Marcus owns a single-family home in Minneapolis with a first mortgage held by a bank and a second mortgage held by a credit union. The bank forecloses non-judicially under Chapter 580, and the foreclosure sale takes place on March 1. Under Minnesota law, which of the following best describes the redemption rights of the credit union as a junior lienholder?
Correct Answer
A) The credit union may redeem the property, but only after the mortgagor's 6-month redemption period has expired
Under Minnesota law, junior lienholders such as second mortgage holders have statutory redemption rights, but they may only exercise those rights after the mortgagor's redemption period has expired. The redemption rights proceed in order of lien priority, with senior lienholders redeeming before junior ones, and each lienholder is given a specific window after the prior party's period expires.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
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