, prohibitions, or
9.6requirements of sections 327B.08, subdivision 6; 325B.09, subdivision 6; or 325B.095
9.7shall have a private right of action and the court shall award actual, incidental, and
9.8consequential damages.
9.9    Subd. 2. Fraud remedies. In addition to the remedies provided in sections 327B.01
9.10to 327B.12, any violation of section 327B.08 or 327B.09 is a violation of section 325F.69,
9.11subdivision 1 and the provisions of section 8.31 shall apply. A private right of action by
9.12the borrower under this chapter is in the public interest.
9.13    Subd. 3. Application to certain lenders. A lender who is licensed as a sales
9.14finance company as defined under section 53C.01, subdivision 12, and who violates the
9.15standards, duties, prohibitions, or requirements of sections 327B.08, subdivision 6;
9.16325B.09, subdivision 6; or 325B.095, is subject only to the remedies provided under
9.17section 53C.12."
9.18Amend the title accordingly