A Minnesota farmer defaults on a mortgage secured by his 200-acre agricultural property near Rochester. The lender forecloses by advertisement under Ch. 580. At the time of default, the borrower had paid only 25% of the original loan principal. What is the statutory redemption period available to the borrower?
Correct Answer
C) 12 months, because less than one-third of the original principal has been paid
Under Minn. Stat. § 580.23, the redemption period extends to 12 months when less than one-third of the original principal debt has been paid at the time of foreclosure. Since the borrower paid only 25% (less than one-third, which equals approximately 33.3%), the 12-month redemption period applies. Note that the 12-month period can also apply to agricultural land independently, but here the payment-history trigger alone is sufficient.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
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