A Minnesota homeowner originally borrowed $320,000 to purchase her home. She has been making payments for several years and currently owes $96,000 on the loan. She defaults, and the lender initiates non-judicial foreclosure under Chapter 580. To determine whether the 12-month extended redemption period applies, what is the one-third threshold of the original debt, and has she paid more or less than one-third of the original loan?
Correct Answer
C) The one-third threshold is $106,667; she still owes less than one-third, so the 12-month period applies
One-third of the $320,000 original debt is $106,667. Because the borrower still owes $96,000 — less than that one-third threshold — Minnesota's twelve-month redemption period under Minn. Stat. § 580.23 applies rather than the standard six-month period.
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Key Terms:
Related Concepts
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
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