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Editor's Note: Previously Art. IV, Tribal Mortgage Lending, adopted 10-19-2006 by Ord. No. 06-28, in Ch. 138, Leases and Mortgages. Chapter 138 was amended in its entirety by the Legislature of the Menominee Indian Tribe December 1, 2016, by Ord. No. 16-27, but the substantive language of the previous named Art. IV, Tribal Mortgage Lending, did not change and became Art. VIII in the newly amended Ch. 138. Chapter 138 was amended in its entirety on 3-21-2019 by Ord. No. 18-38; no amendments were made to this article except for renumbering.
The Menominee Tribe enacts this Tribal Mortgage Lending Ordinance
("this article") for the purpose of encouraging home ownership on
trust or restricted lands within the Tribe's jurisdiction by
members of the Tribe. This article is intended, and shall be construed,
to provide prompt and effective remedies to lenders upon default of
any loan secured by a mortgage on a Tribal member's interest
in a lease on trust or restricted lands while at the same time protecting
the rights of members by providing due process and permitting the
recovery of the member's equity and protecting the sovereignty
of the Tribe by assuring the Tribe's right to prevent alienation
of trust lands to anyone other than a member of the Tribe.
Article III shall apply to the Wisconsin Housing and Economic Development Authority (WHEDA) Home Mortgage Program, Home Plus Program and such other WHEDA programs as may be approved by tribal law, resolution or ordinance.
A.
Recording of mortgages by Recording Clerk.
(1)
The Recording Clerk shall record each mortgage or other document
in a log, which shall contain, at a minimum, the following information:
(a)
The name(s) of the mortgagor of each mortgage, identified as
such;
(b)
The name(s) of the mortgagee of each mortgage, identified as
such;
(c)
The name(s) of the grantor(s), grantee(s) or other designation
of each party named in any other documents received for recordation;
(d)
The date and time of the receipt;
(e)
The filing number to be assigned by the Recording Clerk, which
shall be a unique number for each mortgage or other document received
for filing; and
(f)
The name of the Recording Clerk or designee receiving the mortgage
or document.
(2)
The Recording Clerk shall endorse the following information from
the log upon any mortgage or other document received for recording:
(3)
The Recording Clerk shall make a true and correct copy of the endorsed
mortgage or other document and shall certify the copy.
(4)
Post-recording procedures.
(a)
The Recording Clerk shall maintain a public tract index where
copies or images of all certified mortgages or other documents recorded
against a leased premises are located and may be retrieved by a search
based on the legal description of the leased premises.
(b)
The Recording Clerk shall send the original mortgage for filing
with the Land Titles and Records Office of the BIA in accordance with
Title 25 of the Code of Federal Regulations and shall obtain approval
of the Secretary of the mortgage or other document if required by
federal law and such approval has not be granted in the lease or mortgage.
(c)
If, following recording by BIA, the original mortgage is returned
to the Recording Clerk, the Recording Clerk shall retain a copy of
the endorsed, BIA-recorded mortgage or other document and transmit
the original to the mortgagee or person who delivered the document
for recording to the Recording Clerk.
(5)
Copies of the certified mortgage and other documents and the log
shall be made available for public inspection and copying. The Recording
Clerk shall establish rules for copying and may assess reasonable
charges therefor.
(6)
Upon the mortgagee's commencement of a foreclosure action or
application for the appointment of a receiver in connection with an
assignment of a leasehold interest in lieu of foreclosure, the Recording
Clerk shall not accept any other mortgage or other document for recording
until the leasehold interest has been transferred according to the
terms of this article.
A.
The priority of the lien of a mortgage or other document shall be
determined by the date and time it was received by the Recording Clerk
for recording (unless the mortgage or other document expressly states
that it is made subordinate to other liens). That priority shall be
superior to all subordinate liens other than liens for tribal taxes.
B.
Notwithstanding the date and time endorsed on the mortgage, the log
shall definitively establish the date and time a mortgage or other
document is received for recording.
C.
The validity of a mortgage or other document shall be determined
by federal and tribal law.
At any time after a default, the mortgagor may enter into a
written assignment of leasehold interest in lieu of foreclosure, subject
to the following provisions:
A.
Thirty days shall have expired after the mortgagee has given the
Tribe written notice of the lessor's option and the Tribe, as
lessor, has not exercised the same.
B.
