Robert owns a 200-acre farm in Kandiyohi County, Minnesota. He financed the purchase with a $500,000 agricultural mortgage and has only paid $80,000 toward the principal — less than one-third of the original debt — before defaulting. The lender forecloses non-judicially under Chapter 580. What is the correct redemption period, and what is the primary reason for this determination?
Correct Answer
A) 12 months, because the property is agricultural AND less than one-third of the original debt has been paid
Under Minn. Stat. § 580.23, a 12-month redemption period applies when the foreclosed property is agricultural AND less than one-third of the original debt has been paid. Robert has paid only $80,000 of the $500,000 original debt (16%), which is less than one-third ($166,667). Combined with the agricultural nature of the property, both conditions for the extended 12-month redemption period are satisfied.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
A comparison of the major mortgage loan types—conventional, FHA, VA, and USDA—covering their eligibility requirements, down payment amounts, mortgage insurance rules, and best use cases.
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