A real estate agent in Minnesota is advising a buyer who wants to purchase a property that was recently sold at a non-judicial foreclosure sale. The foreclosure sale occurred 4 months ago, and the mortgagor has not yet redeemed. The buyer is eager to move in immediately after closing. Which of the following is the most accurate advice the agent should give?
Correct Answer
B) The buyer should wait until the 6-month redemption period expires before closing, as the mortgagor still has the right to redeem
Under Minn. Stat. § 580.23, the mortgagor retains a statutory right of redemption for 6 months from the date of the foreclosure sale. Since only 4 months have passed, the mortgagor still has 2 months remaining in the redemption period. If the buyer were to close and the mortgagor subsequently redeemed, the buyer's title could be defeated. The safest course is to wait until the full redemption period has expired before closing to ensure the buyer receives clear, unencumbered title.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
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