Junior creditor redemption
Junior creditor redemption is the second stage of the Minnesota redemption process. After the mortgagor's period expires, lienholders junior to the foreclosed mortgage get their turn.
Why it exists#
A foreclosure by the senior mortgage extinguishes junior liens. A second mortgage, a judgment, a mechanic's lien — all gone at the sale.
Redemption is the junior creditor's remedy. Pay what the senior claim requires, take the property, and recover from it what the lien would have been worth.
The queue and the clock#
Under Minn. Stat. 580.24, once the mortgagor's redemption period expires, the most senior creditor who filed a notice of intent to redeem may redeem within 14 days.
If they do not, the next creditor in priority gets a seven-day period, and so on down the order.
The computation rules matter. Saturdays, Sundays, legal holidays and the first day following the expiration of the prior period are all included in computing the seven-day period. But where the last day of a period falls on a Saturday, Sunday or legal holiday, that day is omitted.
Those are short windows with precise arithmetic, and the consequence of miscounting is losing the right entirely.
What each redeemer pays#
Redeeming from the certificate holder requires the amount under Minn. Stat. 580.23 — the sale price, interest, and allowable advances.
Redeeming from a creditor who has already redeemed requires that creditor's certificate amount, plus interest at the rates stated, plus the amount claimed due on that creditor's lien as shown on their affidavit.
So each successive redemption is larger than the last. The stack builds, and a creditor far down the priority order faces a figure that may exceed what the property is worth.
Where it gets complicated#
Where the sheriff sees a dispute or a question about the validity of a redemption, the statute allows the sheriff to accept the funds and supporting documents without issuing a certificate of redemption, and to commence an action.
In that situation all further junior creditor redemption periods are stayed until the court determines the matter, and all junior creditors who recorded notices of intent should be joined.
That is a rare outcome and an expensive one, and it is the reason the documentary requirements are enforced strictly at the front end.
What it means for a homeowner#
If the owner does not redeem, the property may still not end up with the certificate holder.
That does not extend the owner's own deadline or give them any further right. But it does mean the eventual owner may be a creditor rather than the foreclosing lender — relevant to anyone still in occupancy and wondering who they will be dealing with.