Minnesota Statutes 48.21 – Real Estate; Restrictions On Holding
Subdivision 1.Specific restrictions.
(a) A bank may purchase, carry as an asset, and convey real estate only:
Terms Used In Minnesota Statutes 48.21
- Contract: A legal written agreement that becomes binding when signed.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
(1) as provided for in section 47.10;
(2) if acquired through foreclosure of a mortgage given to it in good faith as security for loans made by or money due to it;
(3) if conveyed to it in satisfaction of debts previously contracted in good faith in the course of its dealings;
(4) if acquired by sale on execution or judgment of a court in its favor; or
(5) if reasonably necessary to mitigate or avoid loss on a loan or investment theretofore made.
(b) Real estate acquired under paragraph (a), clauses (2) to (5), shall be carried as an asset only in accordance with rules the commissioner prescribes. The maximum period for holding other real estate as an asset shall be five years, provided that upon application to the commissioner, the commissioner may approve the possession of such real estate by a bank for a period longer than five years, but not to exceed an additional five years, if:
(1) the bank has made a good faith attempt to dispose of the real estate within the initial five-year period; or
(2) disposal within the initial five-year period would be detrimental to the bank.
Subd. 2.Real estate holdings not bank liabilities.
Real estate owned by a bank as a result of actions authorized in subdivision 1, paragraph (a), clauses (2) to (5), and subsequently sold to any buyer on a contract for deed may not be considered creating a liability to a bank for purposes of section 48.24.
Subd. 3.Real estate holdings not sold; authority to write off.
Notwithstanding any rules of the commissioner to the contrary, if real estate owned by a bank pursuant to subdivision 1, paragraph (a), clauses (2) to (5), is not sold or otherwise disposed of within the maximum period, the bank may write off any remaining balance at a rate not less than one-fifth of that balance each subsequent calendar year.