The assignment shall contain the mortgagor's warranty that the
mortgagor, in good faith, believes that the value of the leasehold
interest is equal to or less than the amount currently due, or to
become due after a foreclosure, under the mortgage and the mortgagee
shall release the mortgagor from the obligation to repay the note.
The mortgagee may petition the Tribal Court to appoint a receiver,
who shall be the Tribe unless otherwise agreed to by the mortgagee
and the Tribe, to receive title to the leasehold interest and to liquidate
it in accordance with the provisions of this article. Such petition
shall include a copy of the assignment and shall be served on the
mortgagor and the Tribe. The order appointing the receiver shall assign
the leasehold interest to the receiver, with a right to sell the leasehold
interest at private sale or rent the leased premises subject to the
same conditions as provided in this article for a foreclosure.
A.
Satisfactions of conditions prior to commencing foreclosure.
(1)
Mortgagee shall provide all written notices and take such other actions
as may be required by the note and mortgage prior to commencing foreclosure.
(2)
Lessor's option.
(a)
Upon the expiration of any right to cure provided in the mortgage,
the mortgagee shall provide a written notice to the Tribe, as lessor,
that:
[1]
Identifies the lessee, the address of the leased premises, and
the amount due under the note and mortgage (including principal, interest,
costs and fees, including reasonable attorney fees); and
[2]
Offers to assign the lender's interest in the note, mortgage
and any other documents, judgments or orders to the lessor upon payment
in full of the outstanding obligations.
(b)
Lender shall not accept any assignment of leasehold interest
in lieu of foreclosure or commence a foreclosure action until 30 days
after the delivery of such notice.
(c)
Upon receipt of such notice, the Tribe may, but is under no
obligation, pay to the lender the amounts due under the note and mortgage.
The Tribe may exercise the lessor's option at any time prior
to the sale or transfer of the leasehold interest to a member or a
tribal housing entity under this article's foreclosure provisions.
Upon payment of such amounts, the lender shall take all such action,
and execute all such documents, as may be necessary to immediately
transfer all of its interests to the lessor. Thereafter, the Tribe
shall have the same rights as the lender hereunder. No merger of title
of the Tribe shall occur until the note is paid in full.
B.
Complaint. Upon fulfillment of the conditions to commencing a foreclosure,
the mortgagee may commence a foreclosure action by filing a verified
complaint, which shall include:
(1)
The name of the mortgagor and each person or entity claiming an interest
in the leasehold interest, including each subordinate lienholder (except
for the Tribe with respect to a claim for tribal taxes), as a defendant;
(2)
A description of the leased premises; a concise statement of the
facts concerning the execution of the mortgage and the lease, if applicable;
the facts concerning the recording of the mortgage; the facts concerning
the alleged default(s) of the mortgagor; and such other facts as may
be necessary to constitute a cause of action;
(3)
True and correct copies of each note, mortgage, deed of trust or
other recorded real property security instrument, lease (if applicable)
and any assignment of any of these documents; and
C.
Service of process. A copy of the summons and complaint shall be
served on all defendants and the Tribe in accordance with Menominee
Tribal Court Rules of Civil Procedure.
D.
Receiver; appointment, duties and responsibilities.
(1)
In addition to appointing a receiver upon petition of the mortgagee
in connection with an assignment of leasehold interest in lieu of
foreclosure, the Tribal Court shall appoint a receiver upon commencement
of a foreclosure action and shall have the authority to prevent waste
from occurring on the lease premises during the pendency of the proceeding.
(2)
Except as otherwise agreed by the Tribe pursuant to a memorandum
of understanding or other agreement with a mortgagee, the receiver
shall be the Tribe. The receiver shall have the authority to hire
such professionals as directed by the mortgagee to manage and secure
the leased premises.
(3)
The receiver shall be an officer of the Court and shall be immune
from all liability except that arising from its own negligence or
willful acts. All contracts for services entered into by the receiver
shall be satisfied solely from the proceeds from the sale or rental
of the leased premises or shall be advanced by the mortgagee.
(4)
The Tribal Court shall discharge the receiver when the leased premises
are sold and the proceeds are distributed according to this article.
E.
