A Minnesota real estate licensee is representing a buyer who is under contract to purchase a property from a foreclosure sale purchaser. The non-judicial Chapter 580 foreclosure sale occurred 5 months ago on a standard residential property. The original mortgagor paid more than one-third of the original loan principal before defaulting. The mortgagor has not yet redeemed, and there are two recorded junior lienholders. The buyer wants to close as soon as legally safe. Which of the following most accurately identifies the earliest point at which the buyer can close with the greatest assurance of receiving clear, unencumbered title?

Correct Answer

A) After both the mortgagor's 6-month period and all sequential junior lienholder redemption windows have expired

Because the original mortgagor paid more than one-third of the original principal, the standard 6-month redemption period applies (not the 12-month extended period). The mortgagor's period expires one month from now (at the 6-month anniversary of the sale). However, under Minn. Stat. § 580.24, the two junior lienholders each have sequential redemption windows — typically 7 days per lienholder — that begin only after the mortgagor's period expires. The buyer cannot receive truly clear and unencumbered title until all of these sequential redemption periods have also run. Closing immediately after the mortgagor's period, without accounting for junior lienholder windows, would still leave a cloud on title. The earliest safe closing is after all redemption periods — mortgagor's and both junior lienholders' — have expired.