In November, 2006, Kathleen Mayer borrowed $160,000 from the bank secured by a mortgage on her home, getting $141,000 “cash out” on the refi and then defaulted on the loan less than 6 months later. Foreclosure came and went; the homeowner (her lawyer, really) waited until the very last day in the six-month redemption period and then filed suit to avoid being kicked out of her house, claiming that she had rights under Minnesota law, the Farmer Lender Mediation Act.
In his opinion today granting summary judgment to the lender, U.S. District Court Judge James Rosenbaum (D. Minn.) begins by pointing out that, in 1986, the Minnesota legislature passed legislation to help out farmers in situations of foreclosure. But the law is explicitly limited to those farming more than 60 acres and “actively” engaged in farming. “Hobby farmers” need not apply. Plaintiff’s farm was on seven acres and she leased the land for farming.
Judge Rosenbaum therefore found that Plaintiff failed on both prerequisites. “Plaintiff has contrived a theory under which her former home and acreage is a farm subject to the [Farmer Lender Mediation Act]. The Court discerns no substance to her theory.”
“Plaintiff asks the Court to include an adjoining 55-acre tract not subject to the mortgage. She claims this land is owned by a trust for the benefit of her children. The Court cannot find any legal or equitable reason why it should engraft other property to create a fictitious 60-plus acre farm.”
Finally, plaintiff, in response to the lender’s motion, for the first time raised defenses of fraudulent inducement and rescission under the Truth-in-Lending Act. The Court could have rejected these arguments simply by virtue of plaintiff’s failure to have raised them earlier. He didn’t. Rather, the Court addressed the merits of the arguments and rejected them on the merits.