Judgment and remedy. A foreclosure action shall be heard and decided
in a prompt and reasonable time period not to exceed 60 days from
the date of service of the complaint on the defendants. If the mortgagor
has no defense to the foreclosure and has not reinstated the mortgage
(if such right is allowed under the mortgage) and the Tribal Court
finds for the plaintiff, the Tribal Court shall enter judgment:
(1)
Foreclosing the interest of the mortgagor, other defendants and anyone
else acquiring an interest in the leased premises after the commencement
of the foreclosure action.
(2)
Assigning title to the leasehold interest to the receiver, with authority
to sell the leasehold interest or rent the leased premises.
(3)
Granting a writ of restitution to the receiver to immediately remove
the defendants and all other occupants and their property from the
leased premises.
(4)
Ordering a public sale and advertising the terms of such sale in
a newspaper or other communication distributed by the Tribe to its
members (if such exists) and posting the notice on the leased premises
and in the Tribal Headquarters.
(5)
Providing for the distribution of any funds in excess of the amounts
due to the mortgagee to the subordinate lienholders (if any) in order
of lien priority and then to the mortgagor.
(6)
Requiring that all sales of the leasehold interest be made only to
a member, the Tribe, or the Tribal Housing.
(7)
Providing that the leased premises may be rented prior to a sale,
with preference being given to financially qualified members, the
Tribe and the Tribal Housing.
(8)
Providing that if no financially qualified members, the Tribe and
the Tribal Housing rents the leased premises within 60 days of its
being offered for rental, for initial and renewal periods not exceeding
one year, with preference to re-rent the leased premises being granted
to financially qualified members, the Tribe or a Tribal Housing upon
the expiration of each renewal period.
(9)
Awarding monetary damages to the plaintiff for damages caused to
the leased premises in excess of ordinary wear and tear.
F.
Rights of the mortgagee. Subject to this article and the terms of
the mortgage, a mortgagee has the following rights in connection with
an assignment of leasehold interest in lieu of foreclosure or a foreclosure
judgment:
(1)
The receiver shall follow the directions of the mortgagee in setting
the terms of, and conducting, a public or private sale and the acceptance
of any offer to buy the property, subject to the following:
(2)
The mortgagee need not accept any offer at the public sale other
than a bona fide cash offer, to be paid within 45 days of the public
sale, in an amount equal to or greater than the amount due on the
judgment, plus all accrued interest and expenses to date of sale.
(3)
If no offer is accepted at the public sale, the receiver may sell
the leasehold interest at private sale; the mortgagor shall have no
interest in the proceeds, and all proceeds, including any proceeds
in excess of the amount due under the judgment, shall be paid to the
mortgagee.
(4)
The receiver shall follow the directions of the mortgagee in renting
the leased premises, subject to the following:
(a)
All rental agreements shall be in a form and substance satisfactory
to the mortgagee.
(b)
All renters shall be provided with a copy of the lease and shall
agree, in writing, to be bound by the terms thereof.
(c)
All rental proceeds shall be paid to the mortgagee and shall
be applied to the amount outstanding under the note or judgment. The
receiver shall obtain the consent of the Secretary if such consent
is required by law and has not been given.
G.
Enforcement of writ of restitution. Upon issuance of a writ of restitution,
tribal law enforcement officers shall enforce it by removing the mortgagor
and any other persons occupying the leased premises and their property.
The writ of restitution shall be enforced no later than 45 days after
a judgment of foreclosure has been entered or order appointing receiver
has been entered.
H.
No merger of estates. There shall be no merger of estates by reason
of the execution of a lease or a mortgage or the assignment or assumption
of the same, including an assignment adjudged by the Tribal Court,
or by operation of law, except as such merger may arise upon satisfaction
of the mortgage.
I.
Lessor's right to notice and right to intervene.
(1)
In any mortgage foreclosure proceeding in which the Tribe is not
named as a defendant, a copy of the summons and complaint shall be
served on the Tribe in accordance with the Court rules relating to
service of process or, alternatively, by certified mail, return receipt
requested, within five days after the issuance of the summons.
(2)
The Tribe may petition the Tribal Court to intervene in any foreclosure
proceeding under this article. Neither the filing of a petition for
intervention by the Tribe nor the granting of such petition by the
Tribal Court shall operate as a waiver of the sovereign immunity of
the Tribe, except as may be expressly authorized by the Tribe.
J.
Appeals. Appeals from adverse judgments under this article may be
pursued as provided under the Menominee Tribal Court Rules of Appellate
Procedure